News of the Day

Wisconsin Republican legislative leaders said Tuesday they want to tap the state’s projected record-high $6.6 billion budget surplus to make “transformational” and once-a-generation tax law changes.

Senate Majority Leader Devin LeMahieu (R-Oostburg) said he wanted to move toward a flat income tax rate.

“We can make transformational tax changes in Wisconsin,” LeMahieu said. “We definitely need to drive down our top rates.”

Wisconsin’s income tax rates begin at 3.54% and increase to 7.65%. The top rate applies to single filers earning $280,950 and up; married joint filers making more than $374,600; and married people filing separate returns with taxable income of more than $187,300, according to the state Department of Revenue.

Assembly Speaker Robin Vos (R-Rochester) said he wanted to cut taxes “as much as we possibly can” and “it needs to be long term and permanent.” That includes eliminating a property tax, a tax paid by businesses. Evers last session vetoed a bill to eliminate the tax.

Wisconsin’s financial outlook appears even rosier than previously projected, with the state Department of Administration on Monday estimating the state’s general fund balance could surpass $6.5 billion by summer.

Updated projections released by the DOA underscore how increased state revenue over the course of the next two-year state budget is expected to result in a record-high general fund balance of more than $6.57 billion by the end of the current fiscal year on June 30. That balance does not include the state’s more than $1.7 billion budget stabilization fund, a rainy day fund to be used in times of emergency.

The head of the Wisconsin Department of Natural Resources is retiring after four years on the job, Gov. Tony Evers announced Friday.

Preston Cole has served as secretary of the department since Evers took office in 2019. Cole will be retiring on Wednesday, giving Evers an opportunity to choose a new leader of the agency for his second term.

“Preston has been an integral part of my administration since day one, and we are sorry to see him go,” Evers said in a statement.

Evers’ spokesperson, Britt Cudaback, said a replacement would be named as soon as possible.

Prior to leading the department as secretary, Cole served 11 years on the Natural Resources Board, including two years as chair in 2013 and 2014. He began his career with the Missouri Department of Conservation, where he was the first Black forester. He also served as commissioner of the Milwaukee Department of Neighborhood Services and as director of operations for the Milwaukee Department of Public Works.

The U.S. Energy Information Administration (EIA) expects that low inventories of distillate fuels, which are primarily consumed as diesel fuel and heating oil, will lead to high prices through early 2023. According to EIA’s November Short-Term Energy Outlook (STEO), diesel prices will remain higher than $5 per gallon the remainder of the year, and bills for homes that use heating oil will increase by 45% this winter season compared with last winter.

U.S. inventories of distillate fuels finished October at their lowest levels in any October since 1951.

“Inventories are just one part of the supply equation for diesel and other distillates,” said EIA Administrator Joe DeCarolis. “The distillate fuels in storage aren’t the only source of diesel we have to keep trucks and trains moving, but lower-than-average storage levels will contribute to higher costs for diesel and for heating fuels through the winter.”

EIA sees additional uncertainty in the global marketplace for distillates and other fuels as the European Union plans to ban imports of petroleum products from Russia in early 2023.

Housing starts declined by 4.2 percent from September to 1.43 million units, according to Census Bureau data released on Thursday.

The number of new building permits issued in October also fell from the previous month, dropping by 2.4 percent to 1.53 million.

“Both starts and permits fell behind September levels and behind levels from one year ago,” Zillow senior economist Nicole Bachaud wrote in an analysis.

“As the current affordability crisis burns on, builders are feeling demand for new homes slipping further away, depressing confidence in their ability to sell their completed projects at the prices they need,” Bachaud added.

The Federal Reserve’s series of interest rate hikes targeting rising inflation have led to high mortgage rates that are pushing prospective buyers out of the market.

Recent data shows that monthly mortgage payments have more than doubled from pre-pandemic levels reaching $1,840 for a typical single-family home after a 20 percent down payment.

These high rates are also driving home builder sentiment to decade lows, according to data released Wednesday by the National Association of Home Builders.

Americans stepped up their spending at retailers, restaurants, and auto dealers last month, a sign of consumer resilience as the holiday shopping season begins amid painfully high inflation and rising interest rates.

The government said Wednesday that retail sales rose 1.3% in October from September, up from a flat reading in September from August. The increase was led by car sales and higher gas prices. Still, excluding autos and gas, retail spending rose 0.9% last month.

Strong consumer demand could perpetuate inflation, but other trends may work in the other direction. Auto sales jumped 1.3% last month, the retail sales report showed, but that gain, in addition to people replacing cars in Florida, partly reflects a clearing of supply chain problems that have made more auto parts and semiconductor chips available. Auto production has rebounded, leading to greater supply, which can push prices down.

