News of the Day

Census: Household Incomes Up, Poverty Down in 2017

Median household incomes grew and the national poverty rate fell for the third consecutive year in 2017, according to new Census Bureau estimates.

Wisconsin’s median household income rose more than $1,000 to $59,305 in 2017. Twenty one states had higher median incomes, including Minnesota ($68,388) and Illinois ($62,992), according to estimates released Thursday. The national median household income was $61,372.

Wisconsin’s poverty rate was 11.3 percent, statistically unchanged from the previous year and below the national rate of 12.3 percent. The poverty rate among Wisconsin families was 7.1 percent, down from 7.7 percent last year and 9.2 percent in 2013.

Nationwide household income grew by 1.8 percent after adjusting for inflation, but not everyone enjoyed the same gains. Those in the top 5 percent saw income grow by 3 percent, nearly double the rate of those in the middle.

There was also a 1.1 percent decline in median earnings for full-time workers, which is likely the result of more people joining the workforce and starting at the bottom of the pay scale, said Trudi Renwick, the Census Bureau’s assistant division chief of economic characteristics.

How do Wisconsin Municipalities Collect Taxes from Airbnb and Other Home Rental Companies?

Unlike the popular home-renting service Airbnb, which returned hundreds of thousands of dollars to Madison and the state of Wisconsin in the first year of a tax collection agreement, similar companies leave tax payment up to individual property owners.

Under voluntary agreements with Madison, Airbnb returned $324,000 in room tax revenue in the first year of payments. The company returned $2.5 million to the state of Wisconsin over the first year of its agreement.

However, other major players in the home rental business, like Homeaway and VRBO (both owned by Expedia), do not charge the required local taxes up front. Hosts who use these platforms are responsible for collecting and returning local taxes to the municipality.

Under Wisconsin law, people renting out rooms to the public for periods of less than one month are responsible for collecting and paying short-term lodging sales tax. The state only requires companies that have a nexus, or a connection between a seller and the state, to collect tax on sales made in Wisconsin.

Activities that create a nexus in Wisconsin include:

  • A physical presence or employees on the property.
  • The delivery of products into Wisconsin in company-owned vehicles.
  • Selling, servicing, repairing or installing products.
  • Performing construction activities or other services.

 

Dairy Industry, Rural banks ask Wisconsin Supreme Court to Review Stray Voltage Case

Wisconsin’s dairy industry and a group of rural banks are asking the state Supreme Court to uphold a jury’s decision to award more than $13 million to a Trempealeau County farmer in what would be the state’s largest stray voltage settlement.

In August 2017, a jury found that Northern States Power Co., or NSP, a subsidiary of Xcel Energy, was negligent and failed to follow state regulations, causing more than $4 million in losses for Paul Halderson and his wife, Lyn, who operate a nearly 1,000-cow dairy farm near Galesville.

The Haldersons claimed their herd suffered from illness and decreased milk production for more than a decade because of improperly grounded power lines.

The jury awarded the Haldersons about $4.5 million, finding deliberate violation of statute, which would entitle the Haldersons to triple damages. But Judge Scott Horne later overruled the “wanton and willful” finding on the grounds that Xcel conducted multiple tests on the Halderson farm but failed to find unacceptable levels of stray voltage.

A higher court denied the Haldersons’ appeal, upholding Horne’s decision, saying “the evidence at trial was insufficient for a reasonable jury to find, by clear and convincing evidence, that NSP’s conduct was willful, wanton, or reckless.” The appeals court also denied Xcel’s request for a new trial.

The Haldersons are now asking the Supreme Court to review the case, which they say hinges on an issue “of compelling statewide importance.”

Stray voltage refers to current that leaks from neutral wires into the earth. Animals that come into contact with a grounded object — such as a watering trough — can receive small shocks. This can cause dairy cattle to avoid eating, become stressed and generally produce less milk, according to research from the U.S. Department of Agriculture.

Governor Walker Says Flood Damage Tops $200 Million

Gov. Scott Walker says severe flooding has caused more than $200 million in damage.

The governor tweeted Thursday morning that estimates put the damage at $208.7 million overall, including $98.2 million in damage to homes, $40.8 million in damage to businesses and $69.6 million to public infrastructure.

