News of the Day

A circuit court should’ve weighed in on whether the Department of Revenue’s (DOR) guidance on a new tax exemption for personal property constituted an unpublished rule rather than deferring to the Tax Appeals Commission first, the state Supreme Court has ruled.

The ruling will make it easier to challenge DOR guidance and other advice in circuit court rather than going to the Tax Appeals Commission, an independent agency the Legislature created to hear disputes between taxpayers and the departments of Revenue and Transportation.

Wisconsin Manufacturers & Commerce (WMC) didn’t agree with a letter DOR sent the business group over its interpretation of the personal property tax exemption and filed the suit, which was dismissed by an Ozaukee County judge

Writing for the majority, Justice Brian Hagedorn found the question of whether the letter constitutes an unpromulgated rule doesn’t draw upon the Tax Appeals Commission’s expertise in tax matters. Rather, the question “goes to the authority and process by which an agency must adopt and administer the law.”

That is best answered by a court, not an agency that “has no unique expertise over whether a letter fits the definition of a rule.”

The dispute began after WMC asked Revenue how a new exemption would be applied. The business group argued that “machinery, patterns and tools that are not used in manufacturing” are exempt under the change even if that property is “located on manufacturing property.”

Revenue disagreed, and WMC filed the suit. It argued the DOR letter amounted to an unpromulgaed rule and was invalid.

After an Ozaukee County Circuit Court dismissed the suit, an appeals court upheld that ruling.

Though the state Supreme Court was unanimous in believing the circuit court should’ve heard the case, only liberals Ann Walsh Bradley, Rebecca Dallet and Jill Karofsky fully signed onto Hagedorn’s opinion. Meanwhile, Justice Pat Roggensack wrote her own concurring opinion that was joined by fellow conservative Rebecca Bradley.

Dr. Fred Prehn, the former head of the Wisconsin Natural Resources Board, can continue to serve on the policy-making board now that the Wisconsin Supreme Court has ruled it’s legal for him to remain.

Wisconsin Attorney General Josh Kaul sued to remove Prehn from the NRB in August. The board’s former chair has refused to step down from the policy-making body after his six-year term expired in May last year. Former Republican Gov. Scott Walker appointed Prehn in 2015.

“(T)he expiration of Prehn’s term on the DNR Board does not create a vacancy. Prehn lawfully retains his position on the DNR Board as a holdover,” wrote Chief Justice Annette Ziegler for the majority. “Therefore, the Governor cannot make a provisional appointment to replace Prehn.”

The court found a vacancy is only created when a person dies, resigns, or is removed for cause.

Prehn’s decision to stay on the board has blocked Democratic Gov. Tony Evers’ appointee Sandy Nass from taking a seat. Evers appointed Nass and Sharon Adams to the board in April of last year to fill vacancies left by members whose terms expired, including Prehn.

Prehn could remain on the board for years if Republican lawmakers refuse to confirm Evers’ appointee. The state Senate adjourned its latest session earlier this year without confirming Nass.

The Supreme Court dealt a significant blow to the Biden administration’s climate change agenda, ruling Thursday that the Environmental Protection Agency cannot pass sweeping regulations that could overhaul entire industries without additional congressional approval.

The 6-3 decision limits how far the executive branch can go in forcing new environmental regulations on its own.

“Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible ‘solution to the crisis of the day,’” Chief Justice John Roberts said in the Court’s opinion. “But it is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme in Section 111(d). A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body.”

The question of how much power the EPA has was based on a provision in Section 111 of the Clean Air Act, which grants the EPA power to set “standards of performance” for existing sources of air pollutants as long as they take into account cost, energy requirements, and non-air health and environmental impacts.

Similarly, West Virginia and other states claimed that Section 111 does not allow the EPA to go so far as to make rules that would completely reshape American electrical grids or force industries to eliminate carbon emissions altogether.

West Virginia’s argument is based on the “major questions doctrine,” which says that even though federal agencies generally have broad rule-making power as delegated by Congress through the statutes that create them, when it comes to issues of major economic and political significance to the country those statutes need to have clear language to support the agency’s action.

Without clear language, they would need new legislation that specifically grants them the power to carry out their actions.

In 2021, Wisconsin’s state and local governments and school districts counted just under 277,800 full-time equivalent employees, the fewest on a per-capita basis in two decades. While the pandemic played a role, years of tight school revenue limits and local property tax caps also likely contributed. Other factors may include technology, rising healthcare costs, and declining school enrollments. Average pay for these Wisconsin workers also declined relative to the nation, though that may reflect lagging incomes for all workers in the state.

