News of the Day

New home sales ticked up in January, despite a twin burden imposed by elevated mortgage rates and expensive housing prices, according to U.S. Census data released on Monday.

Sales of new single-family homes rose 1.8% in January compared to the previous year, data showed. The survey found an estimated 661,000 homes were sold in January. On a monthly basis, sales climbed 1.5% from December.

The fresh data offers a glimmer of optimism for an otherwise sluggish housing market. By contrast, existing-home sales declined in January compared to the previous year, the National Association of Realtors said last week.

The divergent trends for new and existing home sales trace back to elevated mortgage rates. The average interest rate for a 30-year fixed mortgage has soared to 6.9%, rebounding after a steady decline at the end of last year, according to a report from Freddie Mac on Thursday.

The median sales price of new houses sold in January was $420,700.

Drivers in eight Midwestern states will be able to fuel up with a higher blend of ethanol throughout the year under a final rule announced Thursday by the Environmental Protection Agency.

The rule, which takes effect in April 2025, will apply in Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin. Those states grow the bulk of the U.S. corn crop and are home to much of the nation’s ethanol production.

Most gasoline sold across the country is blended with 10% ethanol, though 15% blends are becoming increasingly common, especially in the Midwest. E15 summer sales still will not be allowed in most of the country during summer.

The Supreme Court on Wednesday appeared sympathetic to a group of states, companies, and trade associations seeking to temporarily block a rule issued by the Environmental Protection Agency to reduce air pollution from power plants and other industrial facilities in 23 states that do not want to adjust their emissions policies. During approximately 90 minutes of oral arguments, the court’s conservative justices voiced skepticism about the process that the EPA followed in implementing the rule, while the court’s liberal justices questioned the wisdom of putting the rule on hold before any lower court has had a chance to weigh in.

The law at the center of the case is known as the “good neighbor” provision of the Clean Air Act. It requires “upwind” states to reduce emissions that affect the air quality in “downwind” states.

In 2015, the EPA issued new air-quality standards for ozone pollution, which at high levels can cause major health problems. The new EPA standards triggered an obligation for states to submit plans to indicate both how they would comply with those standards and, in particular, how they would reduce emissions that affect the air quality in downwind states.

The dispute at the center of this case arises from the EPA’s decision last year to reject the plans submitted by 21 states, which had not proposed any changes to their emissions plans. One month after throwing out the state plans, the EPA published its own plan for those states, as well as for two other states that had not submitted plans.

Representing the states, Ohio Solicitor General Mathura Sridharan argued that the process by which the EPA had arrived at its federal plan was flawed. Specifically, she contended, 12 states had gone to court to challenge the EPA’s rejection of their plans, and several courts of appeals have put those rejections on hold, precluding the EPA from imposing its federal plan on those states.

But the EPA’s plan, Sridharan explained, relied on the assumption that all 23 states would participate in the federal plan. Once it became clear that not all states would be part of the plan, she told the justices, the EPA need to consider what the effect of less-than-full participation would have.

The EPA’s failure to do so, Sridharan continued, “has become consequential,” because the EPA’s plan “now regulates under half of the states and a quarter of the emissions that the EPA originally set out to regulate.”

Catherine Stetson, representing companies that own and operate natural gas pipeline engines, emphasized that “the purpose of the ‘good neighbor’ provision is to reduce the significant contribution that upwind states make to downwind states” – not simply to protect downwind states. Therefore, she reasoned, the EPA should have examined whether, with only 11 states subject to the federal plan, “there would still be a significant contribution” to downwind air quality.

Stetson added that, if the rule is allowed to remain in effect, it could mean “hundreds of millions if not billions of dollars in costs over the next 12 to 18 months.” By contrast, she suggested, there is not a “very, very significant downwind problem” but instead a “minuscule” one.

A decision in this case is expected by summer.

Yesterday, the state Senate today sent a $2.1 billion GOP tax relief package to Governor Tony Evers.

The biggest ticket item in the package was AB 1020, which would expand the amount of income covered by the state’s second-lowest tax bracket of 4.4%. For married joint filers, the second-lowest tax bracket covers income between $19,090 and $38,190 under current law. AB 1020 would expand that to a cap of $150,000, and it would require the Department of Revenue to update withholding tables by July 1. LFB projects the change would reduce individual income tax collections by $1.2 billion in fiscal year 2024-25 and $751.9 million annually after that. The 2024-25 impact includes a one-time cost of $439 million to update withholding tables.

