News of the Day

The Public Service Commission of Wisconsin has issued the final version of its biennial Strategic Energy Assessment (SEA). This is the 10th Strategic Energy Assessment issued by the Public Service Commission.

Every two years the Commission is charged with assessing Wisconsin’s energy demands, how those demands will be met, and the reliability of the electrical system in the upcoming years. The report includes data and information from Wisconsin utilities, power cooperatives, municipal electric companies, and other electricity and transmission providers.

This year’s SEA details residential customer energy consumption. Due to energy efficiency standards, Wisconsin’s median income family pays a similar percentage of their income each month towards energy use, when compared to other Midwest states. Additionally, Commission staff has undertaken goals to modernize our grid, and improve reliability across the state.

The SEA also documents Wisconsin’s diverse energy portfolio. Wisconsin utilities have already met their 10% renewable portfolio standards, and many have taken it upon themselves to expand programs that cut emissions and expand renewable energy sources.

Yesterday, the Internal Revenue Service issued proposed regulations for a new provision allowing many owners of sole proprietorships, partnerships, trusts and S corporations to deduct 20 percent of their qualified business income.

The new deduction — referred to as the Section 199A deduction or the deduction for qualified business income — was created by the Tax Cuts and Jobs Act. The deduction is available for tax years beginning after Dec. 31, 2017. Eligible taxpayers can claim it for the first time on the 2018 federal income tax return they file next year.

The deduction is generally available to eligible taxpayers whose 2018 taxable incomes fall below $315,000 for joint returns and $157,500 for other taxpayers. It’s generally equal to the lesser of 20 percent of their qualified business income plus 20 percent of their qualified real estate investment trust dividends and qualified publicly traded partnership income or 20 percent of taxable income minus net capital gains.

Deductions for taxpayers above the $157,500/$315,000 taxable income thresholds may be limited. Those limitations are fully described in the proposed regulations.

Qualified business income includes domestic income from a trade or business. Employee wages, capital gain, interest and dividend income are excluded.

In addition, Notice 2018-64, also issued today, provides methods for calculating Form W-2 wages for purposes of the limitations on this deduction. More information in the form of FAQs on Section 199A can be found on IRS.gov.

Taxpayers may rely on the rules in these proposed regulations until final regulations are published in the Federal Register.

President Trump will impose 25 percent tariffs on $16 billion worth of Chinese imports starting Aug. 23, the United States Trade Representative announced Tuesday.

The tariffs will affect goods such as electronic parts, plastics, chemicals, batteries, and railway cars.

The new round of tariffs completes Trump’s threat to impose $50 billion of import taxes on Chinese goods. The first $34 billion-worth went into effect on July 6.

China has already slapped back at the U.S. with its own tariffs on American goods, specifically targeting products from politically sensitive areas. It is expected to respond in kind to the latest round of tariffs.

Trump has indicated that the tariffs are meant to bring about better trade deals. The U.S. is currently in the process of renegotiating the North American Free Trade Agreement with Canada and Mexico. In late July, Trump and European Commission President Jean-Claude Juncker said they would embark on negotiations for a new trade deal between the U.S. and the E.U., and freeze the escalating tit-for-tat tariffs.

While health care outcomes in Wisconsin place it among the best in the country, the costs associated with receiving health care in the state are among the worst, according to a recent analysis by WalletHub.

The study ranked Wisconsin 23rd overall in the U.S. for its health care, based on metrics including doctor visits costs, insurance premiums, hospital quality, physicians per capita and emergency room wait times.

Wisconsin ranked 9th in the nation for its health care outcomes, based on mortality rates among infants, children and pregnant women; life expectancy; cancer and disease rates and hospital readmission rates. The states with the best health care outcomes were Vermont at No. 1, followed by Massachusetts, Colorado, New Hampshire, Hawaii, Utah, Connecticut and Minnesota.

Meanwhile, the state ranked 47th for health care costs, which included the cost of medical and dental visits, average monthly insurance premiums, the share of high out-of-pocket medical spending and share of adults who don’t visit the doctor due to cost.

Wisconsin ranked 13th for its health care accessibility, which took into account the quality of public hospital systems, hospital beds per capita, average emergency room wait times, physicians per capita, and the acceptance rates of Medicaid and Medicare among physicians.

According to the study, the states with the best health care systems based on cost, outcomes and accessibility were: Vermont at No. 1, followed by Massachusetts, New Hampshire, Minnesota, Hawaii, Rhode Island, Colorado, District of Columbia, Iowa and Maryland.

Area Development, a leading national publication covering site selection and facility planning, has recognized the State of Wisconsin for excellence in economic development with its 2018 “Gold Shovel Award.”

Wisconsin is one of just five states to receive the prestigious award for having achieved significant success in terms of job creation and economic impact for projects undertaken in 2017. The award comes as 2017 was a record year for economic development in the state, with 59 companies from Wisconsin and around the world agreeing to locate or expand Wisconsin. Those projects are expected to create or retain nearly 30,000 jobs and result in more than $11.6 billion in capital investment statewide.

Area Development’s Shovel Awards recognize the state economic development agencies – including the Wisconsin Economic Development Corporation – that drive economic development through innovative policies, infrastructure improvements, processes and promotions. In the competition, states are judged based on the number of high-value added jobs per capita, amount of investment, number of new facilities and industry diversity.

