Brian Dake

Wisconsin’s Supreme Court heard arguments Thursday in another case that could reframe the power of state government to respond to the COVID-19 pandemic, reviving a debate that began when justices struck down the state’s “Safer at Home” order in May.

The latest dispute stems from an order restricting bar and restaurant capacity that expired more than a month ago, but it raises issues the court left ambiguous in its “Safer at Home” ruling.

Gov. Tony Evers’ administration issued the order on Oct. 6 through powers invoked by state Department of Health Services Secretary Andrea Palm to respond to public health emergencies.

Palm’s order restricted the size of crowds at indoor businesses like restaurants and bars. Under the order, those businesses were limited to 25 percent of their usual capacity. For example, a restaurant that could normally hold up to 200 people would be limited to a crowd of 50.

The Evers administration argues there’s a key difference in this case.

When the court struck down “Safer at Home,” it carved out an exception, stating without explanation in two footnotes in the majority opinion that it was not striking down the state’s powers to close schools.

The law that spells out the power to close schools states that DHS “may close schools and forbid public gatherings in schools, churches, and other places to control outbreaks and epidemics.” The Evers administration argues that Palm’s latest order did just that.

Critics of Palm’s order argue it should be struck down because it relies on part of the same law that the Supreme Court addressed when it struck down “Safer at Home.”

“We have the same agency here. We have the same pandemic. They are repackaging these same exact arguments they made the last time,” said attorney Misha Tseytlin arguing on behalf of the Mix Up, Inc., an Amery bar and grill challenging Palm’s order. “I understand the composition of this court has changed since, but the law hasn’t changed.”

The Federal Reserve kept its benchmark interest rate at a record low near zero Thursday and signaled its readiness to do more if needed to support an economy under threat from a worsening coronavirus pandemic.

The central bank’s policy statement Thursday was approved on a 10-0 vote. Robert Kaplan, president of the Federal Reserve Bank of Dallas, who had dissented at the previous meeting, voted with the majority this time. Another dissenter in September, Neel Kashkari, head of the Minneapolis Fed, was absent, with his alternate, Mary Daly of the San Francisco Fed, approving the statement.

The statement was nearly identical to the one the Fed issued in September. At that meeting, it adopted a policy goal change it had made in August to keep rates low for some period of time even after inflation hits its 2% annual target. The reason was to allow the Fed to supply a longer boost to the economy and for unemployment to fall further before the policymakers begin to worry about inflation.

Congressional leaders said Tuesday night they are making progress on a sweeping deal to fund the government and provide coronavirus relief but hadn’t yet clinched an agreement.

The top four congressional leaders met twice Tuesday as they race the clock to try to fund the government by Friday and break a months-long stalemate to provide more coronavirus aid.

The bipartisan package was split into two different bills. One $748 billion piece includes another round of Paycheck Protection Program (PPP) assistance for small businesses, an unemployment benefit and more money for schools, vaccine distribution and other widely agreed upon items.

The second, $160 billion piece ties together the two most controversial elements of the coronavirus negotiations: more money for state and local governments and protections from coronavirus-related lawsuits.

Presidential electors are meeting across the United States on Monday to formally choose Joe Biden as the nation’s next president.

Monday is the day set by law for the meeting of the Electoral College. In reality, electors meet in all 50 states and the District of Columbia to cast their ballots. In 32 states and the District of Columbia, laws require electors to vote for the popular-vote winner. The Supreme Court unanimously upheld this arrangement in July.

The voting is decidedly low tech, by paper ballot. Electors cast one vote each for president and vice president.

The Electoral College was the product of compromise during the drafting of the Constitution between those who favored electing the president by popular vote and those who opposed giving the people the power to choose their leader.

Each state gets a number of electors equal to their total number of seats in Congress: two senators plus however many members the state has in the House of Representatives. Washington, D.C., has three votes, under a constitutional amendment that was ratified in 1961. With the exception of Maine and Nebraska, states award all their Electoral College votes to the winner of the popular vote in their state.

