Brian Dake

After nearly a year of frantic lobbying and debate, the EPA has finalized strict new rules on vehicle emissions that will push the auto industry to accelerate its transition to electric vehicles. The EPA expects that under the new rules, EVs could account for up to 56% of new passenger vehicles sold for model years 2030 through 2032.

The rules cover light- and medium-duty vehicles — cars, SUVs, vans and pickup trucks, but not 18-wheelers — from model years 2027 to 2032. The EPA rules are not written as an EV mandate or a ban on the sale of gas cars. Instead, the EPA sets standards that apply across an entire fleet — meaning an automaker still can make vehicles with higher emissions, as long as they also make enough very low or zero-emission vehicles that it averages out.

The oil industry, meanwhile, has been an even more vocal critic of these rules and other policies promoting EVs. Rising adoption of electric vehicles is expected to reduce oil demand over time, although it will take decades for the global fleet of vehicles to turn over.

But the oil industry’s opposition goes even further. The attorney general of Texas has previously filed a lawsuit challenging the EPA’s authority to set rules designed to promote electric vehicles. Multiple oil trade groups backed Texas in the case.

The Federal Reserve on Wednesday said it is maintaining the federal funds rate in a range of 5.25% to 5.5%. Still, most members of the Federal Open Market Committee are still projecting three rate cuts later in 2024, matching the bank’s earlier forecast for the number of rate reductions this year, according to the Fed’s Summary of Economic Conditions.

At a Wednesday press conference, Chair Jerome Powell pointed to stubbornly persistent inflation in January and February’s to explain the decision to hold rates steady, adding that the central bank doesn’t want to cut prematurely and risk a flare-up of inflation.

“We said it was going to be bumpy ride, and now we’re seeing that,” Powell said. “The question is whether they are more than bumps, and we don’t know that.”

Inflation in February rose 3.2% on an annual basis, faster than January’s 3.1% increase. Despite that recent increase, Powell added he is confident inflation will eventually recede to the bank’s 2% goal. But he reiterated that the Fed is prepared to hold the line on rates until policymakers see more evidence that inflation is fading.

“We believe our policy rate is likely at its peak for this tightening cycle,” he said. The Fed “will likely begin dialing back policy restraint some point this year.”

Home prices in Wisconsin have grown faster than incomes in recent years, creating challenges for prospective first-time homebuyers. That’s according to a new report released Wednesday by the Wisconsin Policy Forum. The report examined the change in incomes, home and rent prices from 2017 to 2022.

The rise in home costs is tied to declines in housing construction following the 2008 Great Recession, the report said.

Since 2010, according to the study, the number of households in the state has increased by more than 211,000, but less than 145,000 housing units have been permitted, creating a 67,000 deficit.

From 2017 to 2022, the median home sale price in Wisconsin increased by more than 50 percent, while median household incomes in the state increased by only 19.7 percent, the report states.

Six of Wisconsin’s 72 counties had median home prices that were at least 4.5 times higher than their median household incomes in 2022, the report said. They were Dane, Door, Vilas, Sawyer and Burnett counties.

Another seven counties had median home prices that were four times higher than median household incomes as of 2022. They included Barron, Florence, Iron, Oneida, Washburn, Ozaukee and Walworth counties.

While the cost of owner occupied housing has been dramatic, the report indicates changes in the state’s rental market were less pronounced.

It found median gross monthly rents increased by 21.1 percent from 2017 to 2022, while median household incomes among renters rose by 22 percent.

A federal appeals court paused financial rules issued by the Securities and Exchange Commission (SEC) that will force private companies to publicly disclose their carbon emissions and risks climate change poses to their business.

In a short ruling issued Friday, the U.S. Court of Appeals for the Fifth Circuit paused the SEC’s climate disclosure rule, but declined to offer any explanation for the decision. The ruling, though, came in response to petitions for review filed by energy companies Liberty Energy and Nomad Proppant Services, the states of Louisiana, Mississippi and Texas, and business groups Chamber of Commerce, Texas Alliance of Energy Producers and Domestic Energy Producers Alliance.

