Data center tax exemption could give away billions

The placement and construction of data centers are already a hot issue in Wisconsin due to the effects that they may have on communities and costs for local electric customers. But now there’s another way that data centers could prove costly – through a tax break that the state has to encourage this construction.

Wisconsin Watch has a good summary of what seems likely to become an exploding exemption for these projects, and the economic pros and cons of the situation.

Wisconsin is poised to forgo more than $2 billion in sales tax revenue to subsidize hyperscale data centers built by trillion-dollar companies such as Microsoft and Meta.

Data centers were granted a sales tax exemption in the 2023-25 state budget, which was approved by the Republican-controlled Legislature and Democratic Gov. Tony Evers as a way to attract economic development to the state…

State Sen. Jodi Habush Sinykin, D-Whitefish Bay, who requested the estimate, said lawmakers should discuss what the state can get in return for the exemption. She said the exemption could be tied to, for example, requirements to protect the environment.

Habush Sinykin wants the Legislature, which Republicans control, to convene what is known as an extraordinary session to discuss a variety of data center bills, rather than waiting until the next regular session in January.

Sen. Romaine Quinn, R-Birchwood, and Rep. Shannon Zimmerman, R-River Falls, introduced legislation in 2023 that led to the exemption and have proposed expanding it. They did not respond to requests for comment.

Here’s how the Legislative Fiscal Bureau describes who is eligible for the tax break, what types of expenses are able to be written off, and the type of building gets this tax break.

Under [the 2023-25 state budget], a business, and certain contractors contracting with that business, that purchases certain property for a qualified data center certified by WEDC is eligible for state and local sales and use tax exemptions for eligible costs. The exemption applies to three main "eligible costs." The first eligible cost includes the price of property used solely with building and operating the data center. The property includes the sales price of various items for computer servers, networking, energy systems, security systems, and electricity. The second eligible cost includes the price of property associated with building water cooling or conservation systems used exclusively to cool or conserve water for data centers. The systems include the price of various items such as chillers, refrigerant piping, water softeners, fans, ducting, and filters. The third eligible cost includes the price of property sold to a construction contractor that, in fulfillment of a real property construction activity, transfers the property to the owner when it becomes a component of the data center.

A "qualified data center" is one or more buildings or an array of connected buildings owned, leased, or operated by the same business entity (or its affiliate) and for which all of the following apply: (a) the buildings are rehabilitated or constructed to house a group of networked server computers in one physical location or multiple locations in order to centralize the processing, storage, management, retrieval, communication, or dissemination of data and information; and (b) the buildings create a “minimum qualified investment” in this state within five years from the certification date of at least $50,000,000, $100,000,000 or $150,000,000, depending on the population of the county in which the data center is constructed.

The business then enters into a contract with the Wisconsin Economic Development Corportation (WEDC), who certifies that the project is OK for the sales tax exemption. Here is the list of four projects that had received that signoff as of March 2026.

The Microsoft project is located in and around the part of Racine County that Foxconn was supposed to put in numerous facilities nearly a decade ago (yes, it's what replaced the Fox-con). The other 3 projects in the works are:

· Open AI, Oracle and Vantage with the beginning steps of what they claim would be a $15 billion data center campus in Port Washington, which is supposed to be completed in 2028. This is the project that caused such an uproar that the voters of Port Washington approved a referendum earlier this month that would require the voters to OK any tax incentives for future projects of this sort.
· Meta’s $1 billion data center in Beaver Dam, which is expected to be running next year.
· The $347 million Epic Hosting project in Verona that is supposed to get over the $150 million threshold for certification this year.

As of the end of 2024, only the Microsoft data center had enough expenses to be qualified. Then in 2025, Meta's new Beaver Dam data center drew enough expenses to also qualify for the tax exemption, and Epic's data center got close.

Of course, the other data center projects have a few more years to be built, so no major concerns that they won't reach the point of certification. But the sales tax exemption is already being cashed in, to the tune of $10.8 million for 2024, and at least $12.2 million in 2025 (final reports for last year still have yet to be fully submitted and certified).

As the LFB notes, Microsoft is claiming that they will eventually build over $20 billion in data centers at the Foxconn site. If that should all actually happen, a lot more than just the $10.5 million in 2024 and $12.2 million will end up being written off in sales tax for the supplies and work involved.

And if all of these projects do get built for the amount that the businesses say that they will, that’s where the LFB says the tax break could reach 10 figures.

The announcements and planned investments from these four certified companies combine for a total investment of more than $36.9 billion, spread over the life of each project (currently planned to occur between 2024 and 2028). It is estimated that an investment this size would result in $1.5 billion in initial foregone state sales tax revenue. Additional foregone state sales tax revenue of $369 million on an annual basis is estimated once these projects are completed. Expenditures eligible for the state tax exemption would also be exempt from local sales and use taxes, resulting in forgone county, city, and premier resort area tax collections, if applicable.

That would seem to blast a giant hole into tax collections for the future, a lot more than what was anticipated by LFB when this data center tax exemption was originally put into place in 2023.

