Brian Dake

Wisconsin Electricity Rates Among Highest, Use Low

Wisconsin has some of the highest electricity prices in the nation, although the average customer spends far less on electricity than in most states.

The average residential price for a kilowatt of electricity was 10.67 cents in 2016, according to numbers released this week by the U.S. Energy Information Administration. Only 15 states had higher residential rates, a reversal from 20 years ago, when Wisconsin had the 14th lowest rates in the nation.

Commercial rates are 15th highest in the nation, while industrial rates are 18th.

So why are Wisconsin’s rates so high?

“Built-in costs,” said Gary Radloff, director of Midwest Energy Policy Analysis for the Wisconsin Energy Institute. “It’s a combination of legacy infrastructure and legacy business models.”

Utilities have invested heavily in power plants and transmission lines — such as the CapX2020 and Badger Coulee projects through western Wisconsin — that are paid off over decades through customer rates set by the Public Service Commission.

In 2013, a group of Wisconsin utilities agreed to spend $1.2 billion to upgrade coal plants to settle a case brought by the Environmental Protection Agency over emissions of sulfur dioxide and nitrogen oxide.

The PSC acknowledged rising rates in its last statewide energy assessment, though the report said investments are necessary to replace aging facilities and comply with federal regulations. The regulatory agency says it is continuing to investigate ways to mitigate rate increases and suggests customers can offset the impact by conserving energy.

Bill Increasing Penalties for UI Benefits Fraud Advances

A panel of lawmakers has given its approval to a bill that would increase the penalties for unemployment claimants who fraudulently obtain jobless benefits.

State law already has penalties for people who conceal material facts related either to their ability to obtain jobless benefits or to the wages they had earned while working. Those who are found to have committed a violation known as concealment can be forced to pay back the money they received from the state plus a penalty equal to 40 percent of that amount.

Aside from those civil penalties, a person can also face criminal charges for concealment and be hit with penalties ranging from $100 to $500 in fines and as many as 90 days in prison.

Assembly Bill 710, and its companion in the state Senate, Senate Bill 542, would ratchet up those criminal penalties, making them go up in accordance with the amount of benefits a claimant illegally obtained. If the benefits fraudulently obtained totaled $2,500 or less, a claimant would face a maximum of $10,000 in fines and nine months in prison.

For those who obtained between $2,500 and $10,000 worth of benefits, the offense would become a felony and the criminal penalties would be three and a half years in prison and a maximum of $10,000 in fines.

For claimants who had fraudulently obtained more than $10,000 worth of jobless benefits, the crime would also be a felony but the maximum penalties would be $25,000 in fines and 10 years in prison.

The bill would allow a series of violations to be prosecuted as a single crime.

The Assembly Committee on Public Benefit Reform voted 5-3 on Tuesday, along party lines, to recommend the bill for adoption.

State Rep. Debra Kolste, a Democrat, had proposed amending the bill so that it would also apply to employers. However, that amendment failed on a 5-3 vote on party lines.

Both bills still need to be approved by the full Legislature and signed by Gov. Scott Walker to become law.


President Trump Unveils Infrastructure Plan

The 53-page document lays out his vision: To turn $200 billion in federal money into $1.5 trillion for fixing America’s infrastructure by leveraging local and state tax dollars and private investment.

Half of the new federal money, $100 billion, would be parceled out as incentives to local government entities.

An additional $20 billion would go toward “projects of national significance.”.

Another $50 billion is earmarked for rural block grants, most of which will be given to states according to a formula based on the miles of rural roads and the rural population they have. States can then spend that money on transportation, broadband, water, waste and power projects.

The rest of the money would support other infrastructure-related undertakings, including existing loan programs like the one operated by the Environmental Protection Agency under the Water Infrastructure Finance and Innovation Act, which White House officials said could leverage up to $40 in local and private money for every $1 in federal investment.

The plan proposes to cut federal permitting to two years, down from five to ten. Former President Obama also tried to address the problem through an executive order that instructed agencies to use better technology and work concurrently on their reviews in order to cut down on approval times.

The plan also calls for changes aimed at widening the pipeline of skilled construction workers, such as allowing Pell Grants to be used for short-term credentials from places like community colleges and targeting federal work-study funding toward on-the-job training.

Finally, the plan proposes to allow the federal government to quickly and more easily sell assets that it says “would be better managed by state, local, or private entities.” As examples of property that could be divested, the plan named the Ronald Reagan and Dulles International Airports, the Tennessee Valley Authority and Bonneville Power Authority’s transmission assets, and the Washington Aqueduct, which supplies Washington, D.C. with fresh drinking water.


Governor’s Reinsurance Proposal Could Help Lessen Key Problem in ACA

Wisconsin is on track to join states such as Minnesota and Oregon that have a program to help lessen the problems with the Affordable Care Act.

