News of the Day

More Lawsuits Won’t Change the Fate of Clean Power Plan

Several state attorneys general have announced they will sue to block the Environmental Protection Agency’s rollback of President Barack Obama’s signature Clean Power Plan. Can they win? And should they? The answer to both questions is no, but not because of anything inherently wrong with the plan to cut greenhouse-gas emissions from power plants. Although administrative decisions must be rational, they are permitted to reflect the president’s political priorities and beliefs.

The Clean Power Plan has been enmeshed in litigation from the start. After it was promulgated by Obama’s EPA, the U.S. Supreme Court blocked it from going into operation. The order came on Feb. 9, 2016. The four liberal justices voted against it. The five conservatives voted in favor — less than a week before Justice Antonin Scalia’s death. The order blocking the plan was a big deal, legally speaking. Never before had the Supreme Court frozen a regulation before the courts of appeals had had the chance to weigh in on its legality. And the U.S. Court of Appeals for the D.C. Circuit, which was going to review the regulation, had refused a similar stay.

The conservative justices were sending an unusually strong signal that they sided with the 29 states and industry groups that were challenging the plan as exceeding the EPA’s authority. As a consequence, the Clean Power Plan didn’t go into effect.

To attack the rollback, Democratic attorneys general will have to argue that the decision to reverse the earlier regulation was irrational — “arbitrary and capricious,” under the language of the Administrative Procedure Act.

As a matter of law, regulatory rollback is treated the same as the initial promulgation of a regulation. That means the government must articulate a rational reason for its decision-making. In the case of the Clean Power Plan rollback, the government’s main argument will apparently be that the original plan was itself unlawful because it exceeded the EPA’s authority to regulate emissions under Section 111(D) of the Clean Air Act.

Technically, the issue is whether the “best system of emission reduction” that the EPA is empowered to impose must relate only to the specific technology used to regulate emissions at a single power plant or “source.” The Clean Power Plan imposed broader limits on emissions that would likely have required not just improvements in emissions technology but also reduction of coal use to meet emissions targets.

But the Trump administration is entitled to offer its own interpretation of the statute that differs from Obama’s. And since Scott Pruitt as attorney general of Oklahoma was one of the leading critics of the plan, it’s not surprising that the EPA under his leadership has adopted his view of the law.

Agencies like the EPA are part of the executive branch. The election of a president is, in no small part, a referendum on the regulatory policies that the public would like to see enacted.

Top Senate Republican, White House, Aim for Tax Bill by Year-End

The top U.S. Senate Republican and the White House budget director said on Sunday they hoped for action on a Republican tax reform package by the end of the year, while keeping their options open on how to pay for sweeping tax cuts.

President Donald Trump’s plan promises up to $6 trillion in tax cuts, but would increase the deficit by $1.5 trillion over the next decade. Democrats have criticized the package as a giveaway to the rich and corporations that would balloon the deficit.

Republicans, who control both the Senate and House of Representatives, have yet to produce a bill as their self-imposed deadline to overhaul the U.S. tax code by the end of 2017 approaches. The party’s lawmakers differ widely on what cuts to make and how to pay for them.

Trump participated in a conference call with House Republican lawmakers on Sunday where tax reform was discussed, a White House official said.

The president was also expected to travel to Capitol Hill on Tuesday to participate in Senate Republicans’ weekly policy lunch, with the tax package high on the agenda.

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, 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 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.