Month: April 2021

Gross domestic product, the sum of all goods and services produced in the economy, jumped 6.4% for the first three months of the year on an annualized basis. Outside of the reopening-fueled third-quarter surge last year, it was the best period for GDP since the third quarter of 2003.

“This signals the economy is off and running and it will be a boom-like year,” said Mark Zandi chief economist at Moody’s Analytics. “Obviously, the American consumer is powering the train and businesses are investing strongly.”

Consumers, who account for 68.2% of the economy, accelerated spending by 10.7% in the quarter, compared with a 2.3% increase in the previous period. The expenditures were largely focused on goods, which increased 23.6%, but spending on services, which had been the missing link in the recovery, still grew by 4.6%.

On the goods side, spending exploded by 41.4% on durable goods like appliances and other long-lasting purchases.

While the numbers indicated that many used the free money to spend, they also tucked a good portion of it away, as the savings rate soared to 21%, from 13% in Q4.

“With the elevated saving rate, households are still flush with cash and, now that restrictions are being eased as the vaccination program proves a success, that will allow them to boost spending on the worst-affected services, without needing to pull back too much on goods spending,” wrote Paul Ashworth, chief U.S. economist at Capital Economics.

Tens of thousands of people in Wisconsin whose applications for COVID-19 pandemic unemployment benefits were denied could be eligible for up to 79 weeks of unemployment payments.

There are three main categories of newly eligible workers:

• Those who declined to return to work at a site that wasn’t complying with COVID-19 safety standards, such as requiring face masks and physical distancing.
• Those working for an educational institution who became unemployed or partially unemployed after COVID-19 scrambled workers’ schedules.
• Those who were laid off or had their hours reduced as a result of COVID-19 measures, including restaurant workers.

Officials with the state Department of Workforce Development said they would be mailing notices to nearly 28,000 people who were denied benefits under the federal Pandemic Unemployment Assistance program to let them know they are eligible to reapply under the expanded guidelines. If they were denied before but found to be eligible now, they could be paid for the entire period of the pandemic thus far.

The Biden administration announced expanded eligibility for the federal program in February after President Joe Biden in an executive order said workers whose employers didn’t follow safety protocols could get the benefits. The Wednesday announcement by DWD follows from that executive order and guidance from Biden’s Department of Labor.

Wisconsinites who weren’t previously denied federal Pandemic Unemployment Assistance can also apply under the expanded eligibility. However, they’ll be limited in the number of weeks of back payments they can claim.

President Biden on Tuesday is expected to sign an executive order raising the minimum wage for federal contractors to $15 by March 2022.

At that time, the order will result in a 37-percent raise for federal contractors making the current contracting minimum $10.95, and setting their salary at over double the regular statutory federal minimum wage, which has been stuck at $7.25 since 2009.

Biden’s order would also phase out the tipped minimum wage, which stands at $7.25 by 2024, and set minimum wages for workers with disabilities on par with the standard minimum wage for contractors.

Federal agencies will have to begin incorporating the new wages into their contract solicitations by January 30, 2022, for implementation no later than March 30.

The new wages will apply to existing and multi-year contractors when their contracts receive their annual renewals, meaning some workers won’t see the benefits until later in the year.

Wisconsin’s troubled economic development agency improved its performance over the past fiscal year but it still must sharpen its oversight of tax credit contracts, policies on closing contracts and the accuracy of online data, according to an audit released Wednesday.

The Legislative Audit Bureau’s biennial review found the quasi-public Wisconsin Economic Development Corporation largely complied with state law and its contracts when administering tax credits, loans and grants to businesses in fiscal year 2019-20. By December, the agency had awarded about $250 million to businesses to help them through the pandemic.

The amount of past-due loans decreased from $7.6 million to $6.6 million in 2019 and 2020. The audit attributed the decline to WEDC’s writing off loans and amending contracts to defer repayments.

The agency’s largest tax credit awards, meanwhile, mostly went to historic redevelopment projects in the last fiscal year.

The top 20 tax credit awards the agency gave out totaled $44.5 million, of which $32.4 million went to projects through the state’s Historic Preservation Tax Credit program. Nine of WEDC’s 10 largest tax credit awards in the past fiscal year supported historic redevelopment projects. The Madison startup Capio Biosciences received the fourth-largest tax credit award for a $3 million incentive it received as part of the state’s qualified new business venture program, which supports investments in early-stage businesses.

WEDC CEO Melissa Hughes wrote in a three-page response to the audit that her staff has been working on ways to administer and track enterprise-zone wages and plans to close tax credit awards in a more timely manner and is working to make online data “more robust and digestible.” She said she will present an action plan to the Legislature’s audit committee within the next few months.

Foxconn Technology Group has reached a new deal with reduced tax breaks for its scaled back project in southeast Wisconsin.

Gov. Tony Evers and the world’s largest electronics manufacturer announced the new deal on Monday. Details of the new agreement were not immediately released.

It was scheduled to be approved at a Tuesday meeting of the Wisconsin Economic Development Corp., the state’s top jobs agency that previously negotiated the initial deal with Foxconn.

