Saturday, July 31, 2021

nASS, (mo)Ron, and other WisGOP pro-COVID idiocy

I know Charlie Sykes is a grifting scumbag who can never be forgiven for his part in messing up this state. But this is quite the accurate description.

A Republican-controlled committee plans to block the University of Wisconsin from instituting COVID-19 testing, masking and vaccination protocols on campuses across the state, a move that comes as health officials sound warnings about the rapidly spreading, highly contagious delta variant.

State Sen. Steve Nass said Wednesday that he would be moving to require the university to get approval from the Legislature before enacting any virus-related regulations. Nass co-chairs the Legislature’s GOP-controlled rules committee, which Nass said will vote remotely Tuesday to block UW virus protocols without a public hearing.

UW System interim President Tommy Thompson, a former Republican governor and U.S. Department of Health Services secretary, did not directly address Nass’ plans in a statement Thursday. However, he said “the biggest threat to in-person classes this fall would be actions that strip the UW System of the tools it has so successfully utilized to date to address outbreaks and reduce the spread of COVID-19.”
And in case you missed a key nugget in the second paragraph, let me give it to you again.

Serious question - what happens if the UW tells nASS and Neylon and other the GOPs on that Committewe to shove their pro-COVID idiocy up their backsides? What are they and the rest of the Legislative GOPs going to do about it? Heck, what CAN they do about it?

They can't cut the UW's budget - it's already signed and in place for the next 2 years, and state tax dollars only account for 18% of their budget anyway. Are they going to waste tax dollars on a stupid lawsuit that will likely fail anyway, and keep this political loser in the headlines for longer?

If I'm Tommy Thompson, I tell these yokels to "try and stop us from keeping our campuses safe", and watch them stamp their feet and sputter like the small-time dopes that they are.

Speaking of pro-COVID WisGOP dopes.

Wow. I think it would be good business practice to require staff to be vaccinated, especially in high-exposure jobs. But I'm not even at a government-imposed vaccine MANDATE, RoJo. That's quite the big government step for you. :P

What a (mo)Ron. What type of dead-ender supports this Russian (mis)information agent at this point? And can all you anti-mask dimwits travel to some other land and stop screwing up my state. NOW?

Strong Summer spending through June also shows the changes of 2021

Following up on the GDP report from earlier in the week, June's income and spending figures came out, which reiterated that American consumers got out and spent more as Q2 ended, but what they were buying was costing more.
Americans spent more than expected in June as they got outdoors and traveled more, but they’re paying higher prices.

The Commerce Department said Friday consumer spending rebounded 1% last month from a 0.1% dip in May. Household expenditures accounts for two-thirds of U.S. economic activity, and that robust spending helped boost economic growth 6.5% in the latest quarter....

But as demand outpaces supply, inflation is heating up. The core personal consumption expenditures index shot up at an annual rate of 3.5%. It’s speeding up faster than the Federal Reserve’s target of 2%. But Fed Chair Jerome Powell insists inflation is temporary.
Within those June spending figures, we also got more data indicating consumers were spending their dollars to go out and get services, particularly from bars, restaurants and hotels.

But at the same time, Americans moved away from buying goods after getting a lot of them in the first year of the COVID World. And that's especially true for automobiles, which have had significant part shortages and recent plant shutdowns in America.

On the income side, we also saw evidence of a return to a post-COVID normal within a small 0.1% increase for June. Income growth has gone down in some areas, as most Americans have already received their 2021 stimulus checks, and fewer people are receiving enhanced unemployment checks (both due to fewer claims overall, and due to some red states ending the benefit).

But the correlated improvement in the jobs market has made up for it, and along with higher wages in many sectors, it means that post-COVID wage growth has finally exceeded the jump in unemployment benefits.

Let's see if the resurgence of COVID starts to slow down the increased spending and wage growth. My guess is that it won't show up in July's numbers (especially in these parts), but if we don't get a handle on the Delta variant, I have to wonder how common a scene like this will be come September.

Thursday, July 29, 2021

If 6.5% GDP is disappointing, sign me up! Especially when you dig deeper

As America opened up, we knew the economy grew in Q2, and by quite a bit. But we didn’t know how much until the Commerce Department released the GDP number today.
The U.S. economy rose at a disappointing rate in the second quarter in a sign that the U.S. has escaped the shackles of the Covid-19 pandemic but still has more work to do, the Commerce Department reported Thursday.

Gross domestic product, a measure of all goods and services produced during the April-to-June period, accelerated 6.5% on an annualized basis. That was slightly better than the 6.3% gain in the first quarter, which was revised down narrowly.

While that would have been strong prior to the pandemic, the gain was considerably less than the 8.4% Dow Jones estimate.
But you dig into the actual report, and you see that the main reason the number disappointed wasn’t due to a lack of activity, but because of higher prices.
Current-dollar GDP increased 13.0 percent at an annual rate, or $684.4 billion, in the second quarter to a level of $22.72 trillion. In the first quarter, current-dollar GDP increased 10.9 percent, or $560.6 billion (revised, tables 1 and 3). More information on the source data that underlie the estimates is available in the Key Source Data and Assumptions file on BEA's website.

The price index for gross domestic purchases increased 5.7 percent in the second quarter, compared with an increase of 3.9 percent (revised) in the first quarter (table 4). The PCE price index increased 6.4 percent, compared with an increase of 3.8 percent (revised). Excluding food and energy prices, the PCE price index increased 6.1 percent, compared with an increase of 2.7 percent (revised).
13% nominal GDP growth is a lot of extra dollars going out. And increasingly confident (and vaccinated) consumers were a big part of that growth, with an 11.8% increase in Q2 after a large 11.4% increase in Q1. Which helps explain why so many stores and restaurants are struggling to find sufficient staff after laying off large numbers of staff in 2020.

Even though services growth accounted for 60% of that strong consumption growth in Q2, that sector is still below its 2019 peak. By comparison, spending on goods never fell much when COVID first broke out, and is well above 2019 levels today.

Another item to note in this GDP report is that construction of buildings had a sizable (seasonally-adjusted decline). This continued a decline in building of office buildings and other non-residential structures in the COVID World, but residential building also went down in Q2.

I also note that there were declines in net inventories and (surprisingly) federal government consumption and contracts, which also cut into GDP growth and made it "disappoint" at a still-strong 6.5%. I don't see either of those trends continuing in the 2nd half of 2021, especially if the infrastructure package goes through. So while it wasn't the massive boom number that some might have thought, I think it's still a strong Q2 GDP report.

The groundwork is still in place for things to keep rolling, unless this COVID resurgence starts to cut into people's consumption habits, and if there is no infrastructure bill that continues to spur demand. In other words - things should still be good for Q3, as long as COVIDIOT Republicans and other idiots in DC don't screw it up.

Wednesday, July 28, 2021

Wisconsin also seeing COVID spike, especially in the new Title Town

Both Monday and Tuesday have seen nearly 1,000 new COVID cases be reported in Wisconsin, barely 3 weeks after the 7-day averages were down below 80 new cases. That's a very bad breakout, and indicates the virus is seeing exponential growth which needs to be tamped down now.

