News of the Day

The Department of Public Instruction will not receive $50 million to implement a reading bill passed in 2023, the Wisconsin Supreme Court unanimously ruled Wednesday.

The court found the Joint Finance Committee is not improperly withholding funds from DPI. The court also reversed a lower court’s finding that Governor Evers was acting within his constitutional authority when he used his partial veto authority last year on the reading bill.

In a unanimous opinion Wednesday written by conservative Justice Rebecca Bradley, the Supreme Court ruled against Evers.

The Supreme Court ruled Wednesday the funding bill was not an appropriations bill, therefore the Evers’ partial veto was unconstitutional.

“Although the executive branch may be frustrated by constitutional limits on the governor’s power to veto non-appropriation bills, the judiciary must respect the People’s choice to impose them,” Bradley wrote.

Manufacturing and construction employment in Wisconsin is projected to shrink this year as the state’s overall labor market “continues to grow at a modest but steady rate.”

That’s according to the state Department of Revenue’s economic forecast for May, which shows job growth in Wisconsin this year is expected to be focused in education and health services, leisure and hospitality, and other services.

Report authors note “unusually high uncertainty” is shaping economic forecasts as tariffs present a top risk for the economy.

The report shows state job growth in 2024 has been revised downward from 0.9% to 0.6% for overall employment and from 0.7% to 0.4% for private employment, based on the state’s Current Employment Statistics data. These figures show state employment rose by 0.5% in the first quarter of this year compared to one year earlier, which falls below the U.S. rate of 1.2%.

Total state employment is projected to rise by 0.7% this year and 0.2% next year followed by “minimal growth thereafter,” in line with the national trend, DOR says.

State unemployment averaged 3% in 2024, below the national average of 4%, the report shows. Wisconsin’s unemployment rate is expected to peak at 4.1% in 2027, “outperforming the national trend.”

Meanwhile, DOR reports personal income in the state rose 4.9% last year, exceeding the Great Lakes region’s average of 4.6% but fell below the national rate of 5.3%. Income growth is being driven by higher net earnings and personal transfer receipts, the report shows.

Looking ahead, the state’s nominal personal income is expected to increase 4% this year, along with a 3.7% boost to wages and salaries and a 4.7% increase in wage supplements. At the same time, personal income growth is “projected to exceed 4.0% annually over the forecast horizon” while average wage and salary growth is forecast at 4.1%.

Housing affordability and the number of houses available increased slightly, according to the latest Wisconsin Realtors Association report.

The report says affordability improved by 5.1% from May 2024 to May 2025. Year-to-date home sales were down 2.7% compared to 2024. The median price rose 6.8% to $315,000.

Wisconsin residents’ debt-to-income ratio was 11th lowest among U.S. states in 2024, a new Forward Analytics report shows.

The research organization, part of the Wisconsin Counties Association, yesterday issued its “Badgers on a Budget” report, which explores household finance trends in the state and compares them to the rest of the country. It hinges on the Federal Reserve’s debt-to-income ratio, which includes household income and most types of consumer debt with the exception of student loans.

The state’s ratio was 1.202 in 2019, which was 12th lowest in the country. Its slight dip to 1.198 by 2024 was “near the average” decline for the period, the report shows, and made it the 3rd lowest ratio in the Midwest region for that year.

“Despite the financial impacts of the pandemic, Wisconsin households seem to have continued being financially responsible,” wrote author Kevin Dospoy, deputy director of Forward Analytics.

Between 2019 and 2024, per capita auto loan debt in the state rose 14.3% from $4,000 to $4,570. That’s a smaller increase than the national average but higher than all other bordering states except for Michigan, which saw a 25% increase — the largest in the country for the study period.

The report shows the state’s per capita auto loan debt last year was the 7th lowest in the country. Still, Dospoy notes 3.5% of all auto loan debt was delinquent in the state last year, a “significant increase” from 2.7% in 2019.

Meanwhile, per capita credit card debt in the state increased 18.1% from $2,770 to $3,270 over the same period. But at the same time, households in the state reduced their credit card balances relative to other states, going from the 11th lowest for this measure to 7th lowest. And the state’s credit card debt 90-day delinquency rate last year, 7.6%, was the lowest rate in the country. The national average was 11.2%.

The report also shows the state’s median mortgage payment was $1,245 at the end of 2024, the 10th lowest in the country and 3rd lowest among bordering states. The typical mortgage payment in the state was about 19.8% of household income for the year, the second lowest in the country after Vermont with 18.9%.

“In terms of financial impacts that can be controlled by individual households, such as the amount of personal debt, Wisconsinites fare quite well, especially relative to neighboring states,” Dospoy wrote. “As the cost of housing and most goods and services remain high, residents of the Badger state will likely continue to exercise their frugality and financial caution.”

The Federal Reserve on Wednesday kept interest rates steady amid expectations of higher inflation and lower economic growth ahead, and still pointed to two reductions later this year.

With markets expecting no chance of a central bank move this week, the Federal Open Market Committee kept its key borrowing rate targeted in a range between 4.25%-4.5%, where it has been since December.

Along with the rate decision, the committee indicated, through its closely watched “dot plot,” that two cuts by the end of 2025 are still on the table. However, it lopped off one reduction for both 2026 and 2027, putting the expected future rate cuts at four, or a full percentage point.

The plot indicated continued uncertainty from Fed officials about the future of rates. Each dot represents one official’s expectations for rates. There was a wide dispersion on the matrix, with an outlook pointing to a fed funds rate around 3.4% in 2027.

Seven of the 19 participants indicated they wanted no cuts this year, up from four in March. However, the committee approved the policy statement unanimously.

Economic projections from meeting participants pointed to further stagflationary pressures, with participants seeing the gross domestic product advancing at a 1.4% pace in 2025 and inflation hitting 3%.