Gov. Scott Walker, a longstanding opponent of the law, has proposed using a mix of federal and state dollars to lower premiums — or at least check future increases — for insurance sold directly to individuals and families.

The proposed program would pay as much as 80% of the insurance claims of people with high medical bills, lowering insurers’ costs and enabling them to set rates with more certainty.

The program, known as reinsurance, addresses one of the key problems with the Affordable Care Act: The health plans have drawn too many people with high medical bills and not enough healthy people to offset the costs.

That has contributed to health insurers incurring large losses that lead to steep increases in premiums. The hope is that a state-run reinsurance program would lower rates and pull more healthy people into the market.

A similar program in Minnesota is estimated to have lowered premiums by 20% compared with what they would have been otherwise this year. Reinsurance also has worked well in the market for Medicare prescription drug plans, known as Part D, sold by private health insurers.

Wisconsin Assembly, Governor Walker Propose Child Rebate, Tax Holiday

Wisconsin families with school-aged children would receive a one-time $100 tax rebate this summer and state sales tax would be waived on certain purchases the first weekend in August under a deal Gov. Scott Walker and Assembly Republicans announced on Thursday.

The Assembly will approve the plan later this month, Vos said. It’s not clear what will happen in the Senate, which must also approve it before it goes to Walker. Republican Senate Majority Leader Scott Fitzgerald’s spokesman did not immediately return a message seeking comment.

Under the deal, families with children who were between the ages of 5 and 17 last year and are now living at home would receive $100 for each qualifying kid. The money, estimated to come to about $122 million of the state’s budget surplus, would be delivered to all families regardless of income sometime in July. That is unchanged from what Walker had originally proposed.

“As I promised, when we have a surplus, we will give it back to you,” Walker said in a statement. “It’s your money.”

Walker originally wanted to offer a refundable income-tax credit starting in 2019, but that plan has been scrapped. Instead, there will be a one-time waiver of the state’s 5 percent sales tax on certain purchases, provided they cost less than $100 and are made in the first weekend in August. The total estimated cost to the state in lost tax revenue would be about $50 million.

“Our goal is actually to increase the economic ability of families this year,” Vos said, noting that the benefit will extend to all families regardless of income.


Wisconsin Exports up 6% in 2017

Wisconsin businesses exported $22.3 billion in goods and services to 202 countries in 2017, a 6.1 percent increase over 2016.

“Not only is Wisconsin becoming more attractive to global companies seeking to expand or establish operations in the U.S., but existing state businesses are experiencing more success in selling their products overseas,” Governor Walker said. “The boost in exports is yet another example of the economic success we experienced in 2017 and is a trend we expect to continue as more companies are accessing new markets and new customers through exporting.”

Wisconsin’s export growth in 2017 was generated by significant increases in shipments to Canada, Mexico, and China, the state’s three largest export destinations.

  • Exports to Canada grew by 4.3 percent to $6.9 billion, driven by increases in the export of miscellaneous mineral products and electrical machinery.
  • Exports to Mexico were up 4.8 percent to a record $3.2 billion, mostly because of an increase in the export of electrical machinery and oil seeds (primarily soybeans).
  • Exports to China jumped by 21.6 percent to $1.7 billion in 2017 – also a record for exports to that country. Driving the growth in exports to China were increases in the shipments of aircraft and parts; industrial machinery; dairy products; wood and wood products; and raw hides and skins.

Wisconsin exported more than $3.5 billion in agriculture products to 147 countries in 2017, a 3.6 percent increase over 2016. The state saw increases agriculture exports to Canada (up 1.5 percent); Mexico (up 14.2 percent); China (up 27.6 percent) and Korea (up 0.3 percent).

Exports of dairy, eggs and honey products in 2017 were up 19.9 percent over 2016 to $297 million. The state ranks fifth in the U.S. in exports of those products.

Overall, Wisconsin saw increases in numerous key product categories, including electrical machinery (up 12.4 percent to $2.2 billion); vehicles and vehicle parts (up 21.7 percent to $1.9 billion); industrial machinery (up 3.6 percent to $5.4 billion); plastic products (up 2.8 percent to $1.1 billion); aircraft and parts (up 27.8 percent to $750 million); paper products (up 3.1 percent to $881 million); prep vegetables, fruits and nuts (up 8.9 percent to $341 million); oil seeds, miscellaneous grain, seed and fruit (up 35.7 percent to $310 million; and wood and wood products (up 13.3 percent to $254 million).

Industrial machinery continued to be Wisconsin’s top export product category at $5.4 billion, accounting for 24 percent of all state exports. Tied for second were electrical machinery and medical and scientific instruments, both coming in a $2.2 billion – and each garnering 10 percent of the total exports.