[The Wisconsin Department of Revenue] indicates that, based on typical capital expenditures for the construction of a data center ($215.5 million) and adjusting for items that would otherwise be subject to sales tax, the exemption would decrease sales and use tax collections by $8,500,000 for the initial construction of facilities, with an annual sales tax reduction of $735,000 related to ongoing operating expenses of such a facility. Although there are no known facilities in the state meeting the minimum qualified investment amounts specified above, it is assumed that the provision is intended to apply to the proposed Microsoft facility, which is locating in the electronics and information technology manufacturing (EITM) zone (Foxconn). The estimated amount of foregone sales tax revenue as a result of this provision is unknown. Further, it is unknown whether WEDC would certify any new qualified data centers to be constructed during the 2023-25 biennium.

As we’ve seen, the investment into these data centers is anticipated to be a lot larger than $215.5 million. And maybe I’m missing it, but I don’t see where the sales tax numbers were adjusted down in the 2025-27 budget to account for the projected explosion of data center activity and the writeoffs that will come from it. Sure, building these data centers would likely result in a boost of construction jobs in the short term, and there is evidence that this is happening over the last year in Wisconsin.

But given that the effective state income tax comes out to something like 5% for the level of income that construction workers get, how do the additional jobs make up for the 5% sales tax exemption for the data center activities, which goes beyond worker salaries? I know, multipliers of economic activity happen with jobs, and that’s a good thing. However, we also know that the added data centers and jobs require added infrastructure costs.

And that gets to the center of the controversy comes with the building of these data centers. There are a lot of costs of added electricity and roads and other needs that may be getting shoved onto communities and local taxpayers, while the corporation gets their costs written off in this sales tax exemption, and is the main beneficiary of the infrastructure.

Which makes last week’s move from Wisconsin’s Public Service Commission all the more interesting.

The Public Service Commission of Wisconsin on Friday unanimously approved a special rate plan for data center-scale customers in We Energies’ service territory. But before doing so, they made a host of modifications to the proposal they said were aimed at protecting other customers.

The decision comes as data centers in Mount Pleasant and Port Washington could double We Energies’ energy demand by 2030. The company is preparing to spend $19.3 billion on new electricity generation over five years, according to testimony filed with the PSC.

A major concern around the country has been that some of the extra cost of establishing and using electrical service for these data centers gets pushed onto homeowners and other smaller residential customers, who end up paying more when they aren’t using more. So this PSC decision requires We Energies to lock in a 15-year agreement with large-scale users that also segregates the costs of those large-scale users.

The energy demand threshold for a customer to qualify for the rate structure was reduced from 500 megawatts to 100 megawatts, the level at which new generation projects typically require PSC approval. The commission opted to make it mandatory for eligible customers to subscribe.

Very large customers would fund and subscribe to portions of multiple new power generation projects, or entire projects. The commission removed a capacity-only subscription option that would have allowed data centers to cover 75 percent of the costs of certain generating facilities.

It’s a start, and we will see if a similar situation comes up as the PSC deals with the rates that Alliant Energy wants as part of the Meta data center project in Beaver Dam.

It’s also clear that what was expected to be a small tax break in 2023 for data centers is something that has grown into a potential budget handcuff for the coming years in our state. It may not mess things up too much this year, but if these data centers do end up getting finished and expanded, it starts to be a major tax exemption in 2027 and beyond. And it tells me that even if the AI companies come through with their promised investments in Wisconsin (instead of them being PR moves to encourage private equity suckers to keep floating them money), that tax break is yet another reason that any AI “boom” that happens is not likely to be something that has a good payoff for most of us.

WisGOP giveaways to Polaris didn't stop jobs from leaving in 2026

Here's a timeline of 16 years of Polaris threats, tax giveaways, and job losses.

Start with the original threat to leave Western Wisconsin, in May 2010.

One of Polk County’s largest employers, Polaris announced last Thursday that it would shutter its Osceola plant and shift the jobs to its Roseau, Minn., and Spirit Lake, Iowa, facilities. The company also plans to open another manufacturing facility in the Monterrey/Saltillo area of northern Mexico.

The company has operated in Osceola since 1991 and currently employs around 560 people, though at times it has employed as many as 800.

The combined value of the company’s land and infrastructure is just under $4 million, according to county tax records.

But then Scott Walker was elected, and made Wisconsin “Open For Business”. And Polaris and Walker’s newly created Wisconsin Economic Development Corportation (WEDC) had this convenient announcement as Walker was facing recall in Spring 2012.

Polaris Industries Inc. plans to add 89 jobs in the western Wisconsin city of Osceola as it boosts production of Indian motorcycles.

Minnesota-based Polaris acquired Indian last year and produces the motorcycles in Spirit Lake, Iowa. Engines for both Indian and Victory motorcycles are made at the Osceola plant, which employs about 100.

The Wisconsin Economic Development Corporation said Polaris is eligible for $595,000 in tax credits. Gov. Scott Walker called it “another great jobs victory for Wisconsin” given that Polaris could have chosen Iowa or Minnesota.