Wisconsin Emergency Management spokeswoman Lori Getter says that number is expected to rise. State and local officials are still responding to rising waters and haven’t gotten full damage estimates yet.

She says Federal Emergency Management Agency survey teams are planning to spend at least a week in Wisconsin assessing damage. She says that data will be used to make a request for federal disaster assistance.

Groups Make Pitch For and Against ‘Dark Stores’

For nearly 90 minutes on Tuesday, the auditorium in the county’s Ives Grove Office Complex turned into a metaphorical courtroom as members of the Racine County Government Services Committee heard arguments on both sides of the “dark store” loophole issue.

The dark store loophole, broadly defined, allows businesses that appeal their property tax assessment to a lower amount to occasionally use empty stores or vacant land as evidence for the lower amount.

Jerry Deschane, League of Wisconsin Municipalities executive director, spoke in favor of legislation that would close the dark store loophole.

“This is driving a shift in property taxes from large properties onto homeowners and small independent businesses,” Deschane said. “If this is not corrected — and it needs to be corrected by legislation — the problem will continue to grow. It will accelerate to the point where we estimate that it will drive an 8 percent increase in the average homeowner’s property tax bill.”

Deschane points to the Wisconsin Supreme Court ruling on Walgreens v. City of Madison as a major contributor to the dark store issue.

Deschane said the state Supreme Court essentially ruled that municipalities cannot use the actual lease income of a property as part of its assessment. Instead, they must use a “market rate lease” which, he argues, is “always considerably lower and is not a fair representation of the income potential of that property, which is really what an assessment is supposed to do.”

Cory Fish, director of tax, transportation and legal affairs for Wisconsin Manufacturers and Commerce, spoke to oppose any legislation whatsoever on the issue.

Fish said the characterizations of the legislation proposed to solve the problem have been “disingenuous.”

“The (tax) shift has been towards business — and you can certainly cherry-pick municipalities where that’s not been the case, and I’m not going to deny that — but statewide when looking at the total tax revenue, the shift has been towards business,” Fish said. “This legislation affects everyone statewide, so I really don’t think we should make legislation by cherry-picking a few municipalities.”

Fish said it is “absurd” to think a law that has been on the books for decades would suddenly be taken advantage of by businesses in the mid-2000s.

“However, something did change in the mid-2000s, but it was the behavior of tax assessors and not businesses,” Fish contended. “The vast majority of tax assessors in this state are not increasing tax assessments, in our view, illegally, in order to gin up litigation to cause a problem. But there are a few activist tax assessors who are actually part of a group, who want to include the business value while taxing property.”

Rancorous, Partisan Start for Kavanaugh High Court Hearing

The week of hearings on Kavanaugh’s nomination began with a sense of inevitability that the 53-year-old appellate judge eventually will be confirmed, perhaps in time for the first day of the new term, Oct. 1, and little more than a month before congressional elections.

However, the first of at least four days of hearings by the Senate Judiciary Committee began with partisan quarreling over the nomination and persistent protests from members of the audience, followed by their arrests.

In Kavanaugh’s own statement at the end of more than seven hours of arguing, the federal appeals judge spoke repeatedly about the importance of an independent judiciary and the need to keep the court above partisan politics, common refrains among Supreme Court nominees that had added salience in the fraught political atmosphere of the moment.

“A judge must be independent and must interpret the law, not make the law. A judge must interpret statutes as written. A judge must interpret the Constitution as written, informed by history and tradition and precedent,” he said.

Kavanaugh also promised to be “a team player on the Team of Nine.”

The Supreme Court is often thought of as nine separate judges, rather than a team. And on the most contentious cases, the court tends to split into conservative and liberal sides. But justices often do say they seek consensus, and they like to focus on how frequently they reach unanimous decisions.

 

Public Comment Period Open on Suggestions for UI Changes

The Department of Workforce Development is encouraging the public to submit comments  about the state’s Unemployment Insurance program to the Unemployment Insurance Advisory Council.

The Council is taking public comments on suggested changes to the state’s UI laws through November 16, 2018. The comments will help form the Council’s legislative agenda during the following year.