Wednesday usually sees an important data release from the Wisconsin Department of Health Services which goes over how many new cases are being reported in each county of the state, and the trend of growth or decline. As you'd imagine, cases have gone up by a lot in the last 14 days, and it's hitting many corners of the state.

And that farthest-right dot on the "growing" category? Milwaukee County, which has had nearly 200 cases per 100,000 in the last 2 weeks. And the counties around Milwaukee are also seeing large amounts of new cases, with rates similar to or above the state rate of 99.7.

New COVID cases per 100,000 people, July 14-27
Milwaukee Co. 198.7
Waukesha Co. 140.2
Ozaukee Co. 123.4
Racine Co. 111.2
Washington Co. 97.4

Huh, was there some kind of event going on in the Milwaukee area recently that had a bunch of people packed in without masks?

I'm not going to complain about the first Bucks title in 50 years in any way. But large masses of unmasked people traveling into a City where vax rates are lagging is a pretty obvious recipe for a COVID breakout, even if you are mitigating it by being outside. (In case you're asking, highly-vaxxed and mask=-recommending Dane County is at 83.6, but that's triple what it was 2 weeks ago).

I don't think that there's any kind of appetite for shutdowns or even a mask mandate in most places, unless deaths and hospitalizations reach the point where ICUs are full and deaths are at 20-30 a day instead of the 1 a day we have today. But large, unmasked gatherings among people from many different communities are going to carry risks with them, and Wisconsin is going to have plenty of those in the coming weeks. Including the latest facility that's reopening this week.

I'm not changing my event-attending habits yet (hey, I did my job in distancing and vaxxing). But I'm definitely going to the mask more when I'm inside and/or crowded in, at least for now. And I do wonder if the latest COVID breakout keeps some Wisconsinites away from the large attractions that late July and August typically has in our state.

Tuesday, July 27, 2021

4 years after the Fox-con started, they're still giving empty promises

A special 4th anniversary hit on Monday in Wisconsin.

If you're new here, I knew this was an expensive fraud from Day 1, although my prediction of a backdoor to toll roads was wrong, because we ended up paying $252 million in state tax dollars to speed up the I-94 upgrade (although I have little doubt Walker would have tried to install tolls had this state been dumb enough to keep him in office).

In fairness, anyone with an IQ above 80 that had done 5 minutes of research would have known the same, but it's telling to see the GOP trolls in the comments try to claim this was going to be a great victory and had guaranteed Walker's re-election. Which was always the real motivation behind the Fox-con - it was ALWAYS a desperation move to try to make up an image of Walker and Trump as "job creators" before the 2018 election.

4 years later, Foxconn is somewhere between a punchline and an eye-roll, and a lesson to the rest of America of how not to do economic development. But maybe there's a glimmer for the leveled miles of land in Robbin' Vos' district Racine County, the Milwaukee Journal-Sentinel had news earlier this month about how some kind of manufacturing might finally be coming from the Foxconn site.
Foxconn Technology Group and Fisker Inc., a California car maker, are talking with the Wisconsin Economic Development Corp. about building electric vehicles in the state, Foxconn confirmed Thursday.

"As part of the site selection process, Foxconn and Fisker have engaged with the Wisconsin Economic Development Corporation to discuss plans for electric vehicle manufacturing," Foxconn and Fisker said in a statement. "Foxconn and Fisker look forward to discussions with the WEDC."
The Verge followed up on that report, continuing its strong summary of the Fox-con, and is rightly skeptical of Foxconn ever making anything out of these plans.
The Taiwanese conglomerate said Friday [July 9] that it has started talks to the Wisconsin Economic Development Corporation (WEDC) about making EVs with California startup Fisker Inc. at the mostly empty site it owns in the state. This is despite chairman Young Liu saying in March that he would decide between building EVs in Mexico or Wisconsin by July 1st, and Foxconn and the WEDC agreeing to a far smaller tax subsidy package in April that reflected the failure of the LCD project.

Why did Foxconn take a new deal with the WEDC in April when it knew it had EV ambitions in March, only to announce another negotiation with the state in July? Well, because that’s how things go with Foxconn in Wisconsin.

…Foxconn and Fisker Inc. first announced their partnership in February and have since shared that they plan to build a low-cost electric sedan, currently called Project PEAR, which stands for “Personal Electric Automotive Revolution.” The two companies signed a framework agreement in May.
A framework agreement that probably isn’t worth the paper it was signed on.

(Side note, how is Foxconn coming along on the 10,000 ventilators it said it was going to make last year? Wait, you’re telling me it didn’t work out? Bummer).

Bruce Murphy of Urban Milwaukee has called out Foxconn early and often over the last 4 years, and he is warning against the possibility of the state of Wisconsin being suckered into giving more money to either of these sketchy firms.
The history of the two companies raises questions. Fisker has struggled since 2007 to manufacture electric vehicles. In 2013, the company laid off 75 percent of its workforce and filed for bankruptcy. And Foxconn is again making predictions that don’t come true. The company had said it would decide whether to manufacture the cars in Mexico or Wisconsin by July 1, which hasn’t happened. It’s also not clear whether Foxconn would be be manufacturing cars or components. Young-Way suggested the goal was to compete with companies such as Magna. If so he appears to have fallen behind. Fisker recently announced that Magna will begin manufacturing of the battery-electric Fisker Ocean SUV on Nov. 17, 2022 at Magna’s facility in Graz, Austria. The vehicle will be sold in the U.S. at a base price of $37,499.

Meanwhile, Fisker Chief Executive Henrik Fisker added more uncertainty to its deal with Foxconn, saying four states are under consideration for where to manufacture the cars — without revealing the names of the other three states. And at this point, after four years of failed promises by Foxconn, any state would be wary of asking taxpayers to support a deal with the company. Fisker’s claim that other states are interested seems strategic, to pressure the administration of Gov. Tony Evers to give Foxconn yet another subsidy of some kind.

Yet the two companies have said the production of these cars wouldn’t start until the end of 2023, more than six-and-a-half years after the original Foxconn deal with Wisconsin was announced. That’s a lifetime in the fast-paced world of electric car manufacturing, that is pitting Tesla, GM and many other car makers against each other, and could undermine the economic basis for the Foxconn project by then, as previously happened with LCD manufacturing.
And how coincidental that Foxconn/Fisker is claiming they wouldn’t start anything until 2023 – after the elections for Governor and the State Legislature, among other offices. Funny that.

It's sort of “good things are coming, just you wait” BS that we’ve seen throughout the last 4 years of Foxconn Failure, and I think we can safely ignore these folks and stop throwing money at these grifters.

Monday, July 26, 2021

Wisconsin COVID situation isn't like the South. But 2,200 cases means more work to be done

While Wisconsin hasn't had COVID spikes anywhere near what we're seeing in the Southern half of the US, we're also seeing cases grow. After weekly cases bottomed below 500 at the end of June, we ended up with more than 2,200 new cases over the last week, more than double the amount reported in the previous week.

Certainly time to at least raise your awareness, as this thing needs to be leveled off sooner than later. And while I'm as thrilled as anyone about the Bucks winning their first title in 50 years and the unity and excitement shown in the streets, I can't think the new COVID cases in the state will decline after scenes like this in a City where many neighborhoods have vaccination rates well below 50%.

