Brian Dake

The U.S. economy is showing signs of weakening, with momentum slowing, fiscal stimulus decreasing and interest rates rising, according to a fourth quarter market review from Madison-based First Business Financial Services Inc.

Among the concerns for 2019 are the U.S.-China relationship, particularly when it comes to tariffs; the partial government shutdown; increasing market volatility; and falling consumer confidence.

In addition, manufacturers’ confidence is at its lowest point since October 2016 and manufacturing growth has been slowing, with the national reading from the Institute for Supply Management at 54.1 in December.

In the near term, though, First Business expects the economy will continue expanding. Consumers upped their discretionary spending and real consumption in the fourth quarter, spending more than $1 trillion during the holiday season. Inflation remains in check, at 2.2 percent year-over-year as of November. And employers added 312,000 jobs in December and increased average hourly earnings by 3.2 percent in 2018, which were positive signs.

The dollar continues to be strong, which is an indication of a strong U.S. economy and tight monetary policy, but First Business Bank doesn’t expect that to last long.

“The economic expansion will likely continue into 2019 at a slow and steady pace,” the report says. “At almost 10 years old, this is the second-longest expansion since 1900. Although growth accelerated meaningfully in 2018 on the wings of fiscal stimulus and an improving trade deficit, moving forward growth will moderate as weak productivity, labor force dynamics, waning trade numbers, fading trade stimulus, and higher interests rates slow it to 2 percent or less in 2019 and beyond.”

Assembly Speaker Robin Vos used his first speech of the new legislative session to emphasize lawmakers are the most important branch of government.

Vos told the Assembly following inaugurations Monday, Jan. 7 that the Wisconsin Constitution lists the Legislature first among the three branches of government. He said some may want the Legislature to “veer into the left lane” since Evers is now the governor but Republicans won’t let government expand at the expense of the people’s freedoms and compromise doesn’t mean compromising your ideas.

In a statement, Vos said: “Today we celebrate Wisconsin and our representative democracy. These next two years will bring new challenges and opportunities. I’m honored to once again serve Racine County and Wisconsin in this capacity. I’m excited to get to work. We can’t allow the state to reverse course and undo the progress that we have made over the last eight years. We have reduced the size of government, invested in education, created a welcoming business climate and we were still able to cut taxes by more than $8 billion.”

Democrat Tony Evers is set to take the oath of office and replace Gov. Scott Walker during a noon ceremony Monday at the state Capitol, ending eight years of Republican dominance in Wisconsin.

 Gov.-elect Tony Evers filled out most of his cabinet Thursday by picking a former Obama administration official, two Democratic state lawmakers and two aides who serve him as the state schools superintendent.

Evers, a Democrat who will be sworn in as governor Monday, announced at his transition office that Andrea Palm would serve as his health secretary. Palm was a senior counselor to the secretary of the U.S. Department of Health and Human Services under President Barack Obama from 2014 to 2017. Before that, she worked five years as a health policy adviser to then-U.S. Sen. Hillary Clinton.

Also Thursday, Evers selected state Rep. Peter Barca of Kenosha as revenue secretary and state Sen. Caleb Frostman of Sturgeon Bay as workforce development secretary.

He named Emilie Amundson as secretary of the Department of Children and Families. Amundson is now chief of staff at the Department of Public Instruction, which is headed by Evers as the state schools superintendent. Evers is turning the job of schools superintendent over to longtime Madison educator Carolyn Stanford Taylor once he becomes governor.

For his secretary of the Department of Safety and Professional Services, Evers chose Dawn Crim. She now assists Evers as assistant state superintendent for student and school success. Previously, Crim worked for two decades at the University of Wisconsin System in various rules, including assistant coach for women’s basketball and director of community relations for UW-Madison.

Evers is expected to name a director of the Wisconsin Housing and Economic Development Authority soon.

Wisconsin tax collection officials say a boost in the number of auditors generated an additional $72 million in revenue in 2018.

The State Journal reports the additional revenue, while $10 million short of the Department of Revenue’s goal for 2018, in part is generated by the state’s increased focus on collecting taxes from out-of-state businesses that may not be aware they owe Wisconsin taxes.

Lawmakers set aside nearly $14 million in the 2015 budget to fund more than 100 additional positions in the revenue department to better ensure businesses outside the state were paying their required Wisconsin taxes. Before the positions were added, the state had about 290 tax auditors.

Governor-elect and State Superintendent Tony Evers announced today his intention to appoint current Assistant State Superintendent Carolyn Stanford Taylor as the next state superintendent following his oath of office on January 7.

“Carolyn is a dedicated, thoughtful leader, who puts the best interests of kids before all else,” Evers said. “She is known and respected throughout the education community for her commitment to equity and her work to help all students reach academic success. I have known Carolyn for the better part of three decades and know she will be an exceptional state superintendent.”

