News of the Day

President Biden on Tuesday is expected to sign an executive order raising the minimum wage for federal contractors to $15 by March 2022.

At that time, the order will result in a 37-percent raise for federal contractors making the current contracting minimum $10.95, and setting their salary at over double the regular statutory federal minimum wage, which has been stuck at $7.25 since 2009.

Biden’s order would also phase out the tipped minimum wage, which stands at $7.25 by 2024, and set minimum wages for workers with disabilities on par with the standard minimum wage for contractors.

Federal agencies will have to begin incorporating the new wages into their contract solicitations by January 30, 2022, for implementation no later than March 30.

The new wages will apply to existing and multi-year contractors when their contracts receive their annual renewals, meaning some workers won’t see the benefits until later in the year.

Last Thursday, the Treasury Department and the Internal Revenue Service issued Revenue Procedure 2021-20 PDF for certain businesses that received first-round Paycheck Protection Program (PPP) loans but did not deduct any of the original eligible expenses because they relied on guidance issued before the enactment of tax relief legislation in December of 2020.

Under prior guidance, businesses that received PPP loans to cover payroll costs, interest on covered mortgage obligations, covered rent obligation payments, and covered utility payments could not deduct corresponding expenses.

With the Dec. 27, 2020, enactment of the Consolidated Appropriations Act, 2021, businesses now may claim these deductions even though they received PPP loans to cover original eligible expenses. These businesses can use the safe harbor provided by this guidance to deduct those expenses on the return for the immediately subsequent year.

Gov. Tony Evers is using $420 million of the billions in federal relief funding heading to Wisconsin to help small businesses that lost revenue because of the COVID-19 pandemic.

Evers on Thursday announced a new grant program funded by the federal American Rescue Plan Act that would provide $5,000 grants to Wisconsin businesses that have an annual gross revenue between $10,000 and $7 million — about 84,000 would qualify.

The Democratic governor also on Thursday vetoed Republican lawmakers’ plans for the federal funding, which would have spent the money in ways that federal authorities likely won’t allow.

Among the bills vetoed Thursday is one that would give property owners a payment equal to 10% of their last property tax bill. That would account for $1.1 billion of the federal funds the state is receiving. In addition, under their plans the state would have spent $500 million to pay off debt, $310 million to shore up the state’s unemployment fund, $308.5 million to repair roads and bridges, and $68.2 million to upgrade communications equipment and establish a mental health crisis center in northern Wisconsin.

Other bills vetoed Thursday appear to be in keeping with federal rules, according to the fiscal bureau. Under those provisions, the state would provide $500 million for broadband, $200 million for small businesses, $150 million for long-term care facilities, $75 million for tourism efforts, $61 million for lead pipe replacement and environmental efforts, and $50 million for rural economic development.

Senate Majority Leader Devin LeMahieu, R-Oostburg, and Assembly Speaker Robin Vos, R-Rochester, said Evers should work with the Legislature on how to spend the money.

“The governor just sent a clear message to the people of Wisconsin that they will have little to no say in how their federal tax dollars are spent,” LeMahieu said in a statement about the vetoes. “He has, once again, rejected the opportunity to work with legislators on even a basic spending plan. This is not good government.”

Governor Evers noted his grant program provides more than double what Republicans planned for small businesses.

“The Legislature’s proposal to spend just a small portion of our American Rescue Plan funds on small businesses simply won’t cut it for me,” Evers said in a statement.

Wisconsin’s troubled economic development agency improved its performance over the past fiscal year but it still must sharpen its oversight of tax credit contracts, policies on closing contracts and the accuracy of online data, according to an audit released Wednesday.

The Legislative Audit Bureau’s biennial review found the quasi-public Wisconsin Economic Development Corporation largely complied with state law and its contracts when administering tax credits, loans and grants to businesses in fiscal year 2019-20. By December, the agency had awarded about $250 million to businesses to help them through the pandemic.

The amount of past-due loans decreased from $7.6 million to $6.6 million in 2019 and 2020. The audit attributed the decline to WEDC’s writing off loans and amending contracts to defer repayments.

The agency’s largest tax credit awards, meanwhile, mostly went to historic redevelopment projects in the last fiscal year.

The top 20 tax credit awards the agency gave out totaled $44.5 million, of which $32.4 million went to projects through the state’s Historic Preservation Tax Credit program. Nine of WEDC’s 10 largest tax credit awards in the past fiscal year supported historic redevelopment projects. The Madison startup Capio Biosciences received the fourth-largest tax credit award for a $3 million incentive it received as part of the state’s qualified new business venture program, which supports investments in early-stage businesses.

WEDC CEO Melissa Hughes wrote in a three-page response to the audit that her staff has been working on ways to administer and track enterprise-zone wages and plans to close tax credit awards in a more timely manner and is working to make online data “more robust and digestible.” She said she will present an action plan to the Legislature’s audit committee within the next few months.