“For two years now, the U.S. Chamber of Commerce has raised significant concerns about the scope, breadth, and legality of the SEC’s climate disclosure efforts,” Tom Quaadman, the executive vice president of the Chamber of Commerce’s Center for Capital Markets Competitiveness, said in response to the SEC’s disclosure rules.

“The Chamber will continue to use all the tools at our disposal, including litigation if necessary, to prevent government overreach and preserve a competitive capital market system,” he continued.

Under the leadership of Chairman Gary Gensler, whom President Biden appointed to the role, the SEC approved the climate disclosure rules on March 6 in a 3-2 vote after nearly two years of heated deliberations.

The SEC said in a statement that the rules reflect “investors’ demand for more consistent, comparable, and reliable information about the financial effects of climate-related risks.” And Gensler said they will further guarantee companies “produce more useful information than what investors see today.”

Last Thursday, the Federal Communications Commission (FCC) adopted its annual assessment of whether advanced telecommunications capability is being deployed in a reasonable and timely fashion across the U.S. In addition to deployment, the Report considers broadband affordability, adoption, availability, and equitable access, when determining whether broadband is being deployed in a reasonable and timely fashion to “all Americans.”

The Commission’s Report, issued pursuant to section 706 of the Telecommunications Act of 1996, raises the Commission’s benchmark for high-speed fixed broadband to download speeds of 100 megabits per second and upload speeds of 20 megabits per second – a four-fold increase from the 25/3 Mbps benchmark set by the Commission in 2015.

The increase in the Commission’s fixed speed benchmark for advanced telecommunications capability is based on the standards now used in multiple federal and state programs (such as NTIA’s BEAD Program and multiple USF programs), consumer usage patterns, and what is actually available from and marketed by internet service providers.

The Report concludes that advanced telecommunications capability is not being deployed in a reasonable and timely fashion based on the total number of Americans, Americans in rural areas, and people living on Tribal lands who lack access to such capability, and the fact that these gaps
in deployment are not closing rapidly enough.

The Report also sets a 1 Gbps/500 Mbps long-term goal for broadband speeds to give stakeholders a collective goal towards which to strive – a better, faster, more robust system of communication for American consumers.

A split state Supreme Court ruled the Catholic Charities Bureau Inc. is not exempt from having to pay unemployment tax to cover their employees because the work they do providing services to those with disabilities isn’t primarily for religious reasons.

The court found in its 4-3 decision Thursday that it’s undisputed the group meets one of the requirements to be exempt from the system because it is supervised by the Superior Diocese.

The court found the four sub-entities of Catholic Charities Bureau Inc. involved in today’s decision don’t attempt to share the Catholic faith with participants, nor supply them with any religious materials. It also found the group hadn’t shown how paying unemployment taxes would prevent it from fulfilling a religious function or engaging in any religious activities. The court also rejected the argument that an analysis of the group’s activities crossed a threshold barring the courts from unnecessary entanglement in church matters.

Each Roman Catholic Diocese in Wisconsin has a social ministry arm. The case the court decided today involved the Superior Diocese’s Catholic Charities Bureau and four sub-entities. None of the four is funded by the diocese, instead receiving money primarily through government contracts, and one had no religious affiliation before it asked to be overseen by the diocese.

They provide services for people with developmental or mental health disabilities, including job coaching and placement, food services and other aid.

According to court records, the state ruled in 1972 that the CCB had to pay unemployment taxes on its employees after it self-reported the nature of its work as “charitable,” “educational,” and “rehabilitative,” not “religious.” After a Douglas County Court in 2015 ruled one of the sub-entities of the CCB was operated primarily for religious purposes, the organization asked to have the four subsidiaries involved in today’s decision removed from the state unemployment system.

The 4-3 ruling affirmed an appeals court decision that upheld a ruling by the Labor and Industry Review Commission that the four must continue paying unemployment taxes on their employees.

Since early January 2024, U.S. refinery utilization has decreased 11%, falling as low as 81% during the two weeks ending February 9 and February 16, and briefly dropped below the five-year (2019–23) low. Although U.S. retail average prices for gasoline and diesel are below 2023 prices for this time of year, decreasing regional inventories for the major U.S. refining regions increased retail prices for both fuels last month.