AB 1023 would expand the state credit for child and dependent care expenses to 100% of the credit claimed on a filer’s federal income tax return. Currently, the state credit equals up to 50% of the federal credit. It would reduce individual income tax collections by $72.9 million annually, beginning in 2024-25, according to the Legislative Fiscal Bureau. The Senate signed off 29-3 after the Assembly backed it 92-4.

The other pieces of the package include:

*excluding the first $75,000 of retirement income subject to state taxes for those 65 and older. For married joint filers, the bill would exempt the first $150,000. AB 1021 would cover payments from pensions and retirement plans such as a 401(k). It wouldn’t apply to retirement income already exempt from current state law, such as a distribution from a Roth IRA. The proposal would reduce taxes by $658.2 million in 2024-25 and $472.4 million annually thereafter. The average decrease would be $1,582 per filer.

Social Security benefits, federal pension payments for military and government employees, and income from certain public retirement systems are already exempt from calculating a filer’s adjusted gross income. State law also exempts the first $5,000 in income for those 65 and over with an adjusted gross income of less than $15,000 or $30,000 for married joint filers.

*increasing an existing nonrefundable tax credit for married couples to $870 from $480. AB 1022 would reduce taxes by $169 million in 2024-25 and $160.9 million annually after that, with an average decrease of $338.

Wisconsin’s winter has been unseasonably warm and dry — impacting businesses that rely on snow and ice.

Those businesses may be eligible for federal aid through the U.S. Small Businesses Administration’s disaster loan program. The loans are meant to help businesses get through emergency situations that have led to economic losses.

In conversations with the Small Businesses Administration, Gov. Tony Evers and U.S. Sen. Tammy Baldwin clarified that businesses in Wisconsin counties under a drought declaration qualify for the loans.

Under the program, businesses can borrow up to $2 million to cover their losses.

The National Weather Service reports that Wisconsin snowfall has been 20 to 30 inches below normal this winter. In Ashland, Iron and Vilas counties, snowfall has been 40 to 70 inches below normal.

For more information about the loans, businesses can go to https://lending.sba.gov.

Governor Tony Evers has signed new legislative maps into law, potentially loosening the GOP grip on power in Wisconsin state government for the first time in well over a decade.

It also likely ends the months-long redistricting lawsuit before the Wisconsin Supreme Court that teed up these maps. The court’s 4-3 liberal majority struck down the current district lines in December and was laying the groundwork to draw new maps if Evers and the Legislature couldn’t do it first.

The new maps passed by the Legislature and signed by Evers are identical to those the governor submitted to the court as one of six options to replace the Republican-drawn districts. Redistricting experts hired by the court’s liberal majority say the governor’s maps have a slight Republican tilt but are competitive enough that “the party that wins the most votes will win the most seats” in the state Legislature.

In a social media post, Evers said, “When I promised I wanted fair maps — not maps that are better for one party or another — I damn well meant it.”

“The people should get to choose their elected officials, not the other way around,” Evers said. “And under the maps I’m signing today, I am making good on that promise.”

We Energies plans to spend $1.2 billion dollars at its Oak Creek Power Plant to convert the facility from a coal-fired power plant to a natural gas plant.

The utility also plans to spend roughly $200 million to build a liquefied natural gas storage facility in Oak Creek, and $211 million to install gas-fired reciprocating internal combustion engines near the Paris Generating Station in Kenosha County.

We Energies anticipates bringing the natural gas operations at Oak Creek online by June 2028, and hopes to have the gas units at the Paris site online by summer 2026, according to a document the utility filed with the Public Service Commission of Wisconsin.

The document estimates the Oak Creek natural gas operations will be able to generate between 1,100 and 1,200 megawatts of power, while the Paris gas units will generate 130 megawatts.

Dan Krueger, executive vice president of We Energies’ parent company, WEC Energy Group, said the natural gas units will primarily serve as backup power sources for times when the utility can’t count on renewable energy resources.

Krueger also said the planned investment is in response to new capacity requirements from the Midwest grid operator, a projected increase in electricity demand in southeast Wisconsin and proposed federal regulations on coal plants.

