Month: May 2023

Wisconsin’s budget forecast dipped slightly Monday, but the latest projection still calls for the state to collect about $6.9 billion more than anticipated by the end of June.

The projection from the nonpartisan Legislative Fiscal Bureau estimates that taxes collected over the next two years will be down about $755 million, or about 1% less than the previous forecast made four months ago. Taking into account other short-term cost savings, the surplus shrank from $7.1 billion to nearly $6.9 billion.

Republicans who control the Legislature have tried to temper excitement over the surplus. The Republican co-chairs of the Legislature’s budget-writing Joint Finance Committee said the latest downward estimate confirms that the Legislature is on the right track in creating a “cautious budget.”

“The re-estimates reflect the current economic environment we are in and the reality we face over the next three years,” Sen. Howard Marklein and Rep. Mark Born said in a joint statement. “In response to this reality, we will continue to craft a responsible budget that is made for Wisconsin.”

The new projection comes as lawmakers, Gov. Tony Evers and others are trying to strike a deal on a new, multibillion-dollar aid plan for local governments ahead of a vote Wednesday in the state Assembly.

The new forecast also comes ahead of votes in coming weeks over tax cuts, funding for K-12 schools and the University of Wisconsin System and a host of other priorities and programs as lawmakers piece together the next two-year state budget.

Three utilities have submitted proposals to the Public Service Commission of Wisconsin to increase rates in 2024, and consumer advocates worry about how rate hikes could affect customers.

Those utilities are Alliant Energy, Xcel Energy and Madison Gas and Electric. The Public Service Commission, or PSC, is reviewing their requests for adjusted rates.  The utilities cite the upfront costs of renewable energy projects as one of the factors for the proposed rate increases, which they say could help stem rate increases in the long run.

Of the three to propose rate increases so far, Alliant’s were the steepest. The Madison-based utility, which serves south central and parts of central Wisconsin, applied for electric rate increases of 8.4 percent next year and 5.4 percent in 2025, along with a natural gas increase of 6.3 percent in 2024.

The company is also looking to add a surcharge to customers beginning in October and running through 2025 to recover $122.5 million in lost revenue from higher than expected natural gas costs in 2022. That surcharge would equate to a roughly 4.1 percent rate increase for customers.

Xcel Energy’s proposed rate increase for 2024 came in between those proposed by Alliant and Madison Gas and Electric. Xcel Energy serves parts of western and northwest Wisconsin.

For 2024, the utility requested a 4.8 percent increase in its electric rates and a 5.3 percent increase in its gas rates for the year. Xcel did not propose additional increases for 2025.

In a press release, Xcel said its proposal equates to an estimated increase for residential electric customers of $9.54 per month, and $4.54 for natural gas customers.

Madison Gas and Electric, or MGE, proposed the smallest rate increases of the three utilities with a 3.75 percent electric increase next year and a 3.41 percent increase in 2025. It also asked for gas increases of 2.56 percent in 2024 and 1.66 percent in 2025. The utility serves the Madison area, as well as parts of southwest and central Wisconsin.

The Biden administration proposed new limits Thursday on greenhouse gas emissions from coal- and gas-fired power plants. A rule unveiled by the Environmental Protection Agency could force power plants to capture smokestack emissions using a technology that has long been promised but is not in widespread use in the U.S.

If finalized, the proposed regulation would mark the first time the federal government has restricted carbon dioxide emissions from existing power plants, which generate about 25% of U.S. greenhouse gas pollution, second only to the transportation sector. The rule also would apply to future electric plants and would avoid up to 617 million metric tons of carbon dioxide through 2042, equivalent to annual emissions of 137 million passenger vehicles, the EPA said.

Almost all the coal plants – along with large, frequently used gas-fired power plants – would have to cut or capture nearly all their carbon dioxide emissions by 2038, the EPA said. Plants that cannot meet the new standards would be forced to retire.

The plan is likely to be challenged by industry groups and Republican-leaning states, which have accused the Democratic administration of overreach on environmental regulations and warn of a pending reliability crisis for the electric grid.

Coal provides about 20% of U.S. electricity, down from about 45% in 2010. Natural gas provides about 40% of U.S. electricity. The remainder comes from nuclear energy and renewables such as wind, solar and hydropower.

Tom Kuhn, president of the Edison Electric Institute, which represents U.S. investor-owned electric companies, said carbon emissions from the U.S. power sector are at the same level as in 1984, while electricity use has climbed 73% since then.

The EPA rule would not mandate use of equipment to capture and store carbon emissions – a technology that is expensive and still being developed – but instead would set caps on carbon dioxide pollution that plant operators would have to meet. Some natural gas plants could start blending gas with another fuel source such as hydrogen, which does not emit carbon, although specific actions would be left to the industry.