A U.S. government advisory panel endorsed widespread use of Pfizer’s coronavirus vaccine Thursday, putting the country just one step away from launching an epic vaccination campaign against the outbreak that has killed close to 300,000 Americans.

Shots could begin within days, depending on how quickly the Food and Drug Administration signs off, as expected, on the expert committee’s recommendation.

“This is a light at the end of the long tunnel of this pandemic,” declared Dr. Sally Goza, president of the American Academy of Pediatrics.

In a 17-4 vote with one abstention, the government advisers concluded that the vaccine from Pfizer and its German partner BioNTech appears safe and effective for emergency use in adults and teenagers 16 and over.

Pfizer has said it will have about 25 million doses of the two-shot vaccine for the U.S. by the end of December. But the initial supplies will be reserved primarily for health care workers and nursing home residents, with other vulnerable groups next in line until ramped-up production enables shots to become widely available on demand — something that will probably not happen until the spring.

Next week, the FDA will review a second vaccine, from Moderna and the National Institutes of Health, that appears about as protective as Pfizer-BioNTech’s shot. A third candidate, from Johnson & Johnson, which would require just one dose, is working its way through the pipeline. Behind that is a candidate from AstraZeneca and Oxford University.

Some state requirements for unemployment benefits in Wisconsin that were put on hold during the early days of the COVID-19 pandemic will go back into effect in February, according to GOP leaders in the state Legislature.

During a Wednesday meeting with the state’s largest business group, Assembly Speaker Robin Vos, R-Rochester, and incoming Senate Majority Leader Devin LeMahieu, R-Oostburg, said temporary waivers of Wisconsin’s one-week waiting period and work search requirements for unemployment benefits will be allowed to expire early next year.

Lawmakers approved waiving the one-week waiting period until Feb. 7 in their wide-ranging COVID-19 response legislation earlier this year.

The work search waiver was first instituted through an emergency order from Gov. Tony Evers in March. When that order expired, his administration worked with lawmakers to approve an emergency rule to extend it. Those extensions were approved by the GOP-controlled rulemaking committee in September and November, with the latest extension set to expire on Feb. 2.

During the virtual meeting with Wisconsin Manufacturers and Commerce members on Wednesday afternoon, Vos argued the waivers shouldn’t be extended again because “Wisconsin’s unemployment has come down to a much more manageable number.”

“That one-week waiting period should probably remain and not be allowed to lapse again, so people are out looking for work as quick as they can,” Vos said.

Vos said the work search requirement was waived with the idea that the pandemic and its effect on jobs wouldn’t last as long as it has.

“Here we are, nine months later, and we still have folks who are not doing a work search even though their position has been permanently eliminated,” he said. “That’s probably not the right move.”

LeMahieu agreed: “There’s no way we can extend those (waivers) with the way unemployment is trending in the state of Wisconsin,” he said.

Gov. Tony Evers proposed extending both unemployment-related waivers until January 2022 in his COVID-19 response proposal unveiled last month. The governor’s office didn’t immediately respond to a request for comment Wednesday.

Small business owners across Wisconsin and the country may be forced to pay higher taxes after receiving money from the federal Paycheck Protection Program (PPP), adding to their costs at a time when many have seen their revenue crushed by the COVID-19 pandemic.

But in mid-November, the U.S. Treasury Department and the IRS said if a business paid for expenses with money from a PPP loan that has been or will be forgiven, businesses cannot deduct those expenses from their taxes — deductions that would otherwise be routine in past years.

Without being able to deduct those expenses, many small businesses will be faced with a higher tax bill, a reality Republicans and Democrats in Congress say is not what lawmakers intended when they created the program.

In a joint statement on November 19, U.S. Sens. Chuck Grassley, R-Iowa, chair of the Senate Finance Committee, and Ron Wyden, D-Oregon, ranking member of the committee, urged the Treasury Department to reconsider the ruling, saying the department along with the IRS was ignoring the intent of Congress.

