News of the Day

Wisconsin’s Bond Rating Upgraded to AA+ by Fitch Ratings

Governor Scott Walker announced that Fitch Ratings upgraded Wisconsin’s bond rating to “AA+” from “AA.” The announcement comes on the heels of news that Kroll Bond Rating Agency also upgraded the state’s bond rating to “AA+.”

“This is now the second agency in as many days to upgrade Wisconsin’s outlook, and it shows our reforms are working for Wisconsin,” Governor Walker said. “We proved you can budget responsibly and make strong investments in priorities like education and infrastructure while holding the line on taxes.”

The following is an excerpt from the Fitch Ratings report:

“The state’s fiscal performance was historically challenged by structural imbalances and a reliance on one-time resources to cover budgetary needs. The fiscal 2011-2013 budget marked a turning point, with extensive structural budget actions and the resolution of several lingering fiscal challenges.”

Opioid Deaths Increase 300% During 15-Year Span in Wisconsin

The Wisconsin Department of Health Services has released data on opioid death and injury.

The study shows drug overdose deaths in Wisconsin increased 300 percent during a 15-year period; there were 246 deaths in 2000 compared to 1,031 deaths in 2016.

“This information can be used by anyone seeking to better understand the scope of Wisconsin’s opioid epidemic and develop strategies for combating opioid misuse and deaths,” stated State Health Officer Karen McKeown in a news release.

Statewide during that time span, more than half of the drug overdose deaths involved prescription opioids. The total number of deaths due to prescription opioids increased 600 percent, from 81 cases in 2000 to 568 in 2016. While death from heroin overdose accounted for 36 percent of all drug overdose deaths, heroin overdose deaths increased 12 times, from 28 deaths in 2000 to 371 deaths in 2016.

Governor Scott Walker created the Task Force on Opioid Abuse in 2016 to address the state’s opioid overdose epidemic.

WEDC Delays Vote on Foxconn Contract

The Wisconsin Economic Development Corporation (WEDC) delayed a vote on a nearly $3 billion incentive package for Taiwanese manufacturer Foxconn until November after an unspecified problem was discovered with the deal board members were set to vote on Tuesday.

WEDC board chairwoman Lisa Mauer confirmed the vote was pushed back because of a particular concern but also declined to provide specifics. She said it was detected late in the negotiating process. “We want to get this right,” Mauer said. “When something goes awry, you step back and you address that specific issue, and that is what’s going to happen.”

Foxconn has pledged to invest $10 billion and create up to 13,000 jobs at a new LCD manufacturing facility in Mount Pleasant in Racine County. In return the state plans to give the company $2.85 billion in refundable tax credits for jobs and for the construction of the campus.

WEDC CEO Mark Hogan declined to discuss details of where the negotiation stands. “We’re going to take whatever time is required to get it right,” Hogan said. “It’s very complex.”

Hogan said the delay in voting on a contract is not an indication the company is having second thoughts about locating in the state. “I think you’ve seen that Foxconn has been very visible in the community in recent weeks and I think that they’re committed to it,” Hogan said. “They’re moving forward as if this transaction is going to take place.”

Wisconsin Ends Fiscal Year with $579 million Surplus

Wisconsin’s budget finished the fiscal year that ended June 30 with a $579 million surplus, $126 million more than expected and the fourth-largest surplus of the past two decades. The amount was higher than expected mostly because agencies spent about $116 million less than they were authorized to spend.

Tax collections and departmental revenues came in almost level — $4.9 million more than projections that were made when the 2015-17 budget was approved two years ago, an indication that economic growth has held steady since then.

“Our pro-growth, pro-taxpayer reforms are working, and this is evidenced by the fact we have ended every year with a surplus since taking office,” Walker said in a statement.

Wisconsin Program Launched to Boost Productivity in Manufacturing

Targeting small and midsize manufacturers, three Wisconsin business organizations have launched an initiative to boost productivity in factories across the state.

Wisconsin Economic Development Corporation, Milwaukee 7 and Wisconsin Manufacturing Extension Partnership say the new program, called the Transformational Productivity Initiative, will identify factors that limit productivity growth and then work with companies to solve those problems.

The WEDC has awarded Milwaukee 7 a $190,000 matching grant to implement the program, and between five and 10 companies are being sought for a two-year trial period.

The Wisconsin business groups say they aim to develop a user-friendly set of diagnostic and assessment tools for productivity issues.

The tools will come from teams representing select manufacturers, Wisconsin Manufacturing Extension Partnership and University of Wisconsin programs in Milwaukee, Stout and Madison.

“It’s a different, comprehensive approach that we haven’t seen anywhere else,” said Kelly Armstrong, the project’s lead for the WEDC.

“TPI is a long-term strategy directed at moving the needle on productivity in the aggregate, working with small and midsize manufacturers in a way that will ultimately drive wage and job growth in Wisconsin,” Armstrong said.

The productivity initiative is aimed at companies with fewer than 500 employees. “This initiative is critical if Wisconsin and the Milwaukee region are to remain globally competitive,” said Pat O’Brien, executive director of Milwaukee 7, an economic strategy group for the seven counties in southeastern Wisconsin.

In the next 30 days, companies will be chosen for the two-year trial period. They will be from various industries but must be manufacturers.

Applications are being accepted through the WEDC.

“What we will do is pick between five and 10 private companies that have volunteered to go through this process, at no charge to them, to be the pilot program,” Armstrong said. “The idea is to develop the (diagnostics) tools that can be used for small and midsize manufacturers across the state,” she added.

Obamacare Insurance Rates to Rise 36% in Wisconsin Next Year

Health insurance premiums on the Affordable Care Act exchange will go up an average of 36 percent in Wisconsin next year, but government subsidies will offset the increases for most people, a state official said Thursday.