He said Microsoft’s proposed investment in data centers in Mount Pleasant and other industrial developments in that part of the state are driving a projected increase in demand for power. Meanwhile, he says the proposed federal clean air rules require coal plants either retire, be converted to gas or have “expensive equipment” placed on them for alternative generation.

“For our ratepayers in Wisconsin, we looked at all those economics, and by far the best approach for the most part is to repower the (coal) plants to gas,” Krueger said. “This is driven by the pending or proposed clean air rules which would go into effect in 2030.”

More Wisconsin teenagers would be able to work jobs without obtaining permits under a Republican-authored bill the state Assembly approved and sent to Governor Tony Evers on Tuesday.

Former Republican Governor Scott Walker signed a bill in 2017 that eliminated work permit requirements for 16- and 17-year-olds. The new bill eliminates the requirement for 14- and 15-year-olds. The proposal doesn’t change state law governing how many hours minors can work or prohibiting them from working dangerous jobs.

The bill would cost the state about $216,000 in revenue annually from lost permit fees and eliminate the state Department of Workforce’s only means of gathering child labor data, according to a fiscal estimate from the agency.

But supporters say the measure would eliminate red tape for both employers and teenage job applicants and bolster the state’s workforce.

The bill, which was approved by the Senate in October, passed in the Assembly by a 62-34 vote.

The measure goes next to Governor Evers, who will likely veto it.

Consumer spending fell sharply in January, the Commerce Department reported Thursday. Advance retail sales declined 0.8% for the month following a downwardly revised 0.4% gain in December.

Sales at building materials and garden stores were especially weak, sliding 4.1%. Miscellaneous store sales fell 3% and motor vehicle parts and retailers saw a 1.7% decrease. Gas station sales also declined 1.7% as prices at the pump dropped during the month. On the upside, restaurants and bars reported an increase of 0.7%.

Consumer strength has been at the center of a U.S. growth picture that has proven far more durable than most policymakers and economists had expected. Spending accelerated by 2.8% in the fourth quarter of 2023, finishing out a year in which gross domestic product rose 2.5% despite widespread predictions for a recession.

However, worries linger that stubbornly high inflation could take its toll and jeopardize prospects going forward.

“It’s a weak report, but not a fundamental shift in consumer spending,” said Robert Frick, corporate economist for Navy Federal Credit Union. “December was high due to holiday shopping, and January saw drops in those spending categories, plus frigid weather plus an unfavorable seasonal adjustment. Consumer spending likely won’t be great this year, but with real wage gains and increasing employment it should be plenty to help keep the economy expanding.”

Republicans in the Wisconsin Senate and Assembly have passed new legislative district lines that are identical to those drawn by Democratic Gov. Tony Evers in their latest attempt to enact new maps before the Wisconsin Supreme Court’s liberal majority does it for them.

Senate Majority Leader Devin LeMahieu, R-Oostburg, introduced Evers’ maps as an amendment to a bill shortly after session began Tuesday. A memo from the Wisconsin Legislative Reference Bureau confirmed that maps voted on Tuesday are identical to what Evers submitted to the state Supreme Court as part of an ongoing redistricting lawsuit.

LeMahieu said Republicans decided to support the governor’s maps because “the writing was on the wall” in the Supreme Court redistricting case, arguing the court’s liberal majority hadn’t taken GOP arguments in the case seriously.

“Given the circumstance, the Legislature is faced with two choices,” LeMahieu said. “Either pass the governor’s maps as is or allow the liberal majority of the Wisconsin Supreme Court to gerrymander the state at the very last minute without public input.”

Evers vetoed a previous version of his maps that were passed by the Legislature with changes to protect a handful of GOP incumbents. But the governor indicated during an interview with WISN-TV that if Republicans passed his maps unchanged, he would support them.

“If my maps are approved by the Legislature, of course I’d sign them,” Evers said.

Like other maps submitted to the Wisconsin Supreme Court, Evers’ plan would improve Democrats’ chances in future races for the Legislature — where right now, Republicans hold a 64-35 majority in the Assembly and a 22-10 majority in the Senate. Most of the maps submitted to the court would still give Republicans a slight edge but would likely move the Legislature closer to 50-50.