On a positive note, we have not seen deaths rise in Wisconsin, staying at rates of around 1 a day for the last 6 weeks.

That being said, we know from experience that the trend in deaths lag the trend in cases by about 4 weeks. So we need to wait until early August to see if vaccinations are truly limiting the seriousness of infections, and the amount of hospitalizations or deaths. I think it will, but too early to tell for now.

On the vaccination front, we are still far below where we were this Winter and Spring. But I will note that vaccinations have increased in each of the last two weeks, and perhaps the news of increased cases in Wisconsin will spark more people into finally getting the vax.

We also are seeing a couple of vaccine milestones hit in the state. Dane County just became the first one in Wisconsin to have 70% of its population receive at least one shot, and within a couple of days, the 3 millionth Wisconsinite will have received the vaccine. These are good signs, and I hope other counties work to reach the strong levels of vaccinations that we see in the Madison area before school starts in 6 weeks.

But there's still work to be done, and with cases rising in Wisconsin, the need to stamp down COVID with vaccinations and smart behavior is needed more than ever. It'll be Fall before you know it, and we can't forget how things got out of hand last year when we didn't have the vax.

We get dueling special sessions tomorrow! And the return of the WMC List of Shame

This speaks volumes, both on the regular and subtweet levels.

Yes, funny how WMC would know about these plans before the Dem Leader in the State Assembly, isn’t it?

Not only is ending the unemployment benefits a stupid move for WisGOPs at this point, given that the enhanced unemployment benefits end in 6 weeks anyway, continuing unemployment claims have consistently fallen in the state in the months that the $300/week add-on has been in place (up until the week of July 10, anyway). That wouldn't be happening if people weren't looking for work due to the higher unemployment benefits.

In addition, the number of people in the state’s labor force has continued to recover, rising by more than 41,000 in 2021, and by 29,000 in the last 3 months.

So the WMC arguments (as normal) are shown to be bullshit when held up to actual data and results.

Interestingly, the Wisconsin Examiner notes that WMC’s original tweet only talked about the $300/week add-on for unemployment benefits, but WMC replaced that tweet with the mention of “enhanced” benefits. Does that mean they also want to cut off the extended PEUC program, which would prevent Wisconsinites from getting more than 26 weeks of unemployment? Guess we’ll see if/when the Republicans release tomorrow's agenda.

Within hours of the WMC leak/tweet, Evers responded by calling for a separate special session, which would also begin on Tuesday.
In addition to the more than $100 million for public schools announced at the time of signing the budget, the governor used his broad veto authority to issue 50 partial vetoes to improve the budget document, leaving additional state resources readily available to make investments in areas where Republicans failed to make meaningful investments through the budget, including K-12 education. Gov. Evers used his veto pen to stop a $550 million transfer to the budget stabilization fund—which already holds a record high balance to ensure state resources would be readily available to invest in our kids and our schools.

Using those state funds already available through the governor's vetoes, Gov. Evers is calling the Legislature into a special session to take up his proposal, LRB-4297, which is available here, that would invest more than $500 million in Wisconsin's kids, schools, and students.

· $440 million for K-12 schools
· $240 million for increasing per-pupil aid by $146 per student
· $200 million into special education aids
· $110 million for higher education
· $90 million for the University of Wisconsin System
· $20 million for the Wisconsin Technical College System
At least when Evers and Dems do a special session for show, it’s for something most people are asking for.

And unlike the fake concern from WMC/WisGOP about enhanced unemployment benefits, investing in education deals with a real issue in our state. It also would improve our economy and our competitiveness, and make people actually want to come here and stay here, which cutting unemployment benefits won't do. Then again, when have the greedheads at WMC and their WisGOP puppets ever wanted those things?

Guess we gotta bring back the LIST OF SHAME, based on who makes up the WMC Board of Directors.
Wisconsin Manufacturers & Commerce (WMC) – the state’s largest and most influential business association – elected Kwik Trip Vice President Steve Loehr as Chairman of its Board of Directors on Thursday. Loehr will serve a two-year term and has been an active member of the Board since 2015….

Waupaca Foundry, Inc. President, COO & CEO Mike Nikolai was also elected to a two-year term as Vice Chairman, while Teel Plastics, Inc. Chairman & CEO Jay Smith assumed the role of Immediate Past Chairman. Reelected to their posts as officers of the WMC Board are Gina Peter, an Executive Vice President at Wells Fargo Bank and Barbara Nick, President & CEO of Dairyland Power Cooperative, who will serve as Treasurer and Secretary respectively.
Choose your spending accordingly, folks.

Sunday, July 25, 2021

Unemployment claims up, because of car chips and the 4th of July

These were not the jobless figures I was planning to see on Thursday morning.
Initial filings for unemployment insurance totaled 419,000 for the week ended July 17, well above the 350,000 Dow Jones estimate and more than the upwardly revised 368,000 from the previous period, the Labor Department reported Thursday… The jobless total was the highest weekly count since May 15 and came amid expectations that the jobs picture will improve markedly as enhanced unemployment benefits end and companies get more aggressive about filling vacant positions.
But there could be a couple of simple reasons for the surprise increase. The first involves the week ending July 10 as being the one with the 4th of July Holiday (which it usually isn't), so that could have lessened that week while raising the following week. On a non-seasonally adjusted basis, new unemployment claims only rose by less than 14,500 compared to the 51,000 on a seasonally adjusted basis.

The other reason has to do with disruptions in the auto industry, with Ford being among multiple automakers scheduling significant shutdowns this month.
Ford vehicle production will once again take a major hit in July as the automaker plans to idle a number of its plants over the next few weeks, according to Automotive News. That list starts with the Ford Chicago Assembly Plant, which will be down the weeks of July 5th, 12th, 19th, and 26th, with a two shift schedule planned for the week of August 2nd.

Next up is the Ford Dearborn Truck Plant, which will run a two shift schedule for the weeks of July 12th, 19th, and 26th. The Ford Kansas City Assembly Plant will be down the weeks of July 12th and 19th on the Ford F-150 side, and down the week of July 19th on the Ford Transit side. The Ford Flat Rock Assembly Plant will be also down the weeks of July 12th and 19th.

The Ford Hermosillo Assembly Plant will be running one of two shifts the weeks of July 12th and 19th, while the Ford Kentucky Truck Plant will be down the week of July 12th and on a two shift schedule the weeks of July 19th, 26th, and August 2nd. The Ford Louisville Assembly Plant will operate on a reduced schedule the week of July 19th.

The Ford Oakville, [Ontario] Assembly Plant will only build the Lincoln Nautilus the weeks of July 19th, 26th, and August 2nd. Finally, the Ford Michigan Assembly Plant will be down weeks of July 5th and 26th, but that closure is due to an unrelated parts shortage that’s not chip-related.

And the jump in jobless claims in this week’s report reflects the July 12th shutdowns in Chicago, Michigan, Kansas City (Missouri side), and Kentucky. The 4 states with those plants had 31,000 additional new claims last week, while the rest of the country saw claims go down.