The renegotiated contract between Foxconn Technology Group and the State of Wisconsin offers the company up to $80 million in tax credits if the company hits certain hiring and investment targets. Specifically, the new deal requires the company to hire 1,454 qualified workers at an average wage of $53,875 and invest $672 million in capital spending.

The deal dramatically cuts the potential incentives available to the company under a previous agreement negotiated by former Gov. Scott Walker. That deal offered up to $2.85 billion in tax incentives if the company created 13,000 jobs and invested $10 billion.

Hitting the job targets would earn the company $20.3 million in tax credits while the capital investment targets are worth another $40 million. Another $19.7 million, earned with previous capital investment, would be available if the company created more than the 1,454 jobs included in the contract.

Not only does the new deal set lower job and investment targets, it also offers less of a credit for each dollar the company pays in wages and investment. Under the original deal, Foxconn earned a 17% credit on wages and a 15% credit on capital investments. The new deal drops those figures to 7% and 10% respectively, the same rates available to other companies under Wisconsin’s enterprise zone tax credit program.

In exchange for the smaller incentives, Foxconn is now free to earn credits on any economic investment activities related to operating a technology and manufacturing ecosystem. The previous deal had required the company to build a Gen. 10.5 LCD screen fabrication facility in Mount Pleasant, a plan the company had abandoned by the spring of 2018.

The deal also adds Foxconn Industrial Internet as an eligible tax credit recipient. Fii is a publicly traded company that was spun off from Foxconn’s parent company in recent years. It has already been making investments on the Mount Pleasant site where Foxconn originally planned to build its LCD plant.

Finally, the new contract plays out over a dramatically shorter timeframe. The previous deal ended at the end of 2032 while the new one ends in 2025.

Foxconn Technology Group has reached a new deal with reduced tax breaks for its scaled back project in southeast Wisconsin.

Gov. Tony Evers and the world’s largest electronics manufacturer announced the new deal on Monday. Details of the new agreement were not immediately released.

It was scheduled to be approved at a Tuesday meeting of the Wisconsin Economic Development Corp., the state’s top jobs agency that previously negotiated the initial deal with Foxconn.

Yesterday, Wisconsin Supreme Court Justice Annette Kingsland Ziegler was elected by her fellow justices as the state’s next chief justice, effective May 1, 2021. Ziegler will take over from the current Chief Justice Patience Drake Roggensack, who did not seek re-election to the post.

The Chief Justice of the Supreme Court is the administrative head of the judicial system and exercises administrative authority pursuant to procedures adopted by the Supreme Court. In this role, the Chief Justice works with fellow justices, the director of state courts, chief judges and other administrators to ensure the courts operate smoothly and efficiently.

Justice Ziegler was first elected to the Supreme Court in 2007 and re-elected in 2017. Born in Grand Rapids, Michigan, Justice Ziegler received her bachelor’s degrees in Psychology and Business Administration from Hope College in Holland, Michigan in 1986. She earned her law degree from Marquette University in 1989.

The Wisconsin Department of Health Services (DHS) is instructing Wisconsin vaccine providers to stop administering the Johnson & Johnson COVID-19 vaccine due to a federal review of adverse side effects reported. The Centers for Disease Control (CDC) and U.S. Food and Drug Administration (FDA) issued a statement (link is external)saying six cases of a rare and severe type of blood clot called cerebral venous sinus thrombosis have been reported in the U.S. out of 6.8 million Johnson & Johnson vaccine doses given.

“We are pausing administration of the Johnson & Johnson vaccine out of an abundance of caution. At this time, these adverse events appear to be extremely rare,” said DHS Secretary-designee Karen Timberlake. “Vaccine providers should not administer the Johnson & Johnson vaccine at this time, and should hold on to the vaccine until federal review has been completed.”

“There is still a lot to learn about how the vaccine might cause the problems that occurred in the six patients, which included blood clots around the brain and low platelets, but they do appear to be very rare,” said Dr. Ryan Westergaard, Chief Medical Officer for DHS. “For residents who have received the Johnson & Johnson vaccine, be in contact with your health care provider if you have a severe headache or new vision problems during the first two weeks after receiving the vaccine.”

People who received the Johnson & Johnson vaccine should monitor for the following symptoms three weeks after their vaccination: severe headache, abdominal pain, leg pain, or shortness of breath. Symptoms associated with these severe events have occurred six to 13 days after vaccine receipt. Contact your health care provider and use the v-safe program(link is external) to report your symptoms.

The Pfizer and Moderna COVID-19 vaccines continue to remain extremely safe vaccines. DHS encourages everyone eligible to get the vaccine to continue with their vaccination, especially in light of variants. Wisconsin continues to have a good supply of these vaccines; 96% of the doses administered in the state have been Pfizer and Moderna.

“\