Yesterday, Wisconsin Supreme Court Justice Annette Kingsland Ziegler was elected by her fellow justices as the state’s next chief justice, effective May 1, 2021. Ziegler will take over from the current Chief Justice Patience Drake Roggensack, who did not seek re-election to the post.

The Chief Justice of the Supreme Court is the administrative head of the judicial system and exercises administrative authority pursuant to procedures adopted by the Supreme Court. In this role, the Chief Justice works with fellow justices, the director of state courts, chief judges and other administrators to ensure the courts operate smoothly and efficiently.

Justice Ziegler was first elected to the Supreme Court in 2007 and re-elected in 2017. Born in Grand Rapids, Michigan, Justice Ziegler received her bachelor’s degrees in Psychology and Business Administration from Hope College in Holland, Michigan in 1986. She earned her law degree from Marquette University in 1989.

The Wisconsin Department of Health Services (DHS) is instructing Wisconsin vaccine providers to stop administering the Johnson & Johnson COVID-19 vaccine due to a federal review of adverse side effects reported. The Centers for Disease Control (CDC) and U.S. Food and Drug Administration (FDA) issued a statement (link is external)saying six cases of a rare and severe type of blood clot called cerebral venous sinus thrombosis have been reported in the U.S. out of 6.8 million Johnson & Johnson vaccine doses given.

“We are pausing administration of the Johnson & Johnson vaccine out of an abundance of caution. At this time, these adverse events appear to be extremely rare,” said DHS Secretary-designee Karen Timberlake. “Vaccine providers should not administer the Johnson & Johnson vaccine at this time, and should hold on to the vaccine until federal review has been completed.”

“There is still a lot to learn about how the vaccine might cause the problems that occurred in the six patients, which included blood clots around the brain and low platelets, but they do appear to be very rare,” said Dr. Ryan Westergaard, Chief Medical Officer for DHS. “For residents who have received the Johnson & Johnson vaccine, be in contact with your health care provider if you have a severe headache or new vision problems during the first two weeks after receiving the vaccine.”

People who received the Johnson & Johnson vaccine should monitor for the following symptoms three weeks after their vaccination: severe headache, abdominal pain, leg pain, or shortness of breath. Symptoms associated with these severe events have occurred six to 13 days after vaccine receipt. Contact your health care provider and use the v-safe program(link is external) to report your symptoms.

The Pfizer and Moderna COVID-19 vaccines continue to remain extremely safe vaccines. DHS encourages everyone eligible to get the vaccine to continue with their vaccination, especially in light of variants. Wisconsin continues to have a good supply of these vaccines; 96% of the doses administered in the state have been Pfizer and Moderna.

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The Treasury Department and the Internal Revenue Service has issued Notice 2021-25 PDF providing guidance under the Taxpayer Certainty and Disaster Relief Act of 2020. The Act added a temporary exception to the 50% limit on the amount that businesses may deduct for food or beverages. The temporary exception allows a 100% deduction for food or beverages from restaurants.

Beginning January 1, 2021, through December 31, 2022, businesses can claim 100% of their food or beverage expenses paid to restaurants as long as the business owner (or an employee of the business) is present when food or beverages are provided and the expense is not lavish or extravagant under the circumstances.

Where can businesses get food and beverages and claim 100%?

Under the temporary provision, restaurants include businesses that prepare and sell food or beverages to retail customers for immediate on-premises and/or off-premises consumption. However, restaurants do not include businesses that primarily sell pre-packaged goods not for immediate consumption, such as grocery stores and convenience stores.

Additionally, an employer may not treat certain employer-operated eating facilities as restaurants, even if these facilities are operated by a third party under contract with the employer.

State Representative Mark Born (R-Beaver Dam) and Senator Howard Marklein (R-Spring Green) Co-Chairs of the Joint Committee on Finance(JFC), released the following statement regarding the committee’s plan to hold a public hearing and executive session on 11 bills related to the legislature’s plan to re-invest one-time, Federal funds from the American Rescue Plan Act (ARPA) to state priorities:

“We are on the starting line of the legislature’s work on the state budget, but we do not know how – or when – the Governor will allocate the massive amount of Federal funding available to Wisconsin in the most recent stimulus plan,” Sen. Marklein said. “Our legislation provides specific plans based on the real priorities of citizens statewide. We need to dedicate these funds in a meaningful way that will support the people of our state who are working to recover and move forward after the last unprecedented year.”

“We cannot ask state taxpayers to foot the bill if there is Federal cash available to us that could pay for our priorities. These are all tax dollars, paid for by tax payers. We need to spend them wisely,” Sen. Marklein said. “The Responsible Stimulus plan does that. It invests in people. It pays for infrastructure like local roads and broadband to help us recover. It will boost our economy.”

“The people of Wisconsin deserve to have their voices heard through their elected Representatives and Senators on how all of this federal money is spent,” said Rep. Born. “As I’ve said before, this money should not be unilaterally allocated by one person. Republicans in the legislature have put together a package of bills that truly reflect the priorities of the people of Wisconsin and the Governor should work with us to make these bills a reality.”