News of the Day

Wisconsin could be at risk of losing $217 million in budget authority for transportation next year under a provision passed in a 2015 federal highway funding bill.

According to data released by the Federal Highway Administration in early November, Wisconsin is faced with the loss of $217 million in contract authority under a rescission that’s scheduled to take effect on July 1. Section 1438 of the 2015 Fixing America’s Surface Transportation (FAST) Act included a mandated rescission of $7.6 billion for all states.

A Wisconsin Department of Transportation spokeswoman said the agency is still trying to determine the effect the rescission will have on next year’s transportation budget. The provision will affect contract authority, not actual “spendable funding,” the spokeswoman noted.

“The department is working with (the Federal Highway Administration) to determine the impacts, which we believe will be less than reported,” according to WisDOT. “We also have been in working with our congressional delegation in an effort to repeal this legislation.”

Debby Jackson, executive director of the Wisconsin Transportation Development Association, said the state’s risk of losing contract authority comes after a years-long fight over transportation spending in Wisconsin and could cause significant troubles if it takes effect.

“A lot of people worked hard during the last state budget to get more money into the transportation fund to slow the decline of our transportation infrastructure,” she said. “If this rescission of federal contract authority were to happen, it would be a step in the wrong direction.”

The New York Times accused FedEx on Sunday of essentially having lobbied President Donald Trump to sign tax cuts into law with the promise of  businesses using the saved money to reinvest in and further grow their  companies, and then failing to invest the billions of dollars that it reportedly saved as a result of the tax cuts.

“In the 2017 fiscal year, FedEx owed more than $1.5 billion in taxes. The next year, it owed nothing. What changed was the Trump administration’s tax cut – for which the company had lobbied hard,” The New York Times reported on Sunday. “

Late on Sunday, FedEx CEO Frederick Smith responded to The New York Times’ story by calling it factually incorrect, claiming that The New York Times is the company that does not pay federal income taxes, and challenging the publisher of The New York Times to a debate on tax policy.

“The New York Times published a distorted and factually incorrect story on the front page of the Sunday, November 17 edition concerning FedEx and our billions of dollars of tax payments and billions of dollars of investments in the U.S. economy,” Smith wrote.

“Pertinent to this outrageous distortion of the truth is the fact that unlike FedEx, the New York Times paid zero federal income tax in 2017 on earnings of $111 million, and only $30 million in 2018 – 18% of their pretax book income.  Also in 2018 the New York Times cut their capital investments nearly in half to $57 million, which equates to a rounding error when compared to the $6 billion of capital that FedEx invested in the U.S. economy during that same year.”

Wisconsinites are spending less of their money on taxes overall, but more of their tax bill are property taxes imposed by local municipalities and schools.

According to a new report by the Wisconsin Policy Forum, “property tax levies by municipalities, schools, counties, and other local governments represent the single largest tax in the state” at 3.5 percent of personal income in 2017.

“Property taxes in Wisconsin are seen as too high because that’s the only option local governments have,” said Jerry Deschane, the executive director of the League of Wisconsin Municipalities. “This isn’t a spending issue, this is a how we raise revenue issue.”

The non-profit organization represents 593 of the 602 municipalities across the state, including Milwakuee and Madison. Among other things, it provides resources and lobbying efforts for its members.

Deschane said that are those property taxes remain high, they become a strain on people who don’t have the discretionary funding to re-allocate to their increased property tax bill.

“With a property tax, you can’t defer the third bedroom in your house, you have to pay the whole property tax bill,” he said. “Property taxes are very inflexible compared to people’s economic circumstances.”

Trade talks between the U.S. and China have hit a snag over farm purchases, as officials seek to lock down the limited trade deal President Trump outlined last month.

Trump has said that China has agreed to buy up to $50 billion of soybeans, pork and other agricultural products from the U.S. annually. But China is leery of putting a numerical commitment in the text of an agreement, according to people familiar with the matter.

Beijing wants to avoid cutting a deal that looks more favorable to the U.S. than to China, some of the people said, and also wants to have flexibility within the agreement should trade tensions escalate again. “We can always stop the purchases if things get worse again,” said one Chinese official.

