TUE AM News: WBA warns of credit unions acquiring banks, while credit union group dismisses concerns; State employment expected to fully rebound by Q4

— The Wisconsin Bankers Association is warning of a “concerning trend” of bank acquisitions by credit unions, but the head of the Wisconsin Credit Union League argues these worries are unfounded. 

After Cottage Grove-based Summit Credit Union recently announced it would acquire West Bend’s Commerce State Bank, the WBA said taxpayers in the state “should be very concerned about this transaction.” The group noted Wisconsin will lose out on $1 million in annual future tax revenues because of the credit union’s income tax-exempt status. 

WBA said this is the sixth acquisition of a Wisconsin bank by a credit union in the past 10 years, highlighting a trend of “taxpaying community banks being bought by large, growth-oriented credit unions.” The purchase will bring Summit Credit Union to nearly $6 billion in assets and 54 locations, the release shows, with the addition of Commerce Bank’s $837 million in assets.  

But Brett Thompson, president and CEO of the Wisconsin Credit Union League, points to polling from last year that found broad support for credit unions stepping in if a community bank leaves a community. 

“To what end will the WBA continue to complain about credit unions’ tax status — despite

its’ confirmation over decades of Congressional tax reform, strong consumer support

(80% of Wisconsinites support the current tax status), and undeniable financial benefit

to members,” Thompson said in an emailed statement. “The facts tell the real story.” 

WBA argues large credit unions are “becoming indistinguishable from tax-paying banks,” and calls for the public and elected officials to question the need for their tax benefits. 

“Why should the 14 Wisconsin-based credit unions over $1 billion in asset size pay nothing in state income tax to support social services, law enforcement, schools, and other public services?” WBA said in its release. “Individuals, families, and tax-paying businesses are left to shoulder these growing expenses.” 

Meanwhile, Thompson highlighted results from a poll in August 2021 that found 72 percent of respondents said credit unions offer the best deal for consumers, compared to 13 percent for banks. The poll was conducted by Public Opinion Strategies and tapped 600 registered Wisconsin voters by phone. 

In a separate statement provided to WisBusiness.com, Summit Credit Union President and CEO Kim Sponem noted credit unions “do pay taxes,” including sales tax, employer-related taxes and property taxes. 

“Commerce State Bank and its shareholders have the freedom to decide whom they want to partner with and what organization will best benefit their clients, employees and communities,” she said. “We are thrilled Commerce State Bank chose Summit Credit Union.” 

See the WBA release: https://www.wisbusiness.com/2022/wisconsin-bankers-association-statement-on-the-recent-acquisition-of-a-taxpaying-wis-bank-by-a-credit-union/ 

— The state Department of Revenue predicts employment in Wisconsin will reach pre-pandemic levels by the end of the year, slightly behind the U.S. recovery rate. 

In its latest economic forecast, DOR says employment in the state is expected to increase 3.3 percent over the course of 2022 and 1.3 percent in 2023. 

Meanwhile, the agency expects personal income in Wisconsin increased 6.5 percent in 2021 and will increase by 2 percent this year. That’s compared to 7.4 percent and 2.1 percent nationwide, respectively. 

But when adjusted for rising prices, real personal income in Wisconsin is forecasted to have grown 3.1 percent in 2021 and to decline 2.2 percent in 2022, compared to a nationwide increase of 3.5 percent last year and a decline of 2 percent this year. 

DOR’s forecast expects wage and salary income to have recovered “strongly” in 2021 with a 7.5 percent increase in the state and a 9.2 percent increase nationwide. 

Looking ahead to this year, the agency says inflation and a competitive labor market “will bring another year of strong growth” with wages and salaries expected to increase 8.4 percent in Wisconsin and 9.4 percent in the United States. 

See the forecast here: https://www.revenue.wi.gov/dorreports/2022-02-wi-forecast.pdf 

— A new report from the Wisconsin Institute of Law and Liberty suggests the federal pandemic eