Brian Dake

Governor Tony Evers vetoed several bills Friday that would have prevented Wisconsin communities from barring the use of vehicles or appliances powered by fossil fuels.

Two bills sought to prevent Wisconsin’s state and local governments from passing mandates that aim to shift away from vehicles or stoves that run on gas in favor of those powered by electricity. Another proposal sought to prevent communities from requiring specific sources of energy.

Republican lawmakers and supporters have said the proposals aimed to protect consumer choice. In his veto message, Evers said signing the bills would diminish the state’s ability to combat climate change by shifting to new technology. “Further, I also object to the Legislature’s continued efforts to preempt local control and undermine trust in local governments across our state,” Evers wrote. “The state should be a partner in —  not an obstacle to — addressing the unique challenges facing our local communities.”

Republican lawmakers have said they wanted to stop Wisconsin from following at least seven states, including California, that plan to ban gas-powered vehicles. States like New York have also sought to ban natural gas stoves and furnaces.

Wisconsin hasn’t proposed any such ban. However, Evers’ clean energy plan does call for incentives to buy electric appliances and it supports expansion of the state’s electric vehicle infrastructure. Evers has also set a goal for the state to use carbon-free electricity by 2050.

Around two dozen states have passed legislation to prevent local government bans on natural gas in buildings, according to E&E News.

Brendan Conway is a spokesperson for Milwaukee-based WEC Energy Group, which owns two of the state’s largest utilities. He said they’re disappointed with the governor’s veto.

“The bill would have prevented a patchwork of rules and regulations,” Conway said in a statement. “It also would have ensured customers could make their own energy choices whether they want to put solar panels on their roofs or use a gas stove to make dinner.”

State officials are now developing an implementation plan for more than $1 billion in federal dollars coming to Wisconsin through the Broadband Equity, Access, and Deployment Program.

During a meeting of the Governor’s Task Force on Broadband Access, Broadband Expansion Manager Rory Tikalsky yesterday provided an update on BEAD planning efforts in Wisconsin. His position is part of the Public Service Commission’s Wisconsin Broadband Office.

He explained planning efforts have pivoted from outreach and gathering feedback to writing a plan for “figuring out how to actually make this happen” in the next several years.

Wisconsin is set to receive about $1.06 billion in federal funding through the BEAD program, a $42.45 billion national effort established through the Infrastructure Investment and Jobs Act.

“We’re sprinting toward the finish of our BEAD five-year plan,” Tikalsky said. “That’s going to be due Aug. 28, but realistically we’ve got to finalize our content in the next week or two here, then polish and improve and everything else.”

Much of that plan will align with the task force’s third annual report, which was released early last month, Tikalsky noted.

Going into this fall, state officials will be developing an initial proposal for the program, which will include a comprehensive map of locations that will receive funding as well as scoring criteria, details on the allocation process and more. That proposal is due Dec. 27.

After a spring “state challenge process” focused on the eligibility map for funding allocations, Tikalsky said “by next spring, next summer, we’re going to start opening grant rounds, awarding grants — really trying to find a way to push money out the door and start construction.”

American Transmission Company, ITC Midwest and Dairyland Power Cooperative are building the 345-kilovolt Cardinal-Hickory Creek transmission line that runs more than 100 miles from Dane County to Dubuque County in Iowa.

The project’s co-owners told the Wisconsin Public Service Commission in a filing on Friday that they expect the cost to build the $492 million power line to grow by $89.8 million or 18 percent beyond the initial price tag.

Alissa Braatz, an ATC spokesperson for the project’s co-owners, said in a statement that it’s critical for them to be wise with rising costs on behalf of their energy consumers, investors and owners. “And we commit to managing escalating costs to the greatest extent possible,” Braatz said.

In the filing, the utilities highlighted “inflationary cost increases” in the cost of construction materials, labor and land acquisition since project estimates were developed in 2018. The Public Service Commission approved the project the following summer.

According to the filing, the price of steel for ATC and ITC Midwest increased on average roughly 112 percent for steel poles. In addition, the cost of aluminum and steel for conductor wires rose an average of about 59 percent. Labor costs for ATC also went up around 12 percent while ITC Midwest saw an increase of roughly 32 percent from 2018. Land acquisition costs also increased 95 percent in Dane and Iowa counties due largely to increasing land values.

Meghan Sovey, a spokesperson for the commission, said in an email that PSC continues to monitor the project’s progress and costs. Sovey added the commission has authority “if and when appropriate” to reopen the project’s proceedings or take other action.