Legislative Democrats Push for ‘Local Wage Act’

Democratic state lawmakers argue it’s time to give local governments more control over how businesses treat their employees.

The package of bills, deemed the “Local Wage Act,” would repeal a state law that prevents local governments from setting their own minimum wage and would allow them to enact their own family and medical leave standards.

Wisconsin’s minimum wage of $7.25 an hour was last increased in 2009, when Democrats were in charge of state government. State Senator Dave Hansen (D-Green Bay) says Republicans have done nothing to address the issue for the past eight years, while the state has fallen behind. “It is time to give back the right of communities, local control, to set their own standards for how they value work and the people who do it,” he says.

The proposals are unlikely to see much movement under the current Republican-controlled Legislature.

Governor Calls for Kimberly-Clark Tax Break Similar to Foxconn

Gov. Scott Walker on Monday called for increasing job-retention tax credits to entice consumer products giant Kimberly-Clark Corp. to keep two manufacturing facilities open in northeast Wisconsin, rather than eliminate 600 jobs.

“Retaining outstanding Wisconsin companies like Kimberly-Clark is just as important as attracting new companies to our state, which is why I’m proposing we offer larger tax credits to ensure the company keeps those 600 jobs where they belong – in Wisconsin,” Walker said in a statement.

A spokesman for Dallas-based Kimberly Clark, which makes Kleenex tissue, Huggies diapers and other paper products, did not immediately return a message seeking comment. The move to close the Wisconsin plants came as part of Kimberly-Clark’s plans to reduce its workforce by 12 percent to 13 percent, or 5,000 to 5,500 jobs, and close or sell about 10 manufacturing facilities.

The Neenah factory, which makes non-woven products, was slated to close within 18 months. There was no closure date announced for the other plant in nearby Cold Spring, which makes Depend adult diapers and other personal care products.

Walker’s jobs agency can currently give Kimberly-Clark and other companies a 7 percent job-retention credit, but raising it to the same 17 percent Foxconn got would require a law change.

Republican legislative leaders did not immediately return messages seeking reaction to Walker’s proposal.
Democratic Assembly Minority Leader Gordon Hintz accused Walker of “saying just about anything” to win re-election while underestimating how unpopular the Foxconn deal is around the state. He said Walker was being reactive, rather than being a leader to protect existing jobs.


Governor Walker says $50M Economic Development Fund Could Help Keep Young Adults in Rural Communities

Governor Walker said he thinks a proposed $50 million annual investment in rural economic development programs will help keep young adults in Wisconsin’s rural communities.

Walker touted the proposal at the Governor’s Conference on Economic Development in downtown Madison. It’s part of a broad agenda Walker pitched to lawmakers during his State of the State address last week.

“One of the biggest things I hear from people across the state is, ‘I want to find a way for my kid or my grandkid to stay here,'” Walker told reporters after his speech at the conference. “To do that, most of them need to have a career opportunity.”

Under Walker’s plan, the Wisconsin Economic Development Corporation would distribute funding to eligible projects in counties with no more than 155 people per square mile — a measure Walker said applies to 56 of the state’s 72 counties.

In many rural communities, adding as many as 25 jobs can have a significant impact, Walker said.

Walker said he has been hearing “long before Foxconn” about the need to promote growth and development in rural areas.

He said the plan is designed to assist with projects large and small alike. “It’s not the cure-all for everyone, but it certainly would help us draw more attraction to those areas,” Walker said.

Governor Walker Open to Gas Tax Hike to Land Federal Road Funding

Gov. Scott Walker said Thursday he is open to raising the state’s gas tax, if offset by other tax cuts, to pay the state’s share of a federal proposal to spur $1.5 trillion in public and private infrastructure spending.

Responding to President Donald Trump’s call during his State of the Union address for more federal funding for roads, Walker said he hopes to work with U.S. House Speaker Paul Ryan, R-Janesville, to encourage Congress to pass “a sizable package,” but maintain the typical match of 80 percent federal and 20 percent state funds.

The White House has said only $200 billion of the $1.5 trillion package would come from the federal government paid for with cuts in other areas. The rest of the money would come from state, local and private sources.

“We’re willing to invest to obtain those dollars to grow and build our infrastructure here,” Walker said. “I’m willing to look at ways to add to our revenue in the transportation budget as long as we have a net neutral or really a net reduction for the overall burden to the taxpayers in this state. If we could cut taxes, income taxes or other taxes, we could look at revenues in the future, particularly if it helped us leverage federal dollars.”

Walker made the comments to reporters after a speech at the Wisconsin Economic Development Association Governor’s Conference in Madison, where he urged economic development officials to lobby legislators to adopt his proposal for a $50 million a year rural economic development fund.