In a unanimous decision, the Wisconsin Supreme Court has sided with Wisconsin’s attorney general in a dispute about the power to settle some lawsuits.

The Department of Justice argued that the attorney general should have control over specific types of cases. That includes cases that have to do with executive authority, such as those enforcing environmental and consumer protection laws, the DOJ argued. The AG’s office also argued it applies to cases brought at the request of agencies for programs those agencies are tasked by law with administering.

Attorneys for Wisconsin’s Republican-controlled Legislature, however, argued that lawmakers have an “institutional interest” in overseeing settlements — especially when those settlements result in money paid to the state.

In a decision written by Justice Brian Hagedorn, justices concluded that while the Legislature can have power over the attorney general’s actions in some cases, that doesn’t apply to every situation.

Specifically, justices said that under state laws, the attorney general has authority over civil enforcement actions as well as cases directed by state agencies.

“The settlement approval process allows a committee of the Legislature to control how the executive exercises its lawfully given statutory authority,” the decision states. “While that may be permissible in the realm of shared powers, it is impermissible in the realm of core powers. As the Legislature has failed to demonstrate that these types of cases implicate an institutional interest granting the Legislature a seat at the table, the powers at issue are core executive powers. Accordingly, there is no constitutional justification for requiring JFC sign-off on settlement agreements within these categories of cases.”

Consumers spending pulled back sharply in May, the Commerce Department reported Tuesday. Retail sales declined 0.9%, according to numbers adjusted for seasonality but not inflation. Excluding autos, sales fell 0.3%.

Building materials and garden stores saw sales fall 2.7%, while sliding energy prices pushed gasoline station receipts down 2%. Motor vehicles and parts retailers were off 3.5%, while bars and restaurants saw sales decline 0.9%.

On the plus side, miscellaneous retailers gained 2.9%, while online sales rose 0.9% and furniture stores increased sales by 1.2%.

The pullback in retail sales came despite surveys showing that consumer sentiment actually improved in May, though compared with levels that had been falling through the year.

Wisconsin’s tourism industry experienced its third-straight year of record-setting economic impact in 2024 and set a new all-time high for the number of visits to the Badger State, Gov. Tony Evers announced Tuesday.

The state’s tourism industry generated $25.8 billion in total economic impact last year, beating the record set in 2023 of $25 billion, according to data from the state Department of Tourism.

On top of monetary impact, there were also a record 114.4 million visits to Wisconsin in 2024, beating the previous record of 113.2 million visits set in 2019, the department said.

“That number is built off of repeat visitors,” said Craig Trost, communications director for the Department of Tourism. “They are the backbone of our tourism economy.”

The agency, more commonly known as Travel Wisconsin, counts a visit as any trip a person takes that’s more than 50 miles from home, meaning the 114.4 million number includes Wisconsinites traveling between communities.

The visitor economy also generated $1.7 billion in state and local taxes, offsetting taxes for residents by $678 per household, according to a report from the tourism department.

While most counties did see their economic impact from tourism increase last year, several saw decreases, according to state data. Counties with declines in tourism economic impact include Ashland, Clark, Forest, Grant, Iowa, Iron, Juneau, Lafayette, Monroe, Taylor and Trempealeau.

President Trump on Thursday signed legislation that terminates the state of California’s electric vehicle (EV) mandate.

The president signed a law repealing a waiver the Biden administration’s Environmental Protection Agency (EPA) granted California to enforce its own emissions standard that would have required the minimum percentage of zero-emission cars to rise from 35% for the 2026 model year to 100% in 2035. Eleven other states signed on to California’s EV Mandate.

A leading auto industry trade group that represents Detroit’s Big Three of Ford, GM and Stellantis, along with numerous other leading automakers, praised the move to repeal the California EV standard.

“Everyone agreed these EV sales mandates were never achievable and wildly unrealistic,” John Bozzella, president and CEO of the Alliance for Automotive Innovation, said in a statement. “Worse than unachievable – these EV mandates were going to be harmful. Harmful to auto affordability, to consumer choice, to industry competitiveness and to economic activity.”

The Commerce Department’s Bureau of Economic Analysis (BEA) released its advance estimate for first quarter gross domestic product (GDP), which found the U.S. economy contracted at an annual rate of 0.3% in the first quarter, which runs from January through March.

The first quarter’s 0.3% contraction was slower than the 2.4% GDP growth recorded in the fourth quarter. The quarterly contraction was the first since the first quarter of 2022. The decline in GDP was attributed primarily to an increase in imports, which count as a subtraction in the calculation of GDP, as well as a decrease in government spending. Those shifts were partially offset by increases in investment, consumer spending and exports.

The 41% surge in imports was driven by consumer goods, primarily pharmaceutical goods, medicines and vitamins; and by capital goods like computers and parts.

Consumer spending rose 1.8% with gains for both services (+2.4%) and goods (+0.5%), as increases in spending on services were widespread and led by healthcare, housing and utilities. Within spending on goods, a 2.7% increase in nondurable goods was partly offset by a 3.4% decrease in durable goods.

Business investment rose 21.9% in the first quarter after it posted a 5.6% decline in the fourth quarter. Nonresidential investment was up 9.8% in the quarter, led by a 22.5% increase in equipment spending.

Disposable personal income was 2.7% in the first quarter, up from 1.9% in the fourth quarter.

Personal saving as a percentage of personal income was 4% in the first quarter, up from 3.7% in the fourth quarter – though it’s down from 5.4% in the first quarter of 2024.

Government spending was down 1.4% in the first quarter led by a 5.1% drop in federal government expenditures. Federal spending on national defense activities was down 8%, while nondefense spending declined just 1%. State and local government spending rose by 0.8%, the slowest growth since the second quarter of 2022.