The dispute over farm purchases is one of several issues that have delayed completion of the limited trade accord announced by Trump and Chinese Vice Premier Liu He on Oct. 11. Both sides are also at odds over whether — and by how much — the U.S. would agree to lift tariffs on Chinese imports, Beijing’s core demand that is linked to its offers on other issues.

Chinese officials also have resisted U.S. demands for a strong enforcement mechanism for the deal and curbs on the forced transfer of technology for companies seeking to do business in China — all of top importance to the international business community — according to people familiar with the talks.

The University of Wisconsin System and Wisconsin Economic Development Corp. (WEDC) have  unveiled a new online tool to help small and medium-sized businesses recruit interns from UW campuses. The goal is to improve the student experience and keep skilled workers from leaving the state.

The “Talent Generator” is an online portal for businesses interested in starting internships for the first time. It offers business leaders tips and best practices for recruiting potential interns. It also offers links to career services staff at nearby UW System campuses.

During a press conference Tuesday in Eau Claire, UW System President Ray Cross said while UW schools already have strong internship opportunities, not all businesses are familiar with the process or have the means to find candidates.

“What we discovered was that businesses said to us, particularly small and medium businesses, we really don’t have an HR department,” said Cross. “And those are some excellent internship opportunities in startups or small businesses.”

Cross said about half of the students who receive internships at UW are offered full time jobs by the companies that recruit them. He said it’s one way to ensure that students graduating at UW institutions build lasting connections to Wisconsin.

Wisconsin Civil Justice Council (WCJC) today released its 2019 Guide to the Wisconsin Supreme Court and Judicial Evaluation, which reviews the most important cases decided by the Supreme Court of Wisconsin affecting the business community. The 2019 Judicial Evaluation covers the 2018-19 Supreme Court term.

The Judicial Evaluation scores the justices based on the percentage of the reviewed cases in which their position aligned with the WCJC position. Based on the comprehensive review of decisions affecting the business community, Chief Justice Patience Roggensack and Justice Annette Ziegler scored the highest at 80 percent. Justice Rebecca Bradley scored 79 percent, and Justice Daniel Kelly came in at 76 percent. New to the court this term, Justice Rebecca
Dallet scored 59 percent. Justice Walsh Bradley scored 30 percent. In her last term before retiring from the court this year, Justice Shirley Abrahamson scored 28 percent.

The 2019 Judicial Evaluation provides a discussion of the facts and the court’s holding in each of the decisions, including the dissenting opinion(s). The guide then lists how each justice decided the case, along with the WCJC position on the court’s decision.

This is the fourth judicial evaluation issued by WCJC since 2011. For more information about WCJC, please visit http://www.wisciviljusticecouncil.org/.

Wisconsin economy grew at an annualized rate of 1.1% in the second quarter, among the 10 slowest growth rates of any state in the country, according to new date from the U.S. Bureau of Economic Analysis. The growth rate is unchanged from the first quarter.

Only one Midwestern state, Indiana, had a slower growth rate in the quarter at 1%. Three other states, Illinois, Iowa and Michigan, had growth rates of 1.1%. Nebraska, Kansas, Minnesota and Missouri all topped 2%, led by Nebraska at 2.4%.

Manufacturing, the state’s largest sector by GDP, saw a slowdown from 2.1% to a 0.4% growth rate. The slowdown was primarily driven by durable goods manufacturing, which dipped from 5.9% to 0.6% and contributed 0.07 percentage points to overall growth.

The major contributors to growth included agriculture, accounting for 0.32 percentage points, utilities, a 0.27 point boost, and management of companies, a 0.26 contributor.

The state Senate has approved a bill to end by next summer the sales tax that funded construction of Miller Park. The 0.1 percent sales tax has been in effect in Milwaukee, Ozaukee, Washington, Waukesha and Racine counties since 1996.

Under current law, the tax would end when the stadium district has paid off its bonds and satisfied reserve requirements. The district is expected to reach that point by early 2020. The bill would require the tax end by August 31, 2020.

Any excess collections would go back to the counties for property tax relief, public safety, parks and recreation or economic development.

The Senate passed the bill 33-0 Tuesday. The Assembly passed it in June. It goes to Gov. Tony Evers next to sign.