The Osceola plant once had a workforce of more than 500. Polaris had planned to close it in 2010 as part of a plan to move some ATV production to Mexico, but decided to keep some workers on in Osceola for motorcycle engines.

Remember this guy's BS?

In Spring 2014, Walker was running again, this time for a second four-year term. And lookie here! Polaris had another jobs announcement and another WEDC writeoff!

In a move that will increase capacity by 40 percent, retain the 200 current positions, and add 60 more, Polaris Industries in Osceola will expand engine assembly operations to the tune of $1.75 million. This expansion will enable the production of additional Polaris ProStar engine platforms.

“Today’s announcement that Polaris has made a commitment to expand its operations at their Osceola facility is great news for workers, Osceola, and the surrounding communities,” Senator Sheila Harsdorf said. “Polaris' decision reflects the quality workforce in our area and efforts to improve our state's business climate. I commend local and state economic development leaders for their continued efforts in encouraging job growth.”

Although the 60 additional jobs are, at this point, only “projected,” Polaris does have an extra incentive to follow through. Should the 60 be created within three years, the Wisconsin Economic Development Corporation will provide up to $234,000 in tax credits to offset the expansion cost.

“Polaris is thrilled to be expanding our facilities in Osceola and bringing additional jobs to the community,” Bennett Morgan, company president and chief operating officer said. “We have a long history with the community, and are thankful to have the support and partnership of the state of Wisconsin as we continue to invest in our future here, and increase our ability to bring the latest innovations to our riders.”

In addition to the WEDC help, Polaris was able to take advantage of another WisGOP tax incentive, the Manufacturers and Agriculture Tax Credit (MAC), which was created in 2011, started phasing in for 2013, and lowered taxes for manufacturing businesses near zero by 2016.

The MAC offsets a significant share of Wisconsin income and franchise tax liability from manufacturing and agriculture activity. The credit is equal to 7.5% of a claimant's eligible qualified production activities income (QPAI). For 2023-24, the revenue reduction from the MAC is estimated at $495.6 million, which is 2.3% of overall general fund tax revenues collected in that year. …

The MAC is designed to provide tax relief in proportion to the amount of the claimant's manufacturing and agricultural property in its supply chain that is located in Wisconsin. For example, if half of the land and depreciable property a claimant owns or uses in manufacturing activities is located in Wisconsin, then the MAC would be equal to 7.5% of half of the claimant's eligible QPAI. The fact that the claimant owns other factories manufacturing different products in other states is not relevant to the computation of the credit. If 100% of the land and depreciable property in the supply chain is located in Wisconsin, the claimant would receive 100% of the credit (even if the manufacturer produces other products in Minnesota).

As discussed, the MAC is structured to reduce the rate of tax applied to QPAI. Assuming all of a corporation's income is derived from manufacturing and agriculture property located in Wisconsin, the MAC has the effect of reducing the statutory corporate tax rate of 7.9% to an effective rate of 0.4% on the corporation's taxable income (7.9% - 7.5% = 0.4%).

Here’s how the cost of the MAC has kept growing over the dozen years that has been measured so far, from just over $13 million in 2013 to more than $473 million by 2024.

Think we could have funded some schools, fixed some roads and facilities, and cut some property taxes with that money?

So in addition to hundreds of thousands of dollars from WEDC to add a few jobs, Polaris got a huge reduction in their state taxes over the last 15 years. And it still wasn’t enough, as we found out in January.

Powersports company Polaris has announced it plans to wind down the operations at its facility in Osceola, which specializes in manufacturing parts for Indian Motorcycle and its snowmobiles.

The move impacts roughly 200 Wisconsin workers at the facility who were told about the company's decision last week.

In a statement, Polaris said:

"It was important for our employees to hear the news from us, as well as to have ample notice of the decision. We plan to wind down operations in phases and do not anticipate job impacts until this summer. We plan to shift the remaining powertrain and component production to other Polaris manufacturing plants. We recognize the difficulty this change will mean in the lives of employees, and we are committed to supporting them through this transition. We will offer separation benefits and outplacement assistance to impacted employees, as well as support relocation opportunities."

The company said it is shifting the production of powertrains to its facility in Spirit Lake, Iowa, later this year.

And the plant’s closure was confirmed by a notice received by the Wisconsin Department of Workforce Development last week.

Polaris Inc. (the “Company” or “Polaris”) will be permanently closing its entire Osceola facility located at 108 Industrial Drive, Osceola, WI 54020 (the “Facility”). The closure will occur in phases, beginning in July of 2026 and ending on or about January 31, 2027. The Company expects that the employment of 189 employees working at the Facility will end by the time the Facility completely closes, with the first wave of approximately 26 employment losses occurring on July 27, 2026 (or during the 14-day period beginning on that date). The Company expects additional employment losses will take place in multiple phases leading to the January 31, 2027, closure of the Facility.

None of the affected employees are represented by a collective bargaining representative.