The scope of the power plant rule is immense. About 60% of the electricity generated in the U.S. last year came from burning fossil fuels at the nation’s 3,400 coal and gas-fired plants, according to the U.S. Energy Information Administration.

The Labor Department said Thursday that its producer price index, which measures inflation at the wholesale level before it reaches consumers, climbed 0.2% in April from the previous month. On an annual basis, prices are up 2.3%.

Excluding the more volatile measurements of food and energy, so-called core inflation rose 0.2% for the month — up from the 0% reading in March. The figure was up 3.2% on a 12-month basis, down slightly from the previous month.

And the services index climbed 0.3%, the biggest jump since November 2022, the Labor Department said in the report. More than one-third of that increase can be traced to a 4.1% rise in prices for portfolio management, which measures the prices for investment advice. Gasoline prices, meanwhile, surged 8.4%.

“The inflation pipeline is clearing as supply chains for the most part have returned to normal and commodity prices have eased significantly in response to slowing global conditions,” said Jeffrey Roach, chief economist at LPL Financial. “Investors should expect to see further easing in prices throughout the balance of 2023.”

The consumer price index rose at a quicker monthly pace in April, pushed up by soaring costs for used cars and trucks — the latest sign of lingering inflation pressures across the economy.

Why it matters: The CPI rose 0.4% in April, faster than the 0.1% rise the previous month. The measure that excludes energy and food prices continued to rise at a fairly quick pace.

By the numbers: On a yearly basis, inflation continued to move down.

• In the 12 months through April, CPI increased 4.9% — ticking down from 5% in March, the government said on Wednesday.
• Core CPI, which excludes energy and food prices that can be volatile month-to-month, rose 0.4% in April, matching the prior month’s pace.
• In the year ending in April, core CPI increased 5.5%, compared to 5.6% in March.

Details: The monthly increase in the report reflects a jump in used cars and trucks prices, which had been apparent in private-sector data months earlier — but slow to feed through to official government data.

• Used vehicles rose 4.4% in April, after several months of consecutive price declines, according to the CPI report. Economists see the price spike as temporary.

In a relief for consumers who have been plagued by sharp increases in food costs, prices for groceries declined outright for the second straight month — dropping by 0.2%. That follows a 0.3% drop in March.

• Yes, but: Grocery prices are still up 7.1% in the 12 months through April.
• Costs for food away from home, including at restaurants, rose 0.4%, slightly slower than the 0.6% pace the prior month.

Recently, the Office of the United States Trade Representative (USTR) released its 2023 Special 301 Report on the adequacy and effectiveness of U.S. trading partners’ protection and enforcement of intellectual property (IP) rights.

The “Special 301” Report is an annual review of the global state of IP protection and enforcement. USTR conducts this review pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act.

USTR reviewed more than 100 trading partners for this year’s Special 301 Report, and placed 29 of them on the Priority Watch List or Watch List.

In this year’s Report, trading partners on the Priority Watch List present the most significant concerns this year regarding insufficient IP protection or enforcement or actions that otherwise limited market access for persons relying on intellectual property protection. Seven countries are on the Priority Watch List: Argentina, Chile, China, India, Indonesia, Russia, and Venezuela.

These countries will be the subject of particularly intense bilateral engagement during the coming year.

Twenty-two trading partners are on the Watch List, and merit bilateral attention to address underlying IP problems: Algeria, Barbados, Belarus, Bolivia, Brazil, Bulgaria, Canada, Colombia, Dominican Republic, Ecuador, Egypt, Guatemala, Mexico, Pakistan, Paraguay, Peru, Thailand, Trinidad & Tobago, Turkey, Turkmenistan, Uzbekistan, and Vietnam.

In addition, Out-of-Cycle Reviews provide an opportunity to address and remedy such issues through heightened engagement and cooperation with trading partners and other stakeholders. USTR announced an Out-of-Cycle Review of Bulgaria.

Gov. Tony Evers has officially appointed three members to the board that regulates Wisconsin’s natural resources.

Evers reappointed Paul Buhr to the Wisconsin Natural Resources Board, as his term expired at the beginning of the month. He also appointed Dylan Bizhikiins Jennings and Jim Vandenbrook to fill two vacancies that came with the expiration of two members’ terms.

Buhr was appointed to the position in January to replace William Bruins, who resigned at the end of 2022. Buhr is from Viroqua, near where he owned and operated Rabur Holsteins for 45 years before serving on the Wisconsin Technical College System Board and now Natural Resources Board.

