News of the Day

The Federal Reserve said Wednesday it will hold interest rates steady at a 22-year high for the third consecutive meeting, as US economic growth slows and investors look toward the beginning of rate cuts sometime next year.

The Fed has raised rates 11 times since March 2022 to combat high inflation, which has slowed markedly after hitting a four-decade high last summer.

Still, the central bank hasn’t crossed the finish line just yet. Fed officials are expecting inflation to cool next year at a slightly faster pace than previously estimated, according to their latest set of economic projections, released Wednesday.

Some economists say the final mile of the Fed’s historic inflation fight will be the most difficult. In his post-meeting news conference, Fed Chair Jerome Powell reiterated that additional rate hikes remain on the table.

As expected, the Fed chief got peppered with questions from reporters on the central bank’s approach to cutting rates.

Powell said “no one is declaring victory” just yet, and that doing so would be “premature,” but he admitted that officials are, at the very least, already discussing rate cuts.

“The question of when will it become appropriate to begin dialing back policy, that begins to come into view and is clearly a topic of discussion now in the world and was also a discussion for us at our meeting today,” Powell said.

A key question for the Fed early next year will be: What are the criteria for rate cuts?

Powell said “you want to be reducing restriction on the economy well before 2%.” He said that waiting to cut rates until inflation reaches 2% would “be too late.”

Overall property taxes in Wisconsin are expected to climb by the largest amount since 2007, despite increased state funding for local governments.

That’s according to a new report from the Wisconsin Policy Forum. It analyzed confirmed property taxes from school districts, technical colleges and county governments, along with Legislative Fiscal Bureau projections for municipalities.

While gross local property taxes are anticipated to rise by 4.7 percent — the most since 2007 — the state budget boosted two tax credits that will help offset the increase, the report said. That includes increasing the school levy tax credit by $255 million and the state lottery tax credit by $15.9 million.

Ari Brown, a researcher for Wisconsin Policy Forum and the report’s author, said those credits will help keep property taxes in-line with pre-pandemic increases, while also boosting revenue for local governments and schools.

He said counties and municipalities are limited in how much they can increase their property tax levy by their amount of net new construction. That should keep increases to those taxes relatively in-line with increases they’ve experienced in recent years, he added.

For example, Wisconsin’s counties will increase their gross property taxes by 2.6 percent this year. Last year, they increased property taxes by 3.2 percent, the report said. The state Legislative Fiscal Bureau projects municipal property taxes will rise by 3.4 percent.

Meanwhile, property taxes for school districts are expected to rise by over 5 percent from last year, the largest increase since 2009. Brown said that increase is largely due to a state-approved $325 per pupil increase to school districts’ revenue limits.

“We haven’t had a per pupil revenue limit increase — even on an inflationary basis — like this in quite a while, so that is really the driving factor behind school district property taxes increasing as much as they are,” Brown said.

The Labor Department said Tuesday that the consumer price index, a broad measure of the price of everyday goods including gasoline, groceries and rent, rose 0.1% in November from the previous month.

Prices climbed 3.1% from the same time last year, down from the 3.2% recorded in October.

Other parts of the report also pointed to cooling price pressures within the economy. Core prices, which exclude the more volatile measurements of food and energy, climbed 0.3%, or 4% annually.

Still, the report indicates that while inflation has fallen considerably from a peak of 9.1%, it remains well above the Federal Reserve’s 2% target.

“This fairly benign CPI report suggests that inflation is on a path to 2% barring an economic shock,” said Oren Klachkin, Nationwide financial markets economist. “We expect cooler inflation readings in 2024, but a return to 2% is unlikely in the very near term.”

Wisconsin high school students will have to complete at least a half credit of personal financial literacy to graduate under a new law signed Wednesday by Governor Tony Evers. Wisconsin is now the 24th state to guarantee a standalone half-credit course in financial literacy, according to Next Gen Personal Finance.

Students will be required to take a course that includes lessons on different skills, including money management, saving and investing and credit and debt. The mandate will start with the 2028 graduating class.

The financial literacy bill had broad, bipartisan support in the Legislature, passing the Senate on a 29-4 vote and passing the Assembly 95-1. Its backers cite a wide range of reasons.

Rep. Alex Dallman, R-Green Lake, the lead author of the plan, said financial literacy is the most important skill to give the next generation of students.

“We need to make sure that people aren’t relying so much on either government welfare or benefits, and being able to keep themselves afloat and learn what it means to make money, save money, invest wisely, and also know how to get under their feet and into the economy at a much faster rate than they are right now,” Dallman said.

Rep. Jenna Jacobson, D-Oregon, said a mandate will allow for equitable access to financial literacy.

“Not just because your parents were good at handling money or you took a specific class and it was embedded in that, but every kid has that touchpoint where they’re learning financial information,” Jacobson said.

Wisconsin’s maximum Worker’s Compensation rate will increase to $1,296 per week for temporary total disability, permanent total disability and death benefits for injuries occurring on or after January 1, 2024.

The new average weekly wage used to compute the maximum rate is $1,944. Using this new wage raises the maximum death benefit for fatal injuries occurring on or after January 1, 2024, to $388,800. The maximum burial expense remains $10,000 and the death benefit to unestranged parents remains $6,500.

As of this date, the maximum weekly indemnity rate for permanent partial disability will remain $430 for injuries occurring on or after January 1, 2024. If this benefit rate is changed, a new Insurance Letter will be sent.