The sharp decline in refinery utilization is the result of reduced plant operations in both the Midwest and Gulf Coast regions and more intense seasonal patterns. The decline is also affecting inventories.

The U.S. Gulf Coast (PADD 3), the area with the largest drop in refinery utilization, has been the primary source of overall reduced U.S. refinery runs. Since the first week of January, U.S. Gulf Coast four-week average refinery utilization has decreased 14%, falling below 80% for the past two weeks. The reduced refinery runs are likely the result of weather-related issues stemming from cold temperatures, as well as planned maintenance. Weatherization against extreme cold is less common on the Gulf Coast compared with other regions, such as the Midwest, and a lack of winterization can contribute to power outages or damage to instruments, resulting in temporary shutdowns.

The current Gulf Coast refinery maintenance started earlier than normal and has had a larger impact on refinery operations. Trade press indicates maintenance shutdowns are underway at the Motiva Port Arthur and Marathon Galveston Bay refineries, which together account for about 7% of total U.S. capacity, or more than one million barrels per day of processing capacity. Planned refinery maintenance is typically seasonal and generally peaks during late February and March.

In the Midwest (PADD 2), bp’s refinery in Whiting, Indiana, (the largest refinery in the Midwest) was taken offline because of an unplanned outage. This outage is also a major source of reduced utilization nationwide and the driving force behind a 10% drop in Midwest regional refinery utilization since the first week in January.

Lower refinery production has led to decreased inventories of both motor gasoline and diesel (defined as distillate fuel oil with sulfur content under 15 parts per million) in the United States. In the Midwest, high refinery runs at the end of 2023 and logistical limitations on moving gasoline and diesel out of the region increased regional inventories of both fuels at the end of last year. Inventories started the year near or above five-year highs through early February. On the U.S. Gulf Coast, inventories also started the year at above-average levels but have since decreased significantly as refinery utilization has dropped. Inventories of both gasoline and diesel dropped below their 2023 levels.

A plan to widen Interstate 94 in Milwaukee has received federal approval.

The Wisconsin Department of Transportation announced Friday that the plan received an OK from the Federal Highway Administration. The state DOT will now move on to final design and construction.

The project will widen I-94 from six to eight lanes along a 3.5 mile stretch between 16th and 70th streets on the city’s west side. Along with adding lanes, the project includes road modifications that will eliminate left-hand exit and entrance ramps and “right-sizing” the Stadium Interchange.

The state DOT wants to begin construction in late 2025. The project is expected to cost $1.2 billion.

Consumer prices rose at faster monthly and annual rates in February, according to inflation data released Tuesday by the Labor Department.

The consumer price index (CPI), a closely watched gauge of inflation, rose 3.2 percent annually in February and 0.4 percent last month alone.

More than 60 percent of February’s monthly increase in prices came from gasoline and shelter, the Bureau of Labor Statistics explained Tuesday.

The February inflation data also keeps the Federal Reserve on track to keep interest rates steady at the end of a policy meeting next week. While the Fed projected in Decemeber several rate cuts, the strength of the U.S. economy has iced those plans for now.

On March 1, a federal district judge in Alabama ruled that the beneficial ownership information (BOI) reporting required under the Corporate Transparency Act (CTA) is an unconstitutional exercise of Congress’s enumerated powers.

The judge granted summary judgment to the plaintiffs in the case of National Small Business United d/b/a the National Small Business Association, et al v. Janet Yellen. In a separate order, the judge enjoined FinCEN from enforcing the BOI against the plaintiffs. FinCEN announced they will comply with the court’s order and not enforce BOI reporting against entities that are members of the National Small Business Association as of March 1, 2024.

It is very likely that the government will appeal the decision to the 11th Circuit Court of Appeals.

What now?

Most companies can take a wait-and-see approach to the BOI litigation — and that’s because, for entities established before January 1, 2024, the required BOI reporting date is not until January 1, 2025.

For entities established on or after January 1, 2024, they only have 90 days from creation under state law to file an initial BOI report.

This means those entities that were not members of the National Small Business Association as of March 1 will need to decide whether to 1) move forward with filing the BOI report or 2) hope another court or Congress provides relief to the BOI filing requirements. Otherwise, they could face civil or criminal late filing penalties under the current BOI rules.