Stanford Taylor is the first female, African-American appointed to serve as an assistant state superintendent. She will be Wisconsin’s first African-American state superintendent of public instruction. Carolyn currently oversees the Special Education Team, one of the agency’s largest teams; the Student Services / Prevention and Wellness Team, which focuses on student safety, support, and engagement; and the residential schools for students who are blind and visually impaired in Janesville and students who are deaf and hard of hearing in Delavan. She is the 2018 Virginia Hart Special Recognition recipient, an honor bestowed by the Department of Administration, Division of Personnel Management, to female state employees who are making a difference through their service to Wisconsin.

The state superintendent of public instruction oversees Wisconsin’s educational system and leads the Department of Public Instruction. The position is a non-partisan, constitutional officer, responsible for providing guidance and oversight to the state’s primary and secondary schools, licensing educators, and administering funds.

When a vacancy occurs with the state superintendent, state law allows the governor to appoint a replacement to serve out the remainder of the term. The last such appointment took place when then State Superintendent Herbert Grover resigned, and former Governor Tommy G. Thompson appointed Lee Dreyfus.

Fifty-four percent of Wisconsin bank leaders expect the state’s economy to remain the same over the next six months, while 25 percent say it will weaken and 21 percent expect it to grow, according to a new survey by the Wisconsin Bankers Association.

About 27 percent of Wisconsin bank CEOs and presidents view the state’s current economic health as excellent, up from 9 percent at the end of 2017. Another 58 percent of respondents rated the state’s economy as good, down from 80 percent at the end of 2017. And 15 percent describe the Wisconsin economy’s health as fair (up from 11 percent), while 0 percent rated it poor (flat).

The current demand for business loans is good, according to 65 percent of respondents (up from 59 percent in 2017). Another 26 percent said business loan demand is fair (down from 37 percent), while 5 percent said it is excellent (up from 3 percent) and 3 percent said it’s poor (up from 1 percent).

Over the next six months, 63 percent of bankers expect business loan demand to stay the same (up from 43 percent), 22 percent expect demand to grow (down from 53 percent) and 16 percent expect it to weaken (up from 4 percent).

“As predicted in our last survey, 2018 was a great year for Wisconsin’s economy, as well as lending activity. It’s very encouraging to see most bankers believe 2019 will continue that strong performance,” said Rose Oswald Poels, president and chief executive officer of WBA.

“Bankers are the best barometers of the economy as they see all segments of every marketplace. They work together with their communities and are the first to see and understand Wisconsin’s economic trends due to their customers’ activities. In turn, our members use that information to help their communities prosper.”

Governor-elect Tony Evers continued to fill out his cabinet with the announcement of four more appointments. Rebecca Cameron Valcq will serve as Chair of the Public Service Commission; Craig Thompson will serve as Department of Transportation secretary; Mark Afable will serve as Commissioner of Insurance; and Brad Pfaff will serve as Department of Agriculture, Trade and Consumer Protection secretary.

Rebecca Cameron Valcq, Public Service Commission

Rebecca Cameron Valcq is currently a partner at Quarles & Brady in the Energy, Environment and Natural Resources Practice Group. Prior to joining the firm, Valcq spent 15 years as regulatory counsel for We Energies where, among other responsibilities, she represented the company before the Public Service Commission in Wisconsin and advised management on multiple areas of compliance.

Craig Thompson, Department of Transportation

Craig Thompson currently serves as the Executive Director of the Transportation Development Association of Wisconsin (TDA). Prior to joining TDA in 2007, he served as the legislative director for the Wisconsin Counties Association where he managed legislative initiatives at the state and federal levels. Thompson, a Racine native, has also been appointed to numerous boards by Wisconsin governors from both parties.

Mark Afable, Commissioner of Insurance

Mark Afable currently serves as the chief legal officer at American Family with corporate legal, government affairs, and compliance and claims legal divisions reporting to him. He joined American Family in 1994 and has served numerous roles in the company. Before joining American Family, Mark served as counsel for the National Association of Independent Insurers and worked for Allstate Insurance in the corporate legal area.

Brad Pfaff, Department of Agriculture, Trade and Consumer Protection

Brad Pfaff currently serves as the deputy chief of staff to U.S. Representative Ron Kind. Born and raised on a dairy farm in Western Wisconsin, he has spent most of his career working on behalf of Wisconsin farmers and rural residents. Previously, he served in the U.S. Department of Agriculture Farm Service Agency as the executive director, where he oversaw the implementation of federal crop assistance programs, the Conservation Reserve Program, and federal farm loan programs. Pfaff grew up on a dairy farm in La Crosse County.