That doesn't mean we should entirely shrug off that sitiuation, as given the schedule laid out in that story, there will likely be more layoffs in the auto business in the next couple of jobs reports due to these chip issues, and it might lead to a sizable drop in auto manufacturing employment in the July jobs report. But for now, it seems to be a short-term furlough that isn’t going to cause much of a long-term headwind for the overall economy, and it should be restored for the reports in the month following.

On a wider scale, CNBC noted that continuing claims and other unemployment rolls continue to fall in Summer 2021.
On the positive side, continuing claims, which run a week behind the headline number, declined by 29,000 to 3.24 million, a fresh pandemic low. The total was last lower on March 14, 2020, just after the Covid-19 pandemic declaration and as governments across the U.S. ordered businesses to close, sending more than 22 million to the unemployment line.

The total of those receiving benefits under all government programs also declined, falling by more than 1.2 million to 12.57 million. A year ago, nearly 33 million people were collecting benefits.
Extended claims are also down significantly in recent weeks, although some of that is likely due to (red) states cutting workers off.

Now if the auto chip shortage is a longer-lasting item that hits the industry for several months, we have a real problem and you can see the economy slowing. But for now, I’ll need to see more than 1 week of increased unemployment claims or 1 middling jobs report to think that the improvement in the labor market that we saw in the 1st half of 2021 has leveled off.

Thursday, July 22, 2021

Hey WisGOP, don't want to be forced add more K-12 spending? Just expand Medicaid!

We already know that the rules involved in the federal stimulus bill that was passed this March had a strong effect on the state's budget deliberations later on. But those rules are still in effect throughout the 2 years of the budget, and it'll continue to be a factor as we deliberate policies going forward.
For Wisconsin schools to retain about $2.5 billion in federal aid, the state must keep education spending at the rate it has maintained in recent years. That means about 35% of the state’s overall spending must go toward K-12 and about 9% toward higher education, according to the fiscal bureau.

The budget approved this month met those requirements, keeping the federal aid intact.

The calculation is made on a rolling basis, so the state will need to put more toward education with future spending measures, the fiscal bureau concluded in a memo released Tuesday.

If an additional $100 million were spent, another $63.2 million would need to go toward K-12 and another $15.8 million toward higher education.

That would result in $179 million in more spending — 56% of which would go toward the new project, 35% toward K-12 and 9% toward higher education.
You know what would stop these “double payments” from happening? Expanding BadgerCare to reduce the amount of state tax dollars going to Medicaid. With fewer state dollars being spent, this increases the ability for the state to fund other items without having to raise K-12 spending to avoid losing those stimulus dollars.

To go on top of that, Jon Peacock of Kids Forward has a reminder that the “regular” reasons for expanding BadgerCare are still good. In addition to the savings to state taxpayers and the added availability of Medicaid as an option for tens of thousands of Wisconsinites, Peacock says many low-income working Wisconsinites can’t get assistance that would help them pay for policies that they are able to acquire on the Obamacare exchanges.
Under the terms of the ACA, a worker and their spouse cannot purchase a subsidized Marketplace plan if the worker could buy an employer plan with premiums that are less than 9.83% of the household’s income. Even in the not-uncommon cases when a plan has very high copays and deductibles, or when a family plan that would include the worker’s spouse has premiums far above 9.83% of their income, they are still ineligible for help from the Marketplace.

Imagine having a chronic health condition and a job that pays just $8 or $9 per hour. Your employer offers health insurance, but as we know, there are more costs to consider: the plan requires you to pay hundreds or even thousands to cover your medication and treatment, on top of premiums that cost 9.5% of your meager income. When all is paid, you don’t have much left to cover the cost of rent, food, utilities and transportation.

Your employer plan isn’t an affordable option, but it disqualifies you from being eligible for a subsidized plan through the ACA Marketplace. Expanding BadgerCare would keep people in this situation from falling through the cracks by ensuring they can access comprehensive health insurance with little or no out-of-pocket costs.
Which sort of puts away the GOP line of “well, you can always get a policy on the Obamacare exchanges.

So let’s see – more Wisconsinites insured, state taxpayer dollars saved and budget stabilized after stimulus funds wear off in 2 years, and no need to worry about losing billions in stimulus aid for K-12 schools every time we want to fund any other program. Is there any real reason WisGOP wouldn’t expand BadgerCare at this point?

Ah, Koch addiction. Got it.

Wednesday, July 21, 2021

Evers may be getting less stimulus funds that we thought, but lots is still in use

The Legislative Fiscal Bureau gave an update today as to how Gov Evers’ Administration has used the stimulus funds (officially known as the State Fiscal Recovery Fund (SFRF)), and how much more they will get.

What the LFB found is that Wisconsin will get less money than expected, because its unemployment is lower than most other states.
To implement this provision, the U.S. Treasury Department used Local Area Unemployment Statistics (LAUS) data from the Bureau of Labor Statistics (BLS). Treasury was also required to make pro rata adjustments to the final allocations, pursuant to the requirement in ARPA that no state or the District of Columbia would receive less from the SFRF than it did from the Coronavirus Relief Fund established under the CARES Act. Based on the LAUS data, Wisconsin will receive approximately $2,033.2 million in SFRF funding based on its share of seasonally-adjusted unemployed individuals. Along with the $500 million equal share payment, the state will receive a total of $2,533.2 million from the SFRF. Wisconsin's total SFRF allocation declined compared to earlier estimates due to the state's seasonally adjusted unemployed individuals making up a smaller share of the national total of those individuals compared to earlier estimates.

In order to receive its SFRF allocation, the state was required to submit a certification to the Department of Treasury that the funds were required and that the state would use the funds in accordance with the provisions of the Act. Treasury has indicated that it will provide payments from the SFRF in two equal payments to all states, unless the state's unemployment rate is greater than 2.0% above its pre-pandemic level at the time of the certification. Wisconsin therefore received half of its SFRF allocation in May, 2021, and will receive the remainder in 2022. If Treasury determines that any funds are subject to recoupment in 2022, due to improper use of the funds, the state's 2022 payment will be reduced by the amount that is subject to recoupment.
The LFB adds that local governments are still going to get similar amounts to what was expected back when the stimulus was signed in March.

The Fiscal Bureau also gave an update on how much of this year’s $1.265 billion that the Evers’ Admin has handed out, and where it has gone. As you can see, almost $900 million has been designated, leaving less than $375 million to be determined out of the 2021 payments.

That last item reveals where the $100 million that Evers plans to add to Wisconsin schools would be coming from. It’s COVID relief funds from 2020, and then Evers plans to use the 2021 money to pay for other needs. But there are still details to determined, including how much each district would get.
In his message of the 2021-23 budget (2021 Act 58), the Governor announced that he would invest "more than $100 million in federal funds into our kids and our public schools." According to the administration, $100.0 million of the state's SFRF allocation has been transferred to cover costs previously covered by the CRF allocation received by the state in April, 2020. This allocation is being made to free up an equivalent amount of CRF funding in order to make $100.0 million in CRF funding available for school districts in the state. However, the actual CRF allocations that will now be funded with SFRF monies are not known at this time. In addition, the administration has not yet indicated how these funds will be distributed to school districts.