So the righties can’t even blame unions for this one, since the Polaris workers weren’t in one.

Despite all the giveaways to companies and to manufacturers in general since the Republicans took over the Legislature in 2010, it’s never enough for these businesses. Sure, manufacturing jobs recovered in Wisconsin after the Great Recession, but they also recovered in the rest of America. And even with the MAC fully in place, it didn’t stop the state from losing manufacturing jobs in Trump Trade War 1 in 2019 and pre-COVID 2020.

Nor has that giveaway stemmed the tide of Wisconsin’s job losses in manufacturing since the Oct 2022 post-COVID peak – now nearing 33,000.

This tale about Polaris is all the more reason why you should never trust these companies to be in it for the long haul when it comes to these jobs or "expansion" announcements. It's just another way to squeeze a few more dollars out without having to take on risk themselves. And maybe we should use those hundreds of millions of dollars in tax credits for actual investments that lead to real economic growth and an improved quality of life that encourages even more people to want to come to Wisconsin, make a good living, and start their own businesses.

After all, these corporations have had massive tax cuts at the Federal level for nearly a decade, and had their first round of tax cuts supercharged with the Big Bunch of Bollocks that got passed into law last year. How much more do we need to be giving these firms at the state and local level?

Rodriguez wants to work out budget with Legis Dems before taking office? Yeah, why wouldn't she?

With the Democratic primary for Governor in Wisconsin coming up in 3 ½ months, we’re finally starting to see some conflict and differentiations coming in. And there’s also a discussion about how to do a budget? Ooh, let me check this out!

During an April 16 event with the Rock County Democrats, [Lieutenant Governor Sara] Rodriguez said she committed to Senate Minority Leader Dianne Hesselbein and Assembly Minority Leader Greta Neubauer "that we are going to work together to get this budget across the finish line," in part, by negotiating before Rodriguez takes office.

"I have committed to having a budget done before I swear in, and we are going to do this − we are going to do our negotiations behind a curtain so that we are not doing a circular firing squad within the Democratic Party because we have got to make a difference in people's lives. We have got to be on the same page," Rodriguez said, according to audio of the event obtained by the Milwaukee Journal Sentinel.

"So those negotiations need to happen early and they need to happen quickly, and we need to put as much as we can into the budget because we are going to have purple district Democrats that are going to struggle a bit with some of the legislation that we want to get across.

The “negotiations behind a curtain” comment by Lt. Gov Rodriguez got jumped on by a couple of other Dems in the Guv primary.

"Latest reminder to everyone that sunshine is the best disinfectant," state Sen. Kelda Roys, who sits on the budget-writing committee, said in a post on X. "Backroom deals are NOT the way to deliver progress for Wisconsinites. Democracy delivers best when it’s transparent and inclusive of everyone in the state."…

Interesting comment, given that Sen. Roys just got endorsed by the statewide teacher’s union, and I didn’t recall WEAC going around the state having meetings with each candidate that were open to the public. Nor did they have an open vote by all its members, and instead had their board of directors make the call. But hey, sunshine.

Another Dem candidate put out his own “transparency in budgeting” response out today in response to the Lieutenant Governor’s comments.

[Democratic Guv candidate Joel] Brennan, who served as Department of Administration secretary under Gov. Tony Evers, said [April] 24 he would create a budget drafting process that begins with surveying every household in the state and public listening sessions, which already take place under Evers and the Legislature's finance committee.

"I helped build two budgets with Governor Evers. It's one of the hardest things a governor does. You're balancing the needs of every state agency and every community, all at once, with the clock ticking. I saw what works. I also saw what could be done better," Brennan said in a statement about Evers' budget process.

"Too many Wisconsin families feel like the budget happens to them, not for them. Deals get cut in back rooms, last-minute items get crammed in at midnight, and by the time anyone finds out what's in the budget, it's already law."….

The timing of Brennan's plan indirectly takes a shot at Rodriguez. In it, he says, "You don't get a good budget by hiding it from the people it's supposed to serve."

While I agree with Brennan’s sentiments about not doing shenanigans at night without discussion, he’s pulling an “apples and oranges” here. I’m enough of a dork/bureaucrat to know how the budget process goes, and those “last-minute items…crammed in at midnight” is something that happens after the budget is submitted by the Governor and is being debated in the Legislature. Also, it seems pretty ridiculous to survey 5.9 million Wisconsinites after you’ve run a long campaign where you are supposed to be telling voters what will happen should you end up being elected Governor.

What Rodriguez was describing when it comes to constructing a budget is generally more inclusive than what we’ve seen in recent years. And it would be a result of Dems running everything vs what we’ve had in the last 8 years, when it’s been Dem Gov Evers and a GOP Legislature. Let’s remind you of how things have gone since 2019, including the time that Joel Brennan was DOA Secretary.

Evers has generally worked within the Governor’s Office and the Department of Administration’s budget shop, and may have some conversations with WisGOPs on some topics along the way. But most of the budget gets worked on and written up internally by Evers and other officials, with a budget address in February where Evers would say “here’s the budget and here’s what I want out of it.”

