Below is an excerpt from the most recent edition of WisBusiness Tuesday Trends.
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RISING
Mining: Thwarted last year in their efforts to overhaul the state’s mining laws, Republicans are signaling they won’t allow that to happen again in the new legislative session. Leaders in the Assembly and Senate say pro-mining legislation will be one of the first bills introduced this session — with the goal of being ready for a vote by March — and Gov. Scott Walker makes three stops around the state to promote the upcoming bill. Walker and GOP leaders say they’ll work off the version of the bill that stalled in the state Senate last session, but are open to tweaks. While environmentalists continue to worry, Walker insists during a stop in Green Bay that those concerns “had next to nothing to do with” the legislation’s failure to pass last year, claiming outside forces shut it down due to recall politics. That charge stuns some, who note the bill ultimately died because state Sen. Dale Schultz refused to join fellow Republicans in the Senate. With Republicans returning to the Senate majority this week, however, they now have the margin to lose a vote in that chamber. Republicans also say they’ll consider the work of Democratic Sen. Tim Cullen during a special mining committee this summer and fall, but observers aren’t expecting an overwhelmingly bipartisan bill. Mining critics also continue to warn lawmakers are underestimating the sway Native American tribes can have over mine approval.
MIXED
Dairy: One of the state’s flagship industries breathes a sigh of relief after the passage of a deal to avert the federal fiscal cliff. While the deal staved off dramatic spending cuts and tax increases, it also included a temporary extension of the terms of the farm bill that was set to expire at the end of the year. Without a new farm bill, observers said dairy standards would revert back to the policies of the 1940s — doubling milk prices in supermarkets and creating uncertainty throughout the sector. Moreover, the end of the farm bill would have meant farmers wouldn’t have the Milk Income Loss Contract program as a safety net. Lawmakers did not, however, take up other changes proposed during the last session’s farm bill debate, and the National Milk Producers Federation charges that the extensions “don’t even qualify as kicking the can down the road.” Meanwhile, a Waukesha dairy plant employing about 100 workers shuts down suddenly over the weekend, throwing the supply of milk to area schools and groceries into flux. Golden Guernsey informs its workers that they should leave as they showed up for work Saturday morning; the company was taken over last year by a Los Angeles private equity firm amid antitrust concerns about former owner Dean Foods.
FALLING
WEDC: A rough first full year on the job ends with more bad news for the Wisconsin Economic Development Corporation. An audit of the quasi-public agency, which supplanted the state Department of Commerce in mid-2011, shows the WEDC had about $19 million in outstanding loans as of June 30 that aren’t expected to be fully collected. Of those, auditors at Schenck SC said $15 million are a combination of forgivable loans or loans that the agency may still receive some payment on, while $4 million is expected to be completely uncollectible. That’s also distinct from the issue of $12.2 million in outstanding loans that the WEDC had previously failed to track. Another recent review — this one by Wisconsin Bankers Association subsidiary Financial Institution Products Corp. — attributed the agency’s problems to transferring duties from the old Department of Commerce. That report also identified problems with the agency’s financial tracking and documentation software, and confirmed earlier concerns from board members that WEDC needs a more defined credit risk management policy and should create a credit committee to oversee loan, tax credit and grant approvals. Finally, the WEDC will no longer administer a block grant program after federal officials last year questioned the agency’s authority to award such funding. The Department of Administration will instead handle the grant money.