The 2024 maximum limit for private vocational rehabilitation services increased by 5.065% to $2,063. When the Department of Workforce Development’s Division of Vocational Rehabilitation (DVR) is unable to provide services to eligible injured workers, insurers are required to pay the reasonable and necessary vocational rehabilitation costs including the costs of services provided by the vocational rehabilitation specialists in the private sector. This change is based on the average annual percentage change in the U.S. Consumer price index for all urban consumers. The new limit applies regardless of the date of injury.

Gov. Tony Evers signed a bipartisan bill Tuesday which includes over $500 million in public funds for upgrades to American Family Field, ensuring that the Milwaukee Brewers stay in the city until at least 2050.

The state will spend about $387 million under the plan, according tothe latest summary by the Legislature’s nonpartisan budget office. That contribution could go down to $366 million, depending on how much is generated by a new ticket surcharge.

The city of Milwaukee and Milwaukee County will also pay a combined $135 million for the deal. That’s a reduction from earlier versions of the plan, which was adjusted after some local leaders worried the contribution from the communities would be too high for the cash-strapped city and county.

The team’s contribution to the deal will be about $110 million.

The ticket surcharge, which will cover non-Brewers events like concerts, will start at $2 in 2024 and step its way up to $4 by 2042 for most tickets. For luxury boxes, the surcharge will start at $8 and work its way up to $10 by 2042.

Part of the law also includes winterizing the stadium, so it can be used for events in colder months. Brewers president of business operations Rick Schlesinger said that work will begin after the end of the next season.

Michigan officials approved a $500 million plan Friday to encase in a protective tunnel a portion of an aging oil pipeline that runs beneath a channel connecting two Great Lakes, leaving just one more regulatory hurdle for the contentious project.

The state’s three-person Public Service Commission approved the project in the Straits of Mackinac on a 2-0 vote. Commissioner Alessandra Carreon abstained, noting she just joined the commission four months ago.

The plan still needs approval from the U.S. Army Corps of Engineers, which is still compiling an environmental impact statement. A final decision may not come until 2026.

Enbridge Energy has been operating the Line 5 pipeline since 1953. The pipeline moves up to 23 million gallons (87 million liters) of crude oil and natural gas liquids daily between Superior, Wisconsin, and Sarnia, Ontario.

A 4-mile (6-kilometer) portion of the pipeline crosses the bottom of the Straits of Mackinac.

The Biden Administration is forging ahead with its green agenda by committing the United States to not building any new coal plants and phasing out existing plants.

U.S. Special Envoy for Climate John Kerry announced at the annual United Nations climate change summit, known as COP28 and which is being held in Dubai, although no date was given for when the existing plants would have to go.

“We will be working to accelerate unabated coal phase-out across the world, building stronger economies and more resilient communities,” Kerry said in a statement.

As of October, just under 20% of the U.S. electricity is powered by coal, according to the Department of Energy. The amount of coal burned in the United States last year was less than half what it was in 2008.

Last month President Biden said that coal plants “all across America” will be shut down, to be replaced with wind and solar.

A move to close down coal plants in the U.S. is already underway as federal clean energy tax credits and regulations make it harder for operators to compete economically.

A report by the nonpartisan Institute for Energy Economics and Finance Analysis found that 173 coal plants are set to close by 2030 and another 54 by 2040.

A proposal from Republican lawmakers would offer state tax breaks to Wisconsin businesses that help their employees afford child care. The refundable tax credits would apply to businesses that start their own day cares for workers, as well as to those who help employees pay for outside providers.

During a public hearing this week, Sen. Dan Feyen, R-Fond Du Lac, said the legislation is one way to increase participation in Wisconsin’s workforce. “Wisconsin is facing rising costs and reduced capacity in our day care industry,” said Feyen, a co-sponsor of the proposal. “This is putting incredible strain on working families (and) putting parents in a position of choosing between dual incomes or sending kids to a day care.”

The bill includes a credit of up $100,000 to help a business with the start-up costs of creating its own day care program for the children of employees. A business could use that credit for capital expenses, such as playground equipment or lease or mortgage payments. A business could also use that credit to pay an outside nonprofit to establish a day care program.

It would be on top of a proposed credit of up to $3,000 per child to cover the operating and administrative costs of an employee’s child care. Those payments could be made either to a business’ in-house day care or to an outside provider, but the employer would only be eligible for the additional per-child credit if the employer covers at least half of the employee’s child care costs.

That requirement for a matching contribution will ensure an employer has “sufficient skin in the game,” said Rep. David Armstrong, R-Rice Lake, who introduced the legislation. While Armstrong acknowledged the bill is “not a magic bullet,” he said he hopes it will encourage employers to be “more aggressive” in responding to their workers’ child care needs.

If the bill becomes law, Wisconsin would join 19 other states that offer similar types of child care tax credits to employers.

The Wisconsin proposal would be more expansive than a federal tax credit that already applies to employers that provide or help pay for child care, according to an analysis from Wisconsin’s Department of Revenue.

The core Personal Consumption Expenditures price index, which excludes volatile gas and food prices and is the Fed’s preferred inflation gauge, rose 0.2% last month and 3.5% for the year ended in October, according to data released Thursday.  The core PCE price index is at its lowest annual rate since April 2021.

When including gas and food prices, the overall PCE index was unchanged last month. It’s the first time since April 2020 that prices did not rise on a monthly basis.

Annually, the headline index is up 3%, which is the lowest it’s been since March 2021.

The Commerce Department’s latest Personal Income and Outlays report also showed that consumers reined in some spending in October. Consumer expenditures increased 0.2% last month, a marked pullback from the 0.7% jump seen in September.

Spending on international travel, hospital and nursing home services, accommodations and gasoline helped to drive the month’s increase.

Personal income increased by a modest 0.2% last month, and the savings rate ticked up by 0.1 percentage points to 3.8%, according to the report.