Treasury guidance indicates that CRF monies may be transferred to school districts, and that school districts may use these funds to cover costs associated with either providing distance learning or re-opening in-person facilities. Treasury indicates that as an administrative convenience, expenses of up to $500 per pupil will be presumed to be eligible expenditures. As a result, school districts will not be required to document the specific uses of funds up to that amount. On a statewide basis, $500 per pupil would total an estimated $410.0 million in 2021-22.
Well, at least they can use it for however they want, which is a nice sign.

It originally seemed like two separate payments would be a drawback on the billions in state aid, but it might actually work out for the better. It buys time for Evers and others at the state level to help smooth out the disruptions that the post-COVID world will have, and fill in gaps that may still exist due to the WisGOP Legislature's (in)actions on the state budget. On the political side, it allows for Evers to keep parceling out funds closer to the 2022 elections, when the average voter may be more likely to remember how this targeted aid made a difference, and kept things afloat in a still-challenging time.

Monday, July 19, 2021

GOPs want infrastructure paid for. Yet offer no legit way to pay for it

As the US Senate plans to vote about the "roads and bridges" part of the infrastructure package tomorrow, check out this update from NBC's Sahil Kapur from today.

Apparently, the GOPs on Capitol Hill want to take the Scott Walker approach of fixing the roads.

And let me guess, these same conservatives also are crying about inflation and the deficit, but they don't want to take realistic steps to pay for the infrastructure they allegedly support. Even though paying for infrastructure would lower the deficit and be a limiting factor on inflation.

Contrast the GOP's "concerns" over deficit and inflation to what we see in the financial markets, where bond traders are willing to take a paltry rate of return of less than 1.2% over the next 10 years just to help finance the debt. And it's not inflation that tanked the stock market today, it's worries about a resurgence of COVID slowing down the economy. You know, the virus that GOPs don't want to deal with, despite the fact that it's the MAGA parts of America that are most likely to be seeing spikes in new cases tomorrow.

Oh wait, I'm told by NBC's Kapur that the GOP Senator Rob Portman has a plan to pay for infrastructure.

So what is this Medicare Rebate? It's something that currently doesn't exist, and likely won't do much to help anyone.
That rule, which has not been implemented, would block drug manufacturers from giving percentage-based rebates to pharmacy benefit managers that manage drugs for insurance plans. Critics of the practice say the rebates encourage higher list prices and don’t reach patients at the pharmacy counter.

Federal scorekeepers predicted insurers would increase premiums to account for the lost discounts, but that rule was delayed in court and has not taken effect....

Negotiators originally said the IRS enforcement provision would have cost $40 billion but generated $140 billion, netting $100 billion in revenue, although the CBO later tentatively estimated it would only net $60 billion in revenue, according to an aide familiar with the negotiations.
So any cost-savings the govt would get won't come close to paying for the infrastructure we need, and GOPs would do nothing to keep prices from going up, so Medicare recipients could pay more.

Yeah, no sale on that scam. I guess reconciliation for everything, then. Oh well, GOPs. Guess you'll have to explain why you didn't vote for yet another thing the people want, and that Dems will get sole credit for delivering on.

Sunday, July 18, 2021

Retail sales strong, outside of cars and sectors helped by COVID

As the economy continued to reopen in June, it was reflected in a good retail sales report that came out late last week.
Retail sales rose 0.6% last month. Data for May was revised down to show sales falling 1.7% instead of declining 1.3% as previously reported. Economists polled by Reuters had forecast retail sales dropping 0.4% in June.

Sales advanced 18.0% compared to June last year and are now 18.0% above their pre-pandemic level. Retail sales mostly capture the goods component of consumer spending, with services such as healthcare, education, travel and hotel accommodation making up the remaining portion. Restaurants and bars are the only services category in the retail sales report.

Demand shifted to goods like electronics and motor vehicles during the pandemic as millions of people worked from home, took online classes and avoided public transportation. Spending is now rotating back to services like travel and entertainment.
You can really see this over the last 2 months inn particular. Some sectors that had huge jumps in activity in the COVID World, have seen their sales revert down toward a more normal level of activity. Likewise, you can see where bars and restaurants continued to recover in June after being devastated in 2020 and early 2021.

The drop in autos stands out to me, as that sector had great growth for about a year starting in Spring 2020, but has had significant drops in sales over the last 2 months. Reuters talked to an economist to find out why that might be happening.
The rebound in sales reported by the Commerce Department on Friday was despite purchases of motor vehicles declining for a second straight month due to a lack of supply caused by a global semiconductor shortage. Sales were also flattered by higher prices resulting from supply constraints as COVID-19 vaccinations, low interest rates and massive fiscal stimulus fuel demand.

"Growing pains from reopening are on the supply side," said Chris Low, chief economist at FHN Financial in New York. "Inflation reports earlier this week confirm firms are still struggling to keep up with this demand, but another month of high retail spending should give companies confidence that consumer demand is not slowing down anytime soon."
I'm not as certain about that, as prices of new cars and trucks have gone up by 5.3% in the last year, and used vehicles are up more than 45% in the last year. Makes you wonder what ends first in the auto sector- the lack of supply or the lack of sales.

Conversely, retail sales grew by an impressive 1.3% outside of autos, so everyday consumer spending seems to have been strong as the 1st half of 2021 finished up. But on the same day of the retail sales report, we also got news of a surprise drop in consumer sentiment, with inflation fears being the main reason. Now, does that along with a resurgence of COVID infections, translate into a slowing down of the Biden Boom that has characterized the US economy in the last few months?

Let's keep an eye on July's reports, to see if there's any slowdown in growth from these factors. And let's see which sectors may get hurt more if prices and COVID cases continue to rise for the rest of the Summer. Or if some sectors boom even more if supply constraints of both materials and labor get cleared over the coming months.

Saturday, July 17, 2021

You know what improves the environment? REGULATIONS AND ENFORCEMENT!

You know PFAS are a problem in Wisconsin when even the WMC-owned Republicans want to give communities $10 million to help clean up these chemicals from their groundwater. It made me wonder what was hiding inside the bill because it was too close to good, honest governance, which is not what this crew is about.

Sure enough, there’s a catch in the WisGOP bill that allows companies to avoid consequences for the damage that they caused.
A memo from the nonpartisan Legislative Counsel says in addition to precluding those claims, the bill may also prevent the Department of Natural Resources from bringing enforcement action under the state’s environmental remediation law.

While it does not explicitly reference DNR enforcement actions, the memo says, the bill precludes any action against a person responsible for contamination that is the basis for a grant.

So, if grant money were used for remediation or some other improvement to a property, “then a plain language reading of the bill suggests that DNR could be precluded from bringing an enforcement action with respect to that property.”

According to the memo, the bill could even preclude enforcement actions unrelated to PFAS contamination, including crimes.

“While a court would likely view such an interpretation as absurd or unreasonable, it is significantly less clear how a court would interpret the provision in the context of DNR enforcement actions under the environmental remediation law,” it states.
This is a classic GOP/oligarch move – do a small gesture or payoff that pre-empts the violators from being held accountable, and to keep real change from being put in place. And as the number of Wisconsin communities with PFAS contamination continues to grow, that $10 million may not go very far.