Last year, out of every 1,000 state residents, 35.6 full-time equivalent employees (FTEs) worked for a local government (including school districts) in Wisconsin and 11.5 for the state government. Those numbers are down markedly from the early 2000s and have fallen even more than the national trend. In fact, the 47.1 state and local government FTEs in Wisconsin per 1,000 residents is the lowest level in the last two decades

In 2002, Wisconsin’s state and local employment level per capita was 2.5% below the national average. By 2021, however, Wisconsin’s employment level per capita was 4.7% below the U.S. average. The total of 277,783 state and local government FTEs in Wisconsin was also lower in absolute terms in 2021 than in 2002 (289,944).

Compared to other states, Wisconsin tends to deliver more services at the local level and looking at local government employment alone yields an even clearer story. In 2021, Wisconsin employed 11.5% fewer local FTEs per capita compared to 2002, the tenth-largest decline of any state and above the national decline of 9.2%. This drop-off is largely driven by a decline in employment in K-12 school districts, which account for a majority of local workers in the state.

A Wisconsin trucking CEO said a new program permitting 18-year-olds to travel across state lines may help boost his company’s apprenticeship opportunities.

A provision in the bipartisan infrastructure law that passed in late 2021 allows 18-year-olds to become interstate truckers. Formerly, truckers needed to be 21 years old to do that work.

Green Bay-based Schneider trucking has long struggled to hire as many drivers as demand would support. Speaking on Wisconsin Public Radio’s “The Morning Show” on Thursday, Schneider CEO Mark Rourke said the new program will help.

“We don’t have a great apprenticeship program to take somebody right out of high school and build their skills,” Rourke said. “It’s a positive development.”

The pilot program became law in January, but there are plenty of questions remaining about the program’s rollout, especially around safety concerns. Rourke said it remains to be seen how insurance companies price insurance on younger truck drivers. High insurance premiums could continue to keep recent high school graduates off the road for interstate travel.

More broadly, the trucking industry has long pushed for a federal law to lower the age for potential drivers. In 2019, a congressional report found that young commercial drivers are more likely to be involved in crashes than older ones. Trucking industry lobbyists noted that 18-year-olds are already allowed to drive tractor-trailer trucks; they just can’t cross state lines, making them ineligible for long-haul jobs.

The federal pilot apprenticeship program requires 400 hours of additional safety training.

Last Thursday, the Public Service Commission of Wisconsin (PSC or Commission) awarded funding from the state’s Broadband Expansion Grant Program. The Commission awarded $124,967,392 for 71 projects that will expand broadband internet to more than 82,912 residential and 4,566 business locations currently unserved or underserved. The projects receiving awards will impact 45 counties. The grant awards will leverage $185,780,074 of matching funds from recipients.

The broadband expansion grants invest in construction projects for internet service in areas of the state that are challenging to connect due to population density or geography. Since 2014, 434 grants have been awarded through the grant program from state and federal funding to projects impacting 71 counties.

A list of the 2022 grant recipients can be found here.

A map of 2022 grant recipients can be found here.

Several Wisconsin coal plants will remain online years longer than planned.  Madison-based Alliant Energy and Milwaukee-based We Energies said those delays and economic challenges will postpone operation of clean energy projects.

Utilities also expressed concerns about maintaining reliable power as the regional grid operator has said 15 states, including Wisconsin, could see an energy shortage of 2,600 megawatts next year.

Alliant previously announced plans to shut down its 400-megawatt Edgewater coal plant in Sheboygan by the end of this year and its 1,100-megawatt coal plant in Columbia County by 2025. Now, the utility said Edgewater will continue to operate until mid-2025 while Columbia is now slated to retire by mid-2026.

“That adjusted timing allows our company some flexibility beyond 2022 to manage that regional capacity and (those) supply chain challenges as we move forward with adding that solar and other resources to diversifying that energy mix,” said David de Leon, president of Alliant’s utility in Wisconsin.

We Energies announced Thursday that plans to shut down its coal-fired units at the South Oak Creek coal plant in Milwaukee County will be delayed by a year. The utility now plans to retire two units by May 2024 and its last two units by late 2025.

“The decision to postpone the retirement dates for these units is based on two critical factors: tight energy supply conditions in the Midwest power market and supply chain issues that will likely delay the commercial operation of renewable energy projects that are currently moving through the regulatory approval process,” Scott Lauber, president of We Energies, said in a statement.