As the construction of the line nears completion, Braatz said the project’s co-owners are working with the U.S. Fish and Wildlife Service as it weighs the utilities’ proposal for a land exchange. The line’s owners are also coordinating with the Rural Utilities Services as the agency completes a supplemental environmental assessment on what utilities referred to as minor route changes. They hope the project will secure the necessary approvals to place the line in service by December.

Fitch announced Tuesday it has officially downgraded the United States’ long-term foreign-currency issuer default rating to “AA+” from “AAA,” saying the downgrade “reflects the expected fiscal deterioration” and the nation’s heavy debt burden.

The ratings agency pointed the America’s “erosion of governance,” rising deficits, and tightening by the Federal Reserve. It also said its expects the U.S. economy to slip into a mild recession in the fourth quarter.

Investors use credit ratings to assess the risk profile of companies and governments when they raise financing in the debt capital markets. Generally, the lower a borrower’s rating, the higher its financing costs.

The agency also said it expects the US federal deficit to grow from 3.7% of GDP in 2022, to 6.3% of GDP in 2023.

Wisconsin companies will pay 8.4% less in worker’s compensation insurance rates starting Oct. 1, 2023, benefiting businesses around the state, the Wisconsin Department of Workforce Development reported. The latest reduction in premiums is expected to save Wisconsin employers some $148 million on policies starting on or after October 1, 2023.

The lower rates reflect Wisconsin employers’ attention to workplace safety for the benefit of workers and employers alike. Moreover, it’s a way for Wisconsin companies to stand out as they seek to attract and retain staff during a time of near-record low unemployment. The 2023 rate decrease, approved by the Wisconsin Office of the Commissioner of Insurance, marks the eighth year in a row worker’s compensation insurance premiums have declined in Wisconsin. The actual rates that inform premium amounts vary by employers based on factors such as injury risk exposure.

Worker’s compensation insurance rates are adjusted annually by a committee of actuaries from members of the Wisconsin Compensation Rating Bureau. This independent body examines and selects the methodology and trends that produce the proposed rate adjustment, which is then reviewed and approved by the Wisconsin Commissioner of Insurance. While the overall rate level will decrease by 8.4%, the impact to policyholders will vary based on specific circumstances.

“The continued decreases in worker’s compensation rates reflect the workplace safety practices that support a strong workforce in our state,” said Insurance Commissioner Nathan Houdek. “Employers doing business in Wisconsin can count on our competitive insurance marketplace for affordable, high-quality coverage for their business and employees.”

DWD’s Worker’s Compensation (WC) Division administers the state’s WC program through a collaboration with WCRB, OCI, Self-Insurers Council and the Worker’s Compensation Advisory Council, which is composed of representatives from management and labor and recommends WC law changes. Most employers in Wisconsin are legally required to have Worker’s Compensation insurance policies.

With the Internal Revenue Service making substantial progress in the ongoing effort related to the Employee Retention Credit (ERC) claims, Commissioner Danny Werfel said the agency has entered a new phase of increasing scrutiny on dubious submissions while renewing consumer warnings against aggressive marketing.

Speaking Tuesday at a special roundtable session of tax professionals in Atlanta, Werfel noted the IRS has shifted efforts after successfully clearing the backlog of valid Employee Retention Credits (ERC) claims. Now, the agency is intensifying compliance work and putting in place additional procedures to deal with fraud in the program.

Werfel told a group of tax professionals dealing with fall-out from aggressive ERC claims that the IRS has increased audit and criminal investigation work on these claims, both on the promoters as well as those businesses filing dubious claims.

“The further we get from the pandemic, we believe the percentage of legitimate claims coming in is declining,” Werfel told attendees at the IRS Nationwide Tax Forum in Atlanta. “Instead, we continue to see more and more questionable claims coming in following the onslaught of misleading marketing from promoters pushing businesses to apply. To address this, the IRS continues to intensify our compliance work in this area.”

The Employee Retention Credit, also sometimes called the Employee Retention Tax Credit or ERTC, is a tax credit enacted to help businesses during the pandemic that was subsequently amended three times by Congress. Many businesses legitimately apply for the credit, but aggressive marketing has overshadowed the program. The period of eligibility for the credit for affected businesses is very limited, covering only between March 13, 2020, and Dec. 31, 2021.

“Under the current law, businesses can typically continue to file claims for the credit until April 15, 2025. That raises future concerns,” Werfel said.