In what may or may not be coincidence, the Wisconsin Examiner contrasted the WisGOP/WMC cover-up bill on PFAS with stronger regulations and oversight that may be coming at the Federal level.
EPA Administrator Michael Regan, a former top environmental official in North Carolina, said the agency is currently in the process of regulating two of the most studied types of per- and polyfluoroalkyl substances, or PFAS, in drinking water.

Two Michigan Democrats, U.S. Reps. Debbie Dingell and Dan Kildee, added that House Democratic leaders will bring the PFAS Action Act of 2021, which aims to reduce Americans’ exposure to the toxic chemicals in air, water and consumer products, to a floor vote next week.

“We recognize PFAS is an urgent health challenge,” Regan said. “We’re committed to working with all stakeholders to protect the health and safety of all of our communities.”…

…Dingell, who is leading the bipartisan PFAS Action Act, along with Rep. Fred Upton, a Michigan Republican, expressed her frustration with a lack of federal standards set for the chemicals in drinking water, as well as cleaning standards.

Her bill would designate two types of PFAS—perfluorooctanoic acid, or PFOA, and perfluorooctane sulfonate, or PFOS—as hazardous substances, which would kick-start federal cleanup standards, particularly on military bases.
On related environmental news, I saw a segment on Chris Hayes’ show on Thursday, and wanted to share some of it with you. Hayes starts by mentioning how California has done far better than the rest of the nation over the last 50 years in limiting carbon emissions.
One of the most important aspects of climate policy is what`s called a clean energy standard. It`s just a way for the government to tell utility companies look, you got to get this much clean energy in your energy generation. And you can`t admit as much carbon as you used to. And then, every year they can ratchet that down.

That creates all sorts of positive incentives for consumer use. And if you pair that with regulations on efficiency, you can really start to make a difference.

Here`s a look at California, which has done both, clean energy standard and it`s got incredible regulations on efficiency. There`s the divergence between how much energy they consume in California and how much they consume in the U.S. That`s all just regulation doing its job.

Then Hayes discusses energy initiatives in the infrastructure bills that are going through Congress with Minnesota US Sen. Tina Smith. Not only is Smith impressive in how thorough she is on energy issues, but Hayes brings up how real regulation with benchmarks seems more effective than waiting on the utility companies to do the right thing.
HAYES: ...I become convinced that basically just saying to the utilities, like, here`s what you got to do, figure out how to do it, actually is the best way to drive down emissions.

SEN SMITH: Yes, and it`s an incentive. And let`s be honest, everybody sort of likes an incentive. They like to be said -- they`d like to hear, OK, here`s the direction we go, this is what we`re going to do. This is the direction to head and we`re going to help you get there and we`re going to help you get there faster, because I mean, we don`t have a lot of time to pussyfoot around here, we need to move quickly. We can`t wait for you know, another 30 or 40 years to clean up our grid.

And so, that I think is the power of this idea. And when you combine it with all of the policies that we also have included in this -- in this piece of legislation, you know, electric charging stations and incentives to build out a smart grid, tax incentives for building clean electricity. All of that comes together to be a truly transformational policy.
Let's hope we get that out of one of these infrastructure bills - that there be some kind of limit and regulation to go along with incentives to have industries transition over into energy choices that help us long-term. But as we see in Wisconsin, it's rules and regulations that have to be part of the equation, or else the polluters won't be held to account for the damage they cause. And they won't change unless the benefits of polluting are more than the costs of changing.

Thursday, July 15, 2021

COVID higher in Wisconsin, too. But still at low levels that we can hold down

As we hear about COVID cases jumping back up in many states in the southern half of America, let's see how things are going up here.

Today’s 7-day average of new infections held at 138, still lower than any time between April 2020 and June 2021, but the highest that we've seen in 6 weeks. And what’s concerning is that the Wisconsin Department of Health Services says 13 Wisconsin counties had significantly higher amounts of new infections over the last 2 weeks than in the 2 weeks ending July 7.

DHS also does a list of levels of COVID activity, but what DHS describes as “high” COVID activity is sometimes less than the rate of infections in places with “medium” activity, because it looks at whether cases are going up or down by any significant amount. For example, Dunn County has a rate of new cases that is more than double Dane County’s, but because it’s grown in Dane while it shrunk in Dunn, so Dane has “high” activity and Dunn is medium.

And you can see where several counties had growing caseloads, so the picture isn’t as bad as that map might show. But it is concerning to see cases being nearly twice what they were at the start of July, and it needs to be limited now.

There isn’t a lot of connection between vaccination rates and COVID infections from what I can tell, although I also wonder if the rural counties with low vaccination rates have such a small sample size and low numbers of people wanting to care about COVID in general. This would make it hard to find people who test at all, let alone test positive.

Fortunately, COVID deaths are still around 1 a day in Wisconsin, but as we now know, hospitalizations and deaths trail case numbers by about 4-6 weeks. And given that vaccination seems to be even more effective at preventing people from serious health problems if they do get COVID, maybe that's where we'll see the disparities show up. I hope it doesn't come to that, but I wouldn't be shocked if it does.

Play smart out there folks, because there's still about 1/2 of Wisconsinites that haven't gotten the shot. I have no sympathy for the ones who have chosen not to be vaxxed at this point (especially if you're doing anything where you go out in public), but there are kids and others that haven't had the chance. Let's use July to batter this virus back down in Wisconsin.

Wisconsin jobs, workers came back in June. Even more than they normally would

After a big US jobs report for June and stories about labor shortages in Wisconsin, it made today’s statewide jobs numbers intriguing, to see if the data was matching up here.

Sure enough, we also had gains in jobs and work force in Wisconsin last month, with good signs all around.
The Department of Workforce Development (DWD) today released the U.S. Bureau of Labor Statistics (BLS) preliminary employment estimates for the month of June 2021. The data shows that Wisconsin added 10,700 total non-farm and 8,400 private-sector jobs in the month of June. Wisconsin's unemployment rate in June was 3.9 percent, matching the May unemployment rate. Additionally, Wisconsin's labor force grew by 10,000 people in June, a statistically significant rate of growth according to BLS.

Place of Residence Data: Wisconsin's labor force participation rate in June was 66.3 percent, 0.2 percentage points higher than May's labor force participation rate, and 4.7 percent points higher than the national rate of 61.6 percent. Wisconsin's unemployment rate in June was 3.9 percent, while the national unemployment rate was 5.9 percent for June.
Place of Work Data: Wisconsin added 8,400 private-sector and 10,700 total non-farm jobs in June 2021.
That all sounds pretty good, and if you dig further into the jobs figures, we see the gains were pretty widespread, and show that WMC/GOP memes about “lazy workers not wanting jobs” continue not to hold water.

That’s especially the case when you realize that most of those sectors had their job gains deflated due to seasonal adjustments, which count on a certain amount of people joining the work force and getting hired in June. But we went well above that amount in June 2021.