Jennings is a citizen of the Bad River Band of Lake Superior Chippewa. He is currently a doctoral fellow at UW-Madison with the HEAL Earth Partnership. Jennings also oversees the Sigurd Olson Environmental Institute at Northland College and the Hulings Rice Food Center.

VandenBrook was county conservationist in Vernon and Trempeleau counties before he began working at the Wisconsin Department of Agriculture, Trade and Consumer Protection for over 25 years. He most recently served as the executive director of the Wisconsin Land and Water Conservation Association.

The rate at which Wisconsin’s “prime working age” adults are either working or looking for work is among the best in the country, according to a recent report from the University of Wisconsin-Extension.

Economists describe prime working age as individuals between 25 and 54 years old because that demographic typically has the highest labor force participation rates. Those rates measure the share of the population that’s working or seeking jobs.

In 2021, Wisconsin had the fifth-highest labor force participation rate in the country for prime working age women and the ninth highest for prime working age men, the UW-Extension report said.

“It speaks a lot to our work ethic,” said Matt Kures, the report’s author and a community economic development specialist for UW-Extension. “Traditionally, we have had high participation rates and I think that’s just kind of ingrained in us.”

He said overall annualized labor force participation data for 2022 is still preliminary. But the share of the state’s population that’s considered prime working age has been declining since around 2000 as both the 55- to 64-year-old and 65-plus demographics have been increasing, according to research from Kures.

For example, people 55 and older made up 21.6 percent of the state’s population in 2000. By 2021, they made up 32 percent. During the same period, prime working age Wisconsinites went from representing 43.1 percent of the population to 37.1 percent, while the state’s overall labor force participation rate has been trending downward.

“One of the biggest factors pushing our overall participation rate down is just our aging demographics,” Kures said. “That explains a very large share of the overall decline in our participation rates.”

A group of Republican state lawmakers is introducing a plan that they say would force Wisconsin hospitals to be more transparent about how much they’re charging for procedures.

The plan introduced by state Sen. Mary Felzkowski, R-Irma, and other GOP lawmakers would require hospitals to keep a list on their website of 300 “shoppable services,” or nonemergency procedures they provide. The plan would ban hospitals from charging for the information or requiring people to set up user accounts to read it.

The state’s Department of Health Services would be in charge of enforcing the requirement. If hospitals don’t comply, DHS could fine smaller facilities up to $600 per day. Larger hospitals, those with more than 550 beds, could get hit with daily fines of $10,000.

“Health care is the only thing Wisconsinites purchase that we don’t know the price of beforehand,” Felzkowski said Wednesday at a state Capitol news conference introducing the plan. “And that has to change.”

Felzkowski argued the new state requirement is necessary because the federal government isn’t enforcing compliance with its health transparency requirement.

“It’s time that the state stepped up and started looking out for our constituents around the cost of health care,” Felzkowski said. “And that’s what this bill does.”

Felzkowski said the proposal could be used by employers to comparison shop insurance plans for their workers. She said it could also be used by people to compare prices for procedures, like a mammogram.

With a single vote Tuesday, Republicans lawmakers dramatically reshaped Governor Tony Evers’ proposed budget.

GOP members of the Legislature’s budget committee voted to remove 545 proposals from the governor’s proposed two-year spending plan, ranging from a new paid family leave program to a deal to fund upgrades to the Milwaukee Brewers stadium. Other Evers budget initiatives rejected by Republicans Tuesday include an expansion of Medicaid, the legalization of marijuana and an enrollment freeze in the state’s voucher school program.

This is Evers’ third proposed budget since becoming governor in 2019, and the third time Republicans have started deliberations by rejecting a long list of the governor’s initiatives.

Joe Heim, a professor emeritus of political science, said the process isn’t surprising to budget observers at this point. “When you’ve got a Democratic governor and a Republican Legislature, you expect certain things,” Heim said. “There are things in (Evers’) budget that I think he put in to satisfy certain constituencies. You know, he just had an election. So he had certain promises that he would make knowing fully well that this stuff is going to disappear.”

Also on Tuesday, Republicans voted to build the budget from “base,” meaning they will add spending to the budget Republicans passed and Evers signed two years ago rather than the one he proposed to the Legislature in February. A handful of Democrats also supported that budget in both houses of the Legislature.

“The bottom line is we are building off base a budget that was bipartisan for the first time since 2007,” said Rep. Tony Kurtz, R-Wonewoc.

While Republicans have spent the past several months criticizing Evers’ budget, Tuesday marked the first time they took votes on pieces of the budget themselves. Deals on bigger issues — like school funding — could come together later this month.

“If the past is prologue, they will eventually come to somewhat of an agreement, at least the more contentious issues,” Heim said. “Most observers that I’ve talked to seem to think that this is actually going to get done by the end of June.”