Gas station sales jumped 4.1% last month, though that largely reflected higher prices. Online sales rose 1.2%, and restaurant and bar sales moved up 1.6%.

A coalition of small businesses is urging Congressional leaders to prioritize an antitrust bill targeting tech giants during the lame-duck session.

The letter, sent to leadership in the House and Senate Tuesday asks lawmakers to make the bipartisan American Innovation and Choice Online Act a “top priority” in the session closing out the year.

The bill would aim to limit tech giants like Amazon, Meta, Apple and Google from preferencing their own service, according to the letter organized by Small Business Rising.

It added that the legislation represents “an unprecedented opportunity to start leveling the playing field for our small, independent businesses, and the window to do so is rapidly closing.”

Versions of the bill advanced out of the House and Senate Judiciary Committees with bipartisan support, but have not yet been called for floor votes.

Supporters — including Sen. Amy Klobuchar (D-Minn.), Sen. Chuck Grassley (R-Iowa), Rep. David Cicilline (D-R.I.) and Rep. Ken Buck (D-Colo.) — have been urging congressional leaders to call the bills to a vote.

The lame-duck session could be the best shot at advancing the bill, especially if Republicans take control of the House, since leading House GOP members have pushed back against the legislation.

Voters across Wisconsin passed nearly $1.7 billion of school district referendums in Tuesday’s election, according to data from the state Department of Public Instruction.

The 64 referendums that passed came from all across the state and ranged from $200,000 to $175 million — for a total of $1,699,156,999. Because there are multiple types of referendums school districts can bring to voters, some districts had more than one question on ballots, so all of that money is going to 49 districts throughout the state.

There are two types of referendums listed on the DPI database. A referendum to issue debt — also referred to as a capital referendum — allows a district to borrow money. Districts often use this for new construction, renovations and other building projects.

The other type allows districts to exceed their revenue limit, which is the maximum amount that may be raised through state general aid and property tax. It’s set by the state. These referendums are often referred to as operational referendums and can be recurring or nonrecurring.

Of the 64 referendums that passed, half were to exceed the revenue limit — 21 were nonrecurring and 11 were recurring. And although half of the approved referendums were to issue debt, they account for a majority of the money approved: $1.4 billion.

A federal judge in Texas on Thursday ruled that President Joe Biden’s plan to cancel hundreds of billions of dollars in student loan debt was unlawful and must be vacated.

In his 26-page ruling, Judge Mark Pittman said it was irrelevant if Biden’s plan was good public policy because the program was “one of the largest exercises of legislative power without congressional authority in the history of the United States.”

Pittman wrote that the HEROES Act – a law that provides loan assistance to military personnel and that was relied upon by the Biden administration to enact the relief plan – did not authorize the $400 billion student loan forgiveness program.

“In this country, we are not ruled by an all-powerful executive with a pen and a phone,” Pittman wrote. “Instead, we are ruled by a Constitution that provides for three distinct and independent branches of government.”

The debt relief plan had already been temporarily blocked by the St. Louis-based 8th U.S. Circuit Court of Appeals while it considers a request by six Republican-led states to enjoin it while they appealed the dismissal of their own lawsuit.

The plan, announced in August, calls for forgiving up to $10,000 in student loan debt for borrowers making less than $125,000 per year, or $250,000 for married couples. Borrowers who received Pell Grants to benefit lower-income college students will have up to $20,000 of their debt canceled. About 26 million Americans have applied for student loan forgiveness, and the U.S. Department of Education has already approved requests from 16 million.

The consumer price index, a broad-based measure of goods and services costs, increased 0.4% for the month and 7.7% from a year ago, according to a Bureau of Labor Statistics release Thursday.

Excluding volatile food and energy costs, so-called core CPI increased 0.3% for the month and 6.3% on an annual basis, compared with respective estimates of 0.5% and 6.5%.

A 2.4% decline in used vehicle prices helped bring down the inflation figures. Apparel prices fell 0.7% and medical care services were lower by 0.6%.

Shelter costs, which make up about one-third of the CPI, rose 0.8% for the month, the largest monthly gain since 1990, and up 6.9% from a year ago, their highest annual level since 1982. Also, fuel oil prices exploded 19.8% higher for the month and are up 68.5% on a 12-month basis.

The food index rose 0.6% for the month and 10.9% annually, while energy was up 1.8% and 17.6%, respectively.

The latest inflation reading comes as Federal Reserve officials have been deploying a series of aggressive interest rate hikes in an effort to bring down inflation running around its highest levels since the early 1980s.

In early November, the central bank approved its fourth consecutive 0.75 percentage point increase, taking its benchmark rate to a range of 3.75%-4%, the highest level in 14 years. Markets expect the Fed to continue raising, though at a possibly slower pace ahead before the fed funds rate tops out around 5% early next year.