Wisconsin June 2021
Total jobs
Seasonally-adjusted +10,700
Non-seasonally adjusted +44,700

Private jobs
Seasonally-adjusted +8,400
Non-seasonally adjusted +54,000

Labor Force
Seasonally-adjusted +10,000
Non-seasonally adjusted +69,800

Seasonally-adjusted +8,700
Non-seasonally adjusted +50,200

Even the sectors that “lost” jobs on a seasonally adjusted basis in Wisconsin were adding workers in reality. This includes construction (+8,100 NSA), manufacturing of non-durable goods (+2,000 NSA), health care and social assistance (+2,400 NSA), and arts/entertainment/recreation (+4,400 NSA).

Conversely, Wisconsin’s unemployment claims fell throughout much of June, and continued on a downward trend for July.

So if Wisconsin’s $300/week add-on is a disincentive for work, there’s nothing in the data that shows it. Likely because it’s been RW oligarch BS from the start.

From my observations, seeing that the Bucks had to ship in workers from out of state to handle all of the extra business this week, and adding in the large amount of “help wanted” signs I’ve seen in places in both the 715 and 608 area codes this month, I’d say hiring in Wisconsin still has yet to catch up to the huge jump in demand sparked by COVID vaccinations and the Biden Boom.

And in summary, it’s clear that Wisconsin ended the 2nd quarter of 2021 on a high note when it came to the jobs market. The question now becomes whether that momentum can keep up for the rest of the Summer with the increased work force and low unemployment rate.

UW's Menzie Chinn has a good breakdown of the Wisconsin jobs situation at Econbrowser that gives a wider lens into these numbers.

Wednesday, July 14, 2021

Just because funds and people are coming back to restaurants, it doesn't mean troubles are over

It’s taken a while, but restaurants in Wisconsin and the rest of the country are finally getting their targeted stimulus support.
“For those who received it, it’s a big shot in the arm,” said Wisconsin Restaurant Association President and CEO Kristine Hillmer in an interview. “For those who didn’t, it’s going to be tough.”…

In total, 5,871 businesses in the state applied for $994.6 million in funding from the Restaurant Revitalization Fund. But just 2,095 of those applicants received a total of $379.3 million, according to the SBA figures provided to by Hillmer.

On the national level, over 278,000 applicants sought more than $72 billion from the fund, and around 101,000 received more than $28 billion in funding. The SBA also retracted awards for 2,695 applicants nationwide who had initially been told their applications were accepted, Hillmer said.
Now, it’s plausible that all applicants didn’t need the money and were just taking a shot to get more funding (because why not?), but there certainly were a lot of losses that these business owners needed to make up due to the COVID world.

And now that consumers feel confident enough to go back out to eat, restaurants are facing higher costs in both labor (because they can’t find enough/pay enough to replace the workers laid off in 2020) and on supplies, as was laid out in an in-depth article in the Journal-Sentinel this week. In addition to a lack of waitstaff or meal preparers, the J-S article describes restauranteers struggling to find or afford items to make meals with.
"We’ve had to take some things off the menu we’ve had since Day 1; we’ve had to re-engineer some things," said Andrew Miller, the chef and co-owner of seafood restaurant Third Coast Provisions downtown. Because lobster prices have doubled, the $21 side dish of lobster mac and cheese would have become prohibitively expensive. So, off it came...

Wagyu beef, prized for its marbling, is available only sporadically, Miller has found. The price of the most sought-after beef cuts or cuts that aren't in abundance on cattle, such as tenderloin and hanger steaks, have increased 200%, he said.

"We’ve been pretty select in what we’re bringing in until things kind of calm down," Miller said. "When we talk to our distributors, they don’t see that happening any time soon."

Meanwhile, Narr, of Triciclo PerĂº, said, "Nope, I’m not going to pay four times the price for a case of wings."

Sometimes, ingredients just aren't available when the restaurant needs them. It can be a matter of suppliers and producers not being able to ship the products — not enough forklift drivers to load the trucks and not enough truck drivers to transport the goods, for instance.
These cost pressures for eating and drinking places was certainly borne out in today’s Producer Price Index report. Take a look at the recent jumps in prices paid for meat products and well as grains, fruits and seed-based items.

And on the staffing side, you see the problem when businesses make mass layoffs instead of furloughs or work-shares, and a strong recovery kicks in a few months later. It becomes hard to find enough people to bring back to match the businesses’ needs.

Some of these restaurants quoted in the article have mentioned that they will have to raise prices to make up some of the difference (if they didn’t do so already during the COVID era to make up for decreased business and extra sanitation needs). as “food away from home” rose by 4.2% in the last 12 momnths vs only 0.9% for “food at home”.

As I’ve said before, even with reopenings, we aren’t going to see things return to a pre-COVID normal, which will make for an uneven and often-disruptive rest of 2021. And nowhere does that seem more evident than in a restaurant industry that took a big hit in 2020, and is still adjusting to the changed situation in this year.

Tuesday, July 13, 2021

Inflation watch intenisfies. Let's see if it's still on by Fall

Looks like it’s time for another CPI report, and it’s therefore time to crank up the “inflation watch” again.
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.9 percent in June on a seasonally adjusted basis after rising 0.6 percent in May, the U.S. Bureau of Labor Statistics reported today. This was the largest 1-month change since June 2008 when the index rose 1.0 percent. Over the last 12 months, the all items index increased 5.4 percent before seasonal adjustment; this was the largest 12-month increase since a 5.4-percent increase for the period ending August 2008.

The index for used cars and trucks continued to rise sharply, increasing 10.5 percent in June. This increase accounted for more than one-third of the seasonally adjusted all items increase. The food index increased 0.8 percent in June, a larger increase than the 0.4-percent increase reported for May. The energy index increased 1.5 percent in June, with the gasoline index rising 2.5 percent over the month….

The all items index rose 5.4 percent for the 12 months ending June; it has been trending up every month since January, when the 12-month change was 1.4 percent. The index for all items less food and energy rose 4.5 percent over the last 12-months, the largest 12-month increase since the period ending November 1991. The energy index rose 24.5 percent over the last 12-months, and the food index increased 2.4 percent.
President’s Biden’s Council of Economic Advisors clearly were worried about the perception of higher inflation, as they sent off a series of tweets explaining some of the reasons for the jump in CPI.

While some of this is definitely spin, I do think it's appropriate to look at the 2-year trend in this case, because this accounts for the drop/flattening in prices that existed in the first few months of COVID and the snapback since then. You put that together and you get a rise of 6.1% between June 2019 and June 2021, or 3% a year. Slightly elevated but not horrifying, and June 2020 is when prices started to rebound off their COVID bottoms, so we should have a more accurate picture of where this is going next month.

The stock and bond markets responded to the news of higher inflation with maybe one raised eyebrow, if not an outright shrug.
Markets, which have in recent months grown wary of rising prices and whether they will cause the Fed to act, appeared to keep their cool over inflation on Tuesday.

The S&P 500 was essentially unchanged shortly after the open and the 10-year Treasury yield actually fell, not the reaction one would expect from such a hot inflation report on the service.
Although the 10-year yield did rise later in the day, it's still well below where it was 3 months ago, and the 3-month note is below where it was at the start of 2021. This is despite inflation being on the rise over that time period.