And then the GOP Legislature would generally ignore what Evers and DOA had submitted and tear up most of it before any kind of debate could even begin. For example, here’s what the GOP-run Joint Finance Committee did around this time last year.

Republicans who run the Legislature are scheduled to remove hundreds of provisions from the governor’s budget with a single committee vote Thursday, covering everything from a state-funded child care subsidy to a new tax bracket for the wealthiest Wisconsinites.

It’s the same process Republicans have used every two years since Evers became governor, although the number of items removed from the budget this time is dramatic in scope. In all, more than 600 provisions would be deleted, leaving a shell of the budget Evers introduced to the public in February.

Many of the proposals Republicans plan to reject have been through the same process before. For example, Evers is again calling for an expansion of Medicaid in Wisconsin, which Republicans are poised to reject for the fourth budget in a row.

Two years ago, Evers made the creation of a new paid family leave program a centerpiece of his budget. GOP lawmakers voted it down on the first day of budget deliberations and are slated to do the same thing this year.

Rep. Mark Born, R-Beaver Dam, and Sen. Howard Marklein, R-Spring Green, who co-chair the Legislature’s Joint Finance Committee, issued a written statement saying the Thursday vote would remove “hundreds of reckless spending and policy items” from Evers’ budget.

That’s the way things go sometimes. Evers rightfully doesn’t back away from letting the public know what he wants to get done, and hopes to move public opinion toward his view and that of the Democrats (why give up on your priorities before you have to?). But the WisGOPs don’t want certain things, and because they have had the majority (legitimate or not), they have had the votes and the right to shoot things down.

But what if these guys aren't in charge next year?

What Rodriguez is talking about is a situation where Dems take control of the Legislature, and she wants the Dem leaders of the Legislature to be in agreement with the main ideas and changes of the budget as it is being worked out. This move would add input from the Assembly and Senate as the budget bill is being crafted, unlike what has been the case under Evers (which you should blame Robbin’ Vos and company for, not Evers).

When you run the show, the intent should be to put together something that can be passed into law, and include stuff that all Dems in the group find acceptable and important. Hopefully, that bill has real changes that get the state back on track and corrects the awfulness that has been part of the 16 year Age of Fitzwalkerstan.

Those changes have to be noticeable, and come fast. So I take Rodriguez’s statement as saying she doesn’t want to waste time between the November election and when she would take office in January. That’s what the “Behind the Curtain” meetings would be about – to handle concerns that may exist and improve the chances of success of what ultimately becomes the final product that gets back to her desk to be signed into law. Having the budget set up as she would take office also allows a better chance to get things into law sooner than later.

We know what Scott Walker and the WisGOPs did when they took power in 2011. They blasted through a bunch of new tax credits and giveaways in a special session in January, including the setup of the Wisconsin Economic Development Corporation (WEDC) to replace the Wisconsin Department of Commerce.

And then the bomb of the bill that became Act 10 was dropped in early February, with plans to jam the whole package through within a week of being released to the public! This was why Dems left the state and protestors occupied the Capitol, to slow the bill down and allow people to know what was in it, especially since Walker and WisGOP never ran on busting public sector unions, so the public hadn’t voted on the question.

If the Dems take power for 2027, while they may move fast, I doubt they’re going to try to sneak anything through like pre-written ALEC bills Walker and WisGOP tried to with Act 10. When the budget bill gets introduced by the next Governor, I’m sure there will be statewide hearings as well as hearings inside the Capitol in Madison no matter who is in charge, with plenty of opportunities to get improvements and changes put in.

And once she would give a budget address, why wouldn’t a Governor Rodriguez go out to all corners of the state to sell what’s in the budget she sends down, like any other Governor has done? If there’s some new concern that crops up, it’s not like there’s no way to fix it. It would likely be discussed and potentially modified in public by the Joint Finance Committee and the State Legislature like any other budget bill would be.

I will say that I’d be voting for Rodriguez in the primary if the election was today, so I may be showing some of that bias in this post (obviously, my support can change based on events in the next few months, as well as the likelihood of candidates to have a chance to win as August hits). But I think this is a non-troversy, and I’d much rather have a gubernatorial candidate that has a plan in place and bills ready to go when he/she takes the oath of office in January 2027 than I would someone who shrugs and says “I’m not sure about what I’d do or how I can get it done.”

In case you’re reading this and somehow connected with a Dem candidate for Governor (yes, I’m joking), let me tell you that not having a clue on how to get things done isn’t going to get you elected. Especially in a time when there are a lot of things to fix in this state, and Dem voters being fired up by the opportunity to do so. Just sayin’.

Higher gas prices didn't slow down consumers, drivers in March

We are starting to see the economic data from the first month after the bombs started falling in the Middle East. And it looks like American consumers haven’t really changed anything about their spending habits beyond having to spend more for gasoline, as Tuesday’s retail sales numbers didn’t show any consumer slowdown.