If We Energies retired plants on schedule, the utility argued it would be more costly to make up for that shortfall in power generation by buying power on the market.

“Not only might that not be there because there could be capacity issues, but even if it was there, it’s going to be very, very expensive,” said Brendan Conway, We Energies spokesperson. “Based on current prices, literally tens of millions of dollars more a year to buy (power) on the market as opposed to running the plant on those peak days.”

Self-insured employers have been fighting the good fight against runaway health costs for their companies and for their workers for decades, without much help from state and national politicians. But a ray of sunshine has emerged: the courts.

A cause-driven law firm, Fairmark Law, has filed a federal class-action law suit in Wisconsin on behalf of self-insured employers and their employees against one of the state’s biggest hospital conglomerates, Advocate Aurora Health. The firm is charging monopolization and price gouging. The David versus Goliath suit was filed in the name of a small company, Uriel Pharmacy based in East Troy, Wisconsin.

The Medical Industrial Complex (MIC) of big hospital corporations and giant health care insurers has increased its rates close to 8% per year over the last two decades. That gouging has had the cumulative effect of raising the cost of care for a family of four to $22,000 to $30,000, depending on which consultant is keeping score.

In contrast, the most astutely managed company health plans have limited inflation to 2% to 3% per year. Total costs for a family can run $12,000 to $14,000 per year. That’s still expensive, but not outrageously so. (Note: The pure medical side of American health can be exemplary.)

That massive cost discrepancy is at the heart of the Fairmark case against Advocate Aurora.

Fairmark looks at the courts as one way to overcome anti-competitive contracting and imbalance of power between smaller payers and the Medical Industrial Complex.

Its Wisconsin case will be buttressed by a recent Rand Corp. analysis that ranks the state 4^th highest in the country in comparison to Medicare payments. Our hospitals charge private companies three times what they pay Medicare.

Advocate Aurora Health has a monster merger in the works with Atrium Health of North Carolina. It’s hard to see any operating synergies between those two distant operations. But the combination would gain leverage for higher prices with the nation’s largest health insurers.

Wisconsin’s governor is warning gas stations in the state not to raise prices too high. His new executive order, however, is unlikely to make gas any cheaper.

Governor Tony Evers on Tuesday signed an executive order forbidding price gouging.

“This emergency order will help prevent bad actors from taking advantage of Wisconsin drivers as they fill up the tank to get to work, school, supplies and resources for their businesses, or get their product to market,” the governor said in a statement.

Evers’ order declares that “a period of abnormal economic disruption” exists in Wisconsin, and bans gas stations from hiking prices more than 15% above the highest price in the state.

AAA on Tuesday said the average price for a gallon of regular gas in Wisconsin is $4.82.

But the state’s Petroleum Marketers said local gas stations are not the one responsible for high prices.

“A myriad of factors impacts the price consumers pay at the pump, including: the cost of crude oil; federal/state taxes; boutique fuel requirements; and credit card swipe fees which remain the highest expense after labor for gas station owners,” the Wisconsin Petroleum Marketers & Convenience Store Association said in a statement.

Democratic lawmakers are applauding Gov. Evers’ new order.

“Gas and diesel prices are a major concern for Wisconsinites right now,” Sen Melissa Agard, D-Madison, said. “It is egregious that big oil companies are taking advantage of regular folks while padding their own pockets.”

The recently-selected chair of the Wisconsin Elections Commission said Monday he hopes to help restore voter’s faith in the state’s elections.

Republican attorney Don Millis was appointed to the WEC on June 8 by Assembly Speaker Robin Vos. Two days later, the six-member board selected him as its new chair.

In an appearance on WPR’s “The Morning Show,” Millis said he wants to “return to a time in which people could rely on or have faith in the election process.” He said “safeguards” such as voter ID and a statewide voter registration did not prevent challenges to the results of the 2016 and 2020 presidential elections.

“I think there’s less faith in the confidence that elections, election results reflect the true vote than at any time in our history,” Millis said.

Millis laid out his ideas for using federal funding to increase audits of voting machines following elections. He said his goal would be an audit of 10 percent of voting machines statewide after each general election.

“That’s a process in which you rerun the ballots and then you hand count the ballots to see what the error rate (is),” Millis said.

In 2018 and 2020, those random audits covered about 5 percent of voting equipment across the state. Neither audit found issues or anomalies with the machines checked.

“There’s a couple reasons for (auditing),” Millis said. “One is to make sure that the machines are running properly. The other is educational, because despite the best efforts of our clerks, often people will not make marks the way they should.”