So those investors clearly aren’t worried about prices being on the rise, because they’ll take a microscopic rate of return that would be a loser of value if inflation was really running.

It does seem that the inflation is uneven, with much of the increases confined to a few industries having large jumps that are being compared to when these same industries were in depression in June 2020.

But I do sense that there are inflationary effects from the adjustments that the economy is making due to the post-COVID world. There seems to be a huge inability for the stimulated increase in demand to be matched by restaurants and other businesses to hire back enough staff after large layoffs when the pandemic first broke out. The June jobs report revealed that hourly wages continue to rise higher, and this number never snapped back down, even as previously lower-wage jobs came back in the 2nd half of 2020.

I’m not worried too much at this point, and it’s a good thing to see workers be able to have better choices in jobs and wages. To me, that's "good inflation". But these adjustments are still working themselves out, and let’s see where the ride takes us.

The key is whether the rising costs and shortage disruptions that we’ve seen in the first half of 2021 actually do settle down, or if input-related inflation is starting to feed onto itself. If it's the latter, then we might need outside measures like interest rate increases and fiscal restraints to change the pattern, and that would likely blunt the Biden Boom that is currently going on and expected to continue as long as COVID can stay under control and demand stays high.

Monday, July 12, 2021

After 2 big Evers vetoes, a lot of money is around after budget season

The Legislative Fiscal Bureau is out today with a listing of Governor Evers' vetoes and an update on where the Wisconsin budget stands. And it has some very intriguing bits of information that can set the table for the next year of action at the Capitol.

If you read into the document, you'll see most of these vetoes are situations where the GOP Legislature wanted state agencies to give a bunch of reports and requirements for some things (with no funding for this extra work), and Evers basically said "I don't think so." But we also know of two big-dollar vetoes from Evers.

1. Refusing to add another $550 million to the sgtate's already-large Budget Stabilization Fund.
2. Refusing to change the state's withholding tables next January 1, retaining $683.7 million in the short term (although it'll eventually come back in the form of higher tax refunds).

This moves are the main reason that Evers' vetoes allow for more than $1.2 billion more dollars to cushion things and/or play with over the next two years.

This allows for Evers to give another shot at adding resources to education and/or other initiatives if the economy holds up for the next 6-8 months. And it can force WisGOPs to reply to those plans closer to the 2022 elections (or not, which is its own policy decision).

So even with the signing of the budget last week, it doesn't mean that budgetary action is over. In fact, it tells me that the $1.675 billion projected to be around in the next 2 years is going to be an enticing target and big opportunity to do needed changes and reforms, if we choose to.

Sunday, July 11, 2021

Fear the Deer! That makes the FiServ great policy, right? Not for me

Not that I'd expect any better from Robbin' Vos, but Napoleon used today's big sports event in downtown Milwaukee to make a baseless political slap.

Let's be real, if the gerrymandered WisGOP Legislature was still in charge in 2015, they'd have opposed the Bucks deal for no reason other than to blame Evers if the team left.

But beyond that, let's go back to what happened at the State Capitol to allow FiServ Forum to be built, and whether it really was worth it. You can click this link to see the Legislative Fiscal Bureau's summary of the Bucks arena bill, which includes the horrid $220 million giveaway of state money that Walker originally wanted to do (with the total reaching $381.7 million with debt costs), and the lesser giveaway that we ended up with.

First, taxpayers are still playing $8 million a year for the Bucks arena, although half of that is paid back by giving a cut in shared revenue to Milwaukee County.
a. Two separate, GPR sum certain appropriations and provide $4.0 millionGPR in each appropriation in 2016-17 to make payments to [the Wisconsin Center District] to assist in the development and construction of the District's sports and entertainment home arena facilities. One of the appropriations is related to the $4.0 million annual GPR, county and municipal aid reduction to Milwaukee County, although it would not be statutorily tied to those provisions. Specify that both appropriations would be repealed on June 30, 2036. Require that the appropriation that is not related to the Milwaukee County aid payment reduction provisions under the Act be limited to a cumulative total of $80.0 million.

b.A biennial appropriation funded at $10.0 million GPR in 2016-17 for the payment of grants to the Bradley Center Sports and Entertainment Corporation. Specify that the appropriation would be repealed on June 30, 2017.
I just took a look at the recently signed state budget, and sure enough, both of those $4 million annual payments to the WCD are still in there. And we are still paying a little over $1 million in interest over the next 2 years for the now-demolished Bradley Center.

As alluded to above, Milwaukee County is getting $4 million less from the state in shared revenue, with the argument being that all the added economic activity from the arena will make up for it. That's a questionable assumption, as a 0.5% sales tax would require $800 million in added, sales-taxable activity to give an extra $4 million in revenues. Maybe that's happening, especially with all of the NBA and sports media people descending on the City this week, but that also assumes that money wouldn't be getting spent anywhere else in Milwaukee over the course of the year.

Let's also note that while the Wisconsin Center District is the one who took on all of the borrowing and debts for the FiServ instead of the state, the WCD also gets $1.50 from each ticket sold at the FiServ (the state also gets $0.50 a ticket), and the District gets the following taxes.

So they should be doing OK with this. The state likely gets its $4 million in net funds back and then some, because there likely wasn't going to be a recovery of salaries that would be close to the $135.5 million that the Bucks have in team payroll for this year (that's before we talk about coaching, front office, or regular employee staff). The added construction in and around the arena also likely gained income and jobs, at least in the short term.

But you know who's not getting much in additional taxes sent to them? The City that houses the Bucks and the Deer District.

And the state isn't sending additional shared revenues back to the City either. Governor Evers wanted to send an additional 2% to all local communities in Wisconsin in those funds for this budget, and the GOP-run Legislature said no.

Which makes this statement by a suburban GOP legislator who voted for the arena package all the more infuriating.

Hey Joey. Maybe if you allowed Milwaukee to keep more of the money that they generate from FiServ Forum and the other reasons that they are Wisconsin's Number 1 tourist attraction, THEY COULD AFFORD TO HIRE AND KEEP THOSE COPS!

But giving all of Milwaukee a better chance of succeeding wouldn't allow WisGOPs to play off the resentments and racism of weak white people, and get votes from those dopes, now would it? At the same time, you can bet all of these lowlifes will be giving their #FearTheDeer tweets and talking about how great it is for the NBA Finals to be in Wisconsin for the first time since 1974.

And the two-tier reality of Milwaukee and the lack of payback that the City has gotten from this development is why I still think the FiServ Forum was a bad deal, and not worth the tax dollars that were put into it. Yes, I like the arena, am very happy the Bucks are in the Finals, and it's a great stage for Wisconsin's largest city and economic engine to show for the rest of the country. But it doesn't seem to have done much for the economic apartheid that grips Milwaukee, and the race-baiting and resentments from WisGOPs seem worse now than they were when this scheme was passed into law 6 years ago.

It'd be a healthier situation to see real investment in all corners of the City, and better jobs and access spread across the region. And for Milwaukee to have a better chance of choosing its own fate, instead of being handcuffed by a gerrymandered Legislature that would rather have a few fancy attractions and lots of losers than a large-scale, legitimate strategy to turn around decades of damage from racial segregation and corporate greed.