A spike in gas prices due to the Iran war, now in its eighth week, resulted in a hefty 1.7% gain in retail sales in March after a revised 0.7% increase in February, according to the Commerce Department’s report on Tuesday. The figure marked the fastest one-month increase in retail sales in more than three years.

The report marks the first read on spending to capture the effects of the Iran war.

Excluding gas prices, retail sales were up 0.6%, helped in part by government tax refunds and warm weather.

Business at gas stations rose 15.5% percent.

The 0.6% increase ex-gas sales is the key stat there, as non-energy inflation was at 0.2% for April, so that indicates real growth that was as good as we had in the first two months of 2026, and possibly better.

We also don’t see any changes in driving habits of Americans so far, as gas usage is not really any different than what we have seen in the last 3 years (I am leaving out April 2020's figures, since that was the peak of COVID shutdowns).

We also have yet to see gas availability be any different than it’s been in recent years. If anything, gas is more available in America now than it was 3 years ago.

But even though we have yet to see shortages of oil or gasoline in either the US or the rest of the world, those are likely to come soon if the blockades in the Strait of Hormuz continue past this month.

The vital energy channel has been largely closed to non-Iranian shipping since war began at the end of February, choking off hundreds of millions of barrels of supply. Consumer nations have been using up buffer inventories that they hold for emergencies to cope with the shortfall.

While international forecasters already acknowledge that conflict is sapping economic growth and oil demand, merchants including Vitol Group, Gunvor Group and Trafigura Group warned on Tuesday that the situation will get even worse if Hormuz doesn’t open up soon.

“We’ve borrowed supply,” Vitol Group Chief Executive Officer Russell Hardy said at the FT Commodities Global Summit in Lausanne, pointing to drawdowns of inventories from a variety of sources. “But you can’t do that forever. There are recessionary consequences from having to ration that demand.”

Benchmark oil futures rallied about 30% since the war began. They spiked to almost $120 a barrel in early March but have since subsided, trading near $95 on Tuesday amid tentative hopes the US and Iran can reach some kind of peace deal.

I wanted to look at what we’d expect at $90 oil. The last time we hit that mark was in September 2023, and gas prices in September and October 2023 were between $3.50 and $4 a gallon.

One difference is that September and October are the off-season for gasoline usage, as Summer ends and school years begin. In April 2026, we are still a month away from the Summer driving season and the typical increase in gas prices that goes along with that. And just because oil is back toward $90 a barrel instead of triple digits, don't expect gas prices will be falling back under $3 any time soon.

Energy observers are increasingly acknowledging a bottom line for motorists that prices at the pump are likely to be elevated for the foreseeable future — no matter what happens in the short term in the Strait of Hormuz and with another round of peace talks on tap this week.

“We will probably see those high prices sticky for longer,” CIBC Private Wealth senior energy trader Rebecca Babin told Yahoo Finance on Monday.....

Any easing of gas price pressures is likely to be slow and unsatisfying for drivers — as well as for Republicans facing midterm voters — in part because of a historical phenomenon that economists have taken to calling “rockets and feathers.”

As the Federal Reserve Bank of St. Louis explained in 2022, crude oil and refined gas prices don’t always move in tandem. They often shoot upward together (like a rocket), but when crude oil prices later ease, refined gasoline prices sometimes drift down at a much slower rate (like a falling feather).

The formal economic term for the phenomenon is “asymmetric pass-through,” and it stems from a variety of causes, including the lag between refiners buying crude oil and then selling their refined product and the need to preemptively protect bottom lines in moments of uncertainty.

Let's also account for good old fashioned profit-hoarding, as why wouldn't oil companies and gasoline refiners take advantage of a good thing for as long as possible (there are stockholders to satisfy, you know!). And I bet Trump/GOP aren't going to be looking too closely at any possible price-gouging, given that environmental group Climate Power estimates that fossil fuel interests spent $445 million in the 2024 election cycle in donations and lobbying, overwhelmingly in support of Trump and other Republicans.

It didn't cut into other areas of consumer spending for March, but let's see what happens now that we've been dealing with these higher gas prices for nearly 8 weeks, and planned spending and travel starts to be done with those increased costs in mind. Whether it's in wage growth falling below inflation, record-low consumer sentiment, or in the higher gas prices rippling over to make other products cost more, you can't think that Americans are going to continue like nothing has changed since February.

Fewer jobs in many areas of Wisconsin under Trump 2.0

If you'd checked out the annual benchmarking of jobs numbers in Feburary and combined it with March's release of the "gold standard" Quarterly Census of Employment and Wages (QCEW), you noticed that jobs growth numbers were revised down, and had gone in decline in much of America during 2025.

You'll notice that Wisconsin is among those states losing jobs, which means that we should have expected that the growth we were seeing reported in Wisconsin jobs numbers in 2025 was also likely to be revised away. And indeed, when the January benchamrked jobs data for Wisconsin was released earlier this month, it showed a sizable decline.

That's not good, and like the US jobs picture overall, it got worse in Wisconsin in February.