“Since the CARES Act, we’ve stressed that our intent was for small businesses receiving Paycheck Protection Program loans to receive the benefit of their deductions for ordinary and necessary business expenses,” Grassley and Wyden wrote. “Regrettably, Treasury has now doubled down on its position in new guidance that increases the tax burden on small businesses by accelerating their tax liability, all at a time when many businesses continue to struggle and some are again beginning to close. Small businesses need help maintaining their cash flow, not more strains on it.”

On December 3, hundreds of national trade groups like the Associated General Contractors of America and the National Beer Wholesalers Association sent a letter to leadership in Congress urging them to pass legislation before the end of the year to correct what they called “an avoidable catastrophe for millions of small businesses.”

“The effect of this (IRS) ruling is to transform tax-free loan forgiveness into taxable income, raising the specter of a surprise tax increase of up to 37 percent on small businesses when they file their taxes for 2020,” the letter said.

When Gov. Tony Evers unveils his proposed 2021-23 budget early next year, he will do so amid elevated unemployment, slowing state tax collections, and the spending pressures created by an ongoing pandemic and increased demand for social services. How well will the state’s finances hold up to the strain?

To examine this question, the Wisconsin Policy Forum started with the state’s projected increases in tax collections along with its base spending levels. After including routine adjustments for debt payments and employee compensation but excluding all new spending requests by state agencies, we find general fund spending is currently projected to exceed revenues by $373.1 million in the two-year budget running from July 2021 to June 2023. To make up the difference – equal to about 1% of spending over the two years – the state would have to spend down reserves, adopt spending cuts or tax increases, delay payments for certain obligations, or draw on some other new source such as additional federal aid.

Our bare-bones tally did not factor in the projected expense of maintaining current services within Medicaid health programs – more than $1.1 billion over the next two years – or include additional spending on pandemic response, state aid to K-12 schools or local governments, prisons, or the University of Wisconsin System. New spending in at least some of these areas appears inevitable, particularly in the case of Medicaid, and will add to the challenge substantially.

In one bright spot, the state expects to finish the current 2021 fiscal year with reserves of roughly $2 billion – much more than was expected a year ago or was available in the past two recessions. However, Evers has proposed spending $541 million on pandemic response in the coming months and GOP lawmakers have proposed up to $100 million, which if approved in either case would reduce that total.

For now, these are mere projections and all forecasts should be taken with great caution in this volatile time. Further action by the federal government might improve the state’s position specifically or the economy more broadly while federal inaction and a spike in coronavirus cases could cause the economy – and state budget – to deteriorate even more.

Wisconsin Gov. Tony Evers on Thursday asked federal officials to prioritize Wisconsin for COVID-19 vaccine distribution, citing concerns about high case numbers, strained hospitals and a lack of statewide mitigation efforts.

He also sent a letter to President Donald Trump and the state’s congressional delegation Thursday saying that Wisconsin needs an additional $466 million for COVID-19 testing, contact tracing, hospitals, vaccine distribution and public messaging for just the first quarter of 2021.

Wisconsin health officials on Wednesday said they expect to begin distributing vaccines in mid-December.

“Our current understanding based on what we have been told by CDC is we will receive 49,725 the first week vaccine is distributed (December 14), but that is subject to change,” said Elizabeth Goodsitt, a spokeswoman for the state Department of Health Services. “We expect to get more shipments weekly to follow.”

The state’s COVID-19 response will cost $466 million in the first quarter of 2021, Evers said. That includes:

• $255 million for testing kits and lab diagnostics
• $58 million for testing sites
• $36 million for contact tracing
• $105 million for hospital system surge capacity including continued operation of the field hospital at State Fair Park
• $10 million for vaccine infrastructure readiness
• $2 million for public health guidance and awareness