Golden Shovel awards were given to states in five categories based on their populations. Wisconsin was the winner among states with a population between 5 million and 8 million. Other Gold Shovel winners include Texas (12 million or more); North Carolina (8 million to 12 million); Kentucky (3 million to 5 million); and Nevada (less than 3 million).

The U.S. economy added 157,000 jobs in July, below expectations, as the job market cooled but remained strong amid a tightening labor market. The unemployment rate fell to 3.9 from 4 percent in June, the Labor Department reported on Friday.

Wage growth remained unchanged with average hourly earnings up only 2.7 percent for the year despite fewer workers who need jobs.

The Federal Reserve is likely to raise interest rates at its next meeting in September to 2.25 percent from 2 percent, in an effort to keep the labor market from reaching a boiling point.

“Overall, the report did little to change perceptions that the labor market is tight but has yet to begin overheating, and it keeps the Fed on track for a rate hike next month,” said Curt Long, chief economist with the National Association of Federally Insured Credit Unions.

On Wednesday, the federal Departments of Health and Human Services, Labor and the Treasury issued a final rule to help Americans struggling to afford health coverage find new, more affordable options.

The rule allows for the sale and renewal of short-term, limited-duration plans that cover longer periods than the previous maximum period of less than three months. Such coverage can now cover an initial period of less than 12 months, and, taking into account any extensions, a maximum duration of no longer than 36 months in total. This action will help increase choices for Americans faced with escalating premiums and dwindling options in the individual insurance market.

In a recent release of three reports on the current state of the individual insurance market, Centers for Medicare & Medicaid Services (CMS) data reveal serious problems. While enrollment data show stable enrollment for subsidized exchange coverage, the number of people enrolled in the individual market without subsidies declined by an alarming 20 percent nationally in 2017, while at the same time premiums rose by 21 percent. Many state markets experienced far more dramatic declines, with unsubsidized enrollment dropping by more than 40 percent in six states, including a 73 percent decline in Arizona.

Short-term, limited-duration insurance, which is not required to comply with federal market requirements governing individual health insurance coverage, can provide coverage for people transitioning between different coverage options, such as an individual who is between jobs, or a student taking time off from school, as well as for middle-class families without access to subsidized ACA plans. Access to these plans has become increasingly important as premiums have escalated for individual market plans, and affordable choices for individuals and families have dwindled.

Back-to-school shopping is in full swing, and shoppers in Wisconsin can get many school supply items tax free starting Wednesday.

It’s part of the state’s first ever sales tax holiday that runs from August 1-5. The tax exemption is part of a bill Governor Scott Walker signed into law in April.

Tax free items will include items such as binders, notebooks and glue. Clothing less than $75 is also on the list.

Electronics, such as desktop computers and tablets are on the list as long as the item is $750 or less.

For a more comprehensive list of items included in the sales tax holiday, click here.

President Donald Trump’s administration signed off Sunday on Gov. Scott Walker’s $200 million plan to lower Affordable Care Act premiums.

Under Walker’s plan, consumer costs are expected to go down by 3.5 percent on average next year for individuals getting insurance through the marketplaces established by the act.

Wisconsin taxpayers will spend $34 million on Walker’s plan. The remaining $166 million will come from federal taxpayers.

Walker and lawmakers approved their plan in February but needed permission from the Centers for Medicare and Medicaid Services because the federal government would fund the bulk of it.

They received the federal approval Sunday, and within hours Walker put his signature on it during his stop here. The plan will take effect Jan. 1.

Under the plan, the number of people getting insurance on the Obamacare marketplace would dip in 2019 to an estimated 184,700.

The program — dubbed the Health Care Stability Plan — is targeted at consumers who buy individual health insurance through the Affordable Care Act but who make too much money to qualify for federal subsidies to lower their premiums. Those consumers saw their premiums go up by 44 percent in 2018 in Wisconsin.

Walker’s plan will help insurers cover the cost of patients with claims of $50,000 to $250,000. With the Walker plan covering half those costs, insurers will be able to charge lower premiums.

Under the plan, premiums on average will drop by 3.5 percent from current levels and will be 11 percent lower than they would have been in 2019 without the plan, according to his administration. Walker noted not everyone will see a reduction in their premiums.

Consumers and government spending powered the economy to a 4.1% rate of gross domestic product growth in the second quarter, the fastest pace in almost four years. Growth was revised up in the first quarter to 2.2% from 2%.

Activity boomed in the second quarter and the growth does not seem to be due to one-off factors, as some economists had feared.

Over the past year, the economy has expanded at a 2.8% annual pace, up from a 2.6% annual rate in the first quarter. Economists say this is strong enough to keep putting downward pressure on the unemployment rate.

Fed Chairman Jerome Powell has said that strong growth is one reason the central bank should keep raising interest rates. With inflation moderate, the Fed is expected to stay on the pace of a quarter-percentage point rate hike every three months.

Many analysts think growth should stay strong, helped by stimulative fiscal policies, such as tax cuts. There is concern reported in various business surveys that trade disputes could slow activity, but so far there is little evidence of any disruption in the economic data.