When you look at the trend over the recent years, you can see where the revisions really start to kick in around the start of Trump term 2.0, and the declines in February took away any gains that might have happened in January (although I strongly suspect they're just seasonal adjustments).

The revisions also show up in the sector data, especially in manufacturing, where the newly revised data shows that 2025 was a third straight year of notable job losses for Wisconsin manufacturing.

The new data also shows that jobs in the leisure and hospitality sector hit its post-COVID peak in October 2024, and has had a small decline in the 16 months measured since then.

One of the few sectors to see significant job growth in the last year in Wisconsin has been the construction sector, which not only continued the strength it had during the last 3 years of the Joe Biden presidency, but has kicked into higher gear since November, with over 5,000 jobs added in the following 3 months.

Wisconsin's growth in construction jobs continued last year even as the sector had US job growth as a whole go flat in 2025. Not sure why we're getting all this growth in our area for construction (I'd guess some of it is likely data centers, and some is likely the fact that Milwaukee is among the hottest housing markets in America), but worthy to see if that holds for the rest of 2026 as gas prices and other inflation are likely to make construction costs go higher.

It also makes me interested in seeing how Wisconsin's tax filing numbers look from the revenue side. We know that there was a decrease in income tax revenue of more than 30% for February 2026 vs February 2025, and while that reflects new tax cuts passed in the last state budget, are we also starting to see a decline in income tax withholdings if we have fewer Wisconsinites working? It seems like that's something we need to have answered before we proceed with any additional tax cuts, because a lack of revenues would make the projected $2.5 billion budget surplus from January go away quickly.

So if it seems like things have been slow in the Wisconsin jobs market and that we are largely stuck in place (if not outright declining), that's because it largely has been. And that was before the bombs started falling in Iran and gas prices neared $4 a gallon in our state. Not that we're alone among states that are struggling during Trump 2.0, but it does seem like things have to be changed from the trajectory they're on today if we want Wisconsin to get back to increasing jobs and improving our quality of life. Unless you're in construction, of course.

Inflation up, wages down for March, will continue in April. And the stock market doesn't care

We got INFLATION WATCH back in recent days, as the first reports from March are now coming in. And after a lot of concern about rising oil prices in the financial markets last month, now that we are seeing large price increases be reported, the markets are strangely unconcerned.

Start with the business side. While the Wall Street "experts" claimed Monday's report on the Producer Price Increase increase wasn't as much as expected, it’s still the 5th straight month that the PPI rose by at least 0.4%. And the 12-month change in PPI reached 4% for the first time under Trump 2.0.

In addition, March was only the first step in the increases in gas prices since the bombs started falling on Iran. As of April 15, AAA says that gasoline has gone up by 11%, and diesel up more than 13%. So it’s likely that April will show another increase in producer prices, and given that April 2025 had a decrease in PPI, the year-over-year change is likely to be well above 4% the next time we get that report.

That PPI report came after last week’s first look at prices at the consumer level.

The consumer price index increased a seasonally adjusted 0.9% for the month, putting the annual inflation rate at 3.3%, pushed by a 10.9% surge in energy costs. Both numbers were in line with the Dow Jones consensus. The annual rate was the highest since April 2024 and up from 2.4% in February.

However, excluding food and energy, core prices rose much less – just 0.2% for the month and 2.6% from a year ago, both 0.1 percentage point below forecast, indicating that underlying inflation was contained. There even were even pockets of outright price declines, as medical care, personal care, and used cars and trucks all fell during the month.

The Iran conflict was the story for the monthly inflation reading, as gasoline soared 21.2%, accounting for nearly three-quarters of the headline price increase, according to the BLS.

But even with slightly tamer core prices, a 2.6% increase is still higher than pre-COVID levels, and not much different than the 2.8% year-over-year increase we had in March 2025. It's also still elevated compared to the pre-COVID increases of 2% or below.

And this is before higher transportation prices for non-gasoline products can be passed ahead to consumers, so I wouldn't expect things to be better on the inflation front in April or coming months.

In addition, that 0.9% increase in consumer prices dwarfs the 0.2% increase in average hourly wages for March, meaning an inflation-adjusted loss of 0.6% for last month, and dropping real wage growth near 0% for the last year.

While year-over-year average hourly wages aren’t losing ground vs inflation like it was in 2021, 2022 and early 2023, I’ll also note that workers were still getting 4-5%+ wage increases over 12 months. And those raises were after a significant re-set of higher wages after the COVID pandemic broke out in early 2020.

Now we’re back to the 2018-2019 levels of 3.5% nominal wage growth, except inflation is much higher than we had in the late 2010s. That seems like the worst of both worlds to me.

So why is the S+P closing above 7,000 and markets are acting like things are back to some pre-war normal (which wasn’t so great to begin with)? And why are people pretending that everything is fine because of.....hopes for peace and AI boosterism? Here in the real world, prices are still going up from an already-higher level, wage growth isn’t keeping up with those higher prices, and there’s not much evidence that business will be able to pass on their higher costs to consumers later this year in order to maintain profits.