“The amount of misleading marketing around this credit is staggering, and it is creating an array of problems for tax professionals and the IRS while adding risk for businesses improperly claiming the credit,” Werfel said. “A terrible scenario is unfolding that hurts everyone involved — except the promoters.”

“This was not how the law was meant to work, and Congress can help with this situation,” Werfel added. “We will work with Treasury to explore legislative solutions we can share with Congress to help address fraud and error, including potentially putting an earlier ending date for businesses to claim the credit and increase IRS oversight of return preparers.”

The IRS continues to urge businesses, tax-exempt organizations and others considering applying for this credit to carefully review the official requirements for this limited program before applying. In the meantime, the IRS continues to intensify compliance activities involving ERC claims.

GDP, the sum of all goods and services activity, increased at a 2.4% annualized rate for the April-through-June period. Consumer spending powered the solid quarter, aided by increases in nonresidential fixed investment, government spending and inventory growth.

Consumer spending, as gauged by the department’s personal consumption expenditures index, increased 1.6% and accounted for 68% of all economic activity during the quarter. That did market a pullback from the 4.2% increase in the first quarter but still showed resiliency amid higher interest rates and persistent inflation.

Gross private domestic investment increased by 5.7% after tumbling 11.9% in the first quarter. A 10.8% surge in equipment and a 9.7% increase in structures helped power that gain.

Still, signs of trouble persist.

Markets have been betting on a recession, pushing the 2-year Treasury yield well above that for the 10-year note. That phenomenon, called an inverted yield curve, has a near-perfect record for indicating a recession in the next 12 months.

Similarly, the inversion of the 3-month and 10-year curve is pointing to a 67% chance of contraction as of the end of June, according to a New York Fed gauge.

The Federal Reserve raised interest rates by a quarter of a percentage point on Wednesday and Fed Chair Jerome Powell said the economy still needed to slow and the labor market to weaken for inflation to “credibly” return to the U.S. central bank’s 2% target.

The hike, the Fed’s 11th in its last 12 meetings, set the benchmark overnight interest rate in the 5.25%-5.50% range, a level last seen just prior to the 2007 housing market crash and which has not been consistently exceeded for about 22 years.

“The (Federal Open Market) Committee will continue to assess additional information and its implications for monetary policy,” the Fed said in language that was little changed from its June 14 statement and which left the central bank’s policy options open as it searches for a stopping point to the current tightening cycle.

Powell made no promises either way, with a September meeting eight weeks from now considered “live” for another rate increase, though a continued slowing of inflation and weaker economic data may also prompt policymakers to pause.

In a press conference following the Fed’s latest policy move, the Fed chief said the central bank was very much looking at “the totality” of incoming data, and particularly studying it for signs that the economy is heading for a period of “below-trend” growth that Powell thinks is necessary for inflation to fall.

Key price measures are still increasing at more than double the Fed’s target. While inflation has been easing, that has so far happened with little apparent cost to the labor market, where the unemployment rate remains at a low 3.6%.

State lawmakers left Madison for the summer without agreeing to a funding deal to fix the home of the Brewers, in return for the team promising to stay in Milwaukee.

Governor Tony Evers proposed using $290 million from the state’s surplus to pay for renovations and maintenance at American Family Field.

Republicans want to look at using sales tax revenue instead and potentially require more buy-in from local taxpayers.

“So somewhere between the governor’s proposal and the legislature identifying there’s $25 million of tax revenue coming from the economic impact of baseball – somewhere between first base and third base there’s a deal to be made,” said Tim Sheehy, the president of the Metropolitan Milwaukee Association of Commerce.

Some Milwaukee County Board and council members oppose the idea of using taxpayer money.

The governor told WISN 12 News he believes his plan is best, but he is open to negotiations.

Yesterday, the Department of Workforce Development (DWD)  released the U.S. Bureau of Labor Statistics (BLS) job totals for the month of June 2023, which showed Wisconsin’s total nonfarm jobs reached a record high of 3,006,900. This is 52,900 more jobs than a year ago and an increase of 6,900 over the previous month.

Preliminary employment estimates for June 2023 showed Wisconsin’s seasonally adjusted unemployment rate was 2.5%. The total labor force grew by 14,000 and employment increased by 10,700 over the month of June. Additionally, the state’s total labor force participation rate increased to 65.3%. Nationwide for the month of June, the U.S. unemployment rate was 3.6%, 1.1 percentage points above Wisconsin’s rate, and the national labor force participation rate of 62.6%.