Comments may be submitted by email to UILawChange@dwd.wisconsin.gov or by mail to:

Unemployment Insurance Advisory Council
Attn: Janell Knutson, Chair
P.O Box 8942
Madison, WI 53708

The Council comprises employer and employee representatives who meet monthly to recommend law changes and analyze legislative proposals that affect the state’s UI program.

For more information on the Unemployment Insurance Advisory Council visit: https://dwd.wisconsin.gov/uibola/uiac/.

AAA Sees U.S. Average Gasoline Price Dipping to Around $2.70

Steady oil prices and the end of strong summer demand should start pushing gasoline prices down.

The auto club AAA predicts that the national average will drop 14 cents to $2.70 a gallon this fall.

The current average of $2.84 is up 46 cents from a year ago, but down from the peak national average of $2.96 a gallon in May. AAA says motorists in the West and in Pennsylvania and Connecticut pay even more – over $3.

Relief could be coming. Benchmark U.S. crude is around $69 a barrel – that’s up sharply from a year ago but down $5 a barrel since early July.

Also, refineries are expected to switch in mid-September to winter-blend gasolines, which are cheaper to produce than summer blends.

Governor Declares Statewide State of Emergency

Recovery efforts continue in communities across Wisconsin, following recent storms that have caused widespread flooding in many parts of the state and generated at least two tornadoes on Tuesday evening. The tornadoes, which touched down in southwest Fond du Lac County near Brandon and north of Kiel near the Calumet and Manitowoc County lines, downed trees and power lines, while also damaging multiple buildings. No injuries were reported.

Governor Scott Walker on Wednesday declared a State of Emergency for all of Wisconsin, which directs state agencies to assist local governments in their response to the flooding and allows the Wisconsin National Guard to be called to active duty by the adjutant general if requested.

Several parts of the state have experienced torrential rainfalls in the past two weeks with some areas receiving more than 14 inches of rain. This has caused lake levels to rise in Dane County and pushed portions of the Kickapoo and Baraboo rivers to record levels. An additional half inch of rain could fall on parts of the state late Thursday night.

Private property owners should report flood and storm damage by calling 2-1-1 or 877-947-2211. Make sure to document damage by taking pictures and speak with your insurance agent.

Several roads throughout the state remain closed due to standing water or because of damage caused by flooding. Drivers are urged to check 511wi.gov for current road closure information.

Canada Rejoins NAFTA Talks

Canada’s top trade negotiator praised Mexico’s trade concessions on autos and labor rights on Tuesday as she rejoined NAFTA talks, while U.S. lawmakers warned that a bilateral U.S.-Mexico trade deal would struggle to win approval in Congress.

Canadian Foreign Minister Chrystia Freeland said that Mexico’s “difficult” concessions to the United States on Monday would pave the way for productive talks this week as all three countries race toward a Friday deadline for a deal to modernize the 24-year-old North American Free Trade Agreement.

“These concessions are really going to be important for workers in Canada and the United States,” she told reporters after meeting with U.S. Trade Representative Robert Lighthizer.

Freeland, who later met with Mexican officials on Tuesday evening, said she is due to dig into detailed discussions with Lighthizer on Wednesday.

After being sidelined from the talks for more than two months, Freeland will be under pressure to accept terms the United States and Mexico worked out on a trade deal announced on Monday.

One of the main sticking points for Canada in the revised deal is the U.S. effort to dump the Chapter 19 dispute resolution mechanism that hinders the United States from pursuing anti-dumping and anti-subsidy cases. Lighthizer said on Monday that Mexico had agreed to eliminate the mechanism.

Other hurdles include intellectual property rights, such as the U.S.-Mexico 10-year data exclusivity for biologic drug makers and extensions of copyright protections to 75 years from 50, all higher thresholds than Canada has previously supported.

If a deal is not reached with Canada, U.S. Treasury Secretary Steven Mnuchin has said the Trump administration intends to proceed with a separate trade agreement with Mexico.

The Mexican government has also taken that position, even as it says it wants a trilateral deal. Mexican President Enrique Pena Nieto is keen to sign the agreement before leaving office at the end of November.

A trilateral deal would need only 51 votes in the Senate, while a bilateral pact would need a far more difficult 60-vote threshold, Republican Senator Pat Toomey said.