I don't get what's going on, and it's no wonder that we see record low consumer sentiment in a time when the markets want to live in a Bubble where the facts in the Real America don't have to seep in.

Supreme Taylor win is especially impressive outside of Milwaukee and Dane County

Obviously, a 20-point win in a statewide election in Wisconsin is near-unprecedented over the last couple of decades. So let's look at a few facts and figures from Chris Taylor's epic blowout of Maria Lazar in last week's Wisconsin Supreme Court race.

First, Taylor nearly doubled up the blowout margins that Susan Crawford put up in April 2025's Supreme Court election. And not surprisingly, that boost in margin was widespread throughout the state, as shown by J. Miles Coleman of the Center for Politics of the University of Virginia. In addition to comparisons to last year's high-turnout race, Coleman also looked at the result vs another double-digit win in Supreme Court race with similar statewide vote totals, which was Jill Karofsky's win over Dan Keklly in 2020.

Coleman goes on to point out that the Dem-backed candidate continued to make gains in the Milwaukee suburbs, which used to give massive margins to Republican candidates until the Trump era.

Using 2020 as our baseline year, 3 of the 5 counties that swung most to Taylor from Karofsky were large urban or suburban counties in the Milwaukee area. The first was Milwaukee County itself, followed by Ozaukee while Waukesha came in fourth place. Ozaukee is the least Republican of the so-called “WOW” counties, the traditionally very Republican suburban counties located north and west of Milwaukee. Each of those three counties, Milwaukee, Waukesha, and Ozaukee, got at least 15 percentage points more “liberal” over the past 6 years. In absolute terms, it was notable that Ozaukee County finally changed sides this year after Democratic-aligned candidates have been getting closer to winning it, and that Waukesha County, which would reliably give Republicans and conservative candidates three-to-one margins before the Trump era, only backed Lazar by a 54%-46% margin. That continued suburban movement stands out as the clearest source of Democrats’ expanding coalition.

In fact, Taylor became the first Dem-supported candidate to win Ozaukee County for the first time since LBJ's landslide in 1964. And it continued the steady gains Dems have been making in the WOW Counties over the last 7 years of Supreme Court races.

As Coleman also mentions, the Dems kept increasing vote share in Milwaukee County on Tuesday as well. But it's worth adding that Taylor's gains were in the suburbs and not the City, as Taylor's 83.9% share wasn't much different than Crawford's 83.7% in April 2025, or Protasiewicz's 81.7% in April 2023. In addition, while Taylor got 2% more in Dane County than Dem-backed candidates in 2020, 2023, and 2025, it looks like there's a ceiling in Dane County in the low-80s.

But notice the one blip downward in Dane and the City of Milwaukee in the November 2024 election. That reflects the Trump campaign's gains among voters of color and younger, college-aged bros voters. And those gains have not held since then, especially on the UW-Madison campus. While turnout was down significantly on campus compared to November 2024, and Taylor had slightly less than half the votes Kamala Harris got in campus-area wards, it's nowhere near the falloff that has come for the GOP-supported candidates, as more than 6 out 7 Trump voters went away for Republicans in April 2026.

In addition to those deteriorations, an even worse sign for Republicans is that Taylor made major gains outstate, and outright won many areas that have voted GOP in the past. This includes the higher-population BOW Counties in the Fox Valley (Brown, Outagamie and Winnebago) as well as the combined total of Racine and Kenosha Counties in the southeast corner of the state. Both of those areas went for Trump in 2024, and Harris lost big in the aggregate over the other 63 counties of the state. Taylor won all of these areas of the state last week, including 58% in the BOW Counties.

Sure, I understand that April electorates aren't November ones, as more than twice as many Wisconsinites turned out for the 2024 presidential election compared to the lower-key Supreme Court blowout in April 2026. But midterm turnouts also aren't usually as high as we see in a presidential election, and that was certainly the case in 2022, despite hotly contested US Senate and Governor's races.

Total votes cast, Wisconsin
2022 US Senate 2,652,477
2024 Presidential 3,422,918
2026 Supreme Court (est) 1,506,442

If Trump and Johnson won those 2022 and 2024 races by approximately 1%, while Taylor won by more than 20% in 2026, I think it's not unreasonable to think that current conditions might be directly in between these areas for November 2026. That would be a shift to Dems of about 10 points compared to 2024, which likely means Dem trifecta at the state level, Bryan Steil in major trouble for Congressional District 1 (which Trump won by 4.5% in 2024), and Derrick Van Orden is likely to get Cooked in Distrrict 3 (he only beat Cooke by 2.8% in 2024). And it makes some other GOP districts within reach, given that the GOP will be running slugs like Glenn Grothman, Tony Wied, and whoever gets nominated to replace Tom Tiffany up North.

Long way between now and then, of course. But based on what we saw last Tuesday, you'd sure rather be the Dems than the Republicans in Wisconsin. Especially given how badly the GOP slipped in the parts of the state that they usually do best in.