A major reason for the stiff hikes is that President Donald Trump’s administration hasn’t said if it will continue certain payments to insurers, said J.P. Wieske, deputy commissioner of insurance.

The increases — and the loss of three national insurers in the state from healthcare.gov, affecting more than a third of the 216,000 residents who get insurance that way — also reflect instability in the market, Wieske said.

Too few young and healthy people are signing up for insurance on the exchange, part of what is known by some as Obamacare, making it risky for insurers who have lost $400 million from the business in the state over three years, he said.

“There’s some concern that we’re in a death spiral,” Wieske said. “The increases we’re seeing reflect the increased amount of risk that a smaller number of carriers are going to have to take on.”

Enrollment for individual coverage at healthcare.gov runs Nov. 1 to Dec. 15.

Molina Healthcare, Anthem Blue Cross Blue Shield in Wisconsin and Health Tradition Health Plan said earlier this year they are leaving the exchange next year. About 75,000 people on those plans will need to select other insurance. To help stabilize the market, Wisconsin will consider seeking a waiver in 2019 to let the state set up its own system under the federal health care law, he said. Minnesota has done that, and Iowa is requesting permission.

Premiums next year will increase an average of 40 percent for so-called silver plans on the exchange in the state. About 90 percent of people with the coverage get subsidies that will also go up accordingly, so they won’t be directly impacted, Wieske said. Rates for bronze plans, which offer less coverage, will go up 21 percent. The cost for gold plans, which offer more coverage, will go up 19 percent. People buying those plans will have to pay more.

Officials Detail Trump Executive Order on Healthcare Coming Thursday

President Trump will sign an executive order on Thursday morning aimed at taking action on health care after Congress’s failure to repeal ObamaCare. The order will:

  • direct the Department of Labor to “modernize” rules to allow small employers to create association health plans, the source said. Small businesses will be able to band together if they are within the same state, in the same “line of business,” or are in the same trade association.
  • lift Obama administration limits on short-term health insurance plans, allowing the plans to last as long as 12 months and be renewed. The change to short-term health insurance could damage the stability of ObamaCare. The source said the new rules for short-term plans are where administration officials think the order will have the “most immediate impact.”
  • allow people to use tax-advantaged accounts known as Health Reimbursement Accounts to pay for their premiums.

Journeyman-to-Apprentice Bill to Get Vote Thursday

A state Senate panel plans to vote this week on a bill that would set the ratio of journeymen needed to oversee apprentices coming into construction strictly at one-to-one for all trades.

Current journeymen-to-apprentice ratios vary from trade to trade. For carpenters, for instance, the mandated ratio is already one-to-one when there is only one apprentice in a given class. But for every apprentice who joins after that, three more journeymen must be added.

Proponents of setting the ratios at one-to-one argue the change will eliminate an artificial barrier to recruitment and thus help combat the industry’s persistent labor shortage. Some contractors have complained that it is hard to find enough journeymen to meet the current requirements, especially as many older workers retire from the trades.

At a public hearing last week, several industry groups expressed reservations about the proposal. A lawyer representing Local 139 of the International Union of Operating Engineers – the biggest construction union in the state – warned that the bill seemed to give the state license to override collective-bargaining agreements reached between labor and management groups. Such authority, he warned, could run afoul of federal labor law.

If Bill 411 became law, state officials would not have to cede all their control over journeyman-to-apprentice ratios. Although losing their power to require more than one journeyman for each apprentice, they would still be able to increase the number of apprentices who could work under a single journeyman.

Should Senate Bill 411 receive a favorable recommendation on Thursday, it would next go to the full state Legislature.

EPA to Repeal Landmark Obama Climate Rule

The Trump administration on Tuesday will formally propose repealing Barack Obama’s landmark climate change rule for power plants, a key part of the U.S. commitment to reduce emissions under the Paris accord.

The rule was the centerpiece of Obama’s strategy to reduce greenhouse gas emissions and show the rest of the world that the U.S., a top polluter, is committed to climate action. It aims to cut emissions from the electricity sector by 32 percent by 2030.

The EPA’s announcement is the first major step toward fulfilling a key campaign promise Trump made to repeal the climate rule that he’s called “stupid” and “job-killing.” Trump’s EPA argues that the agency overstepped, arguing it can only regulate pollution from individual plants and not sector-wide.

The EPA will open the door to replacing the rule with a weaker, more industry-friendly standard to limit carbon dioxide emissions from power plants, though it did not promise to pursue a new regulation.

 

Microsoft to Help Expand Rural Broadband in Six States

Microsoft announced Thursday it is teaming up with communities in six states to invest in technology and related jobs in rural and smaller metropolitan areas. Microsoft has selected Appleton, Wisconsin as one of the six sites. The other communities will be announced later.

Company president Brad Smith launched the TechSpark program Thursday in Fargo, a metropolitan area of more than 200,000 people that includes a Microsoft campus with about 1,500 employees. Smith says the six communities are different by design and not all have a Microsoft presence. Smith says TechSpark is a multi-year, multi-million dollar investment to help teach computer science to students, expand rural broadband and help create and fill jobs, among other things. The other programs will be in Texas, Virginia, Washington, Wisconsin and Wyoming.

Microsoft planned to use “white space” technology, tapping buffer zones separating individual television channels in airwaves that could be cheaper than existing methods such as laying fiber-optic cable. The company had originally envisioned using it in the developing world, but shifted focus to the U.S. this summer.

“We are a very diverse country,” Smith said. “It’s important for us to learn more about how digital technology is changing in all different parts of the country. So we are working to be more present in more places.”

Smith said there are 23.4 million Americans living in rural communities who don’t have broadband coverage and the TechSpark program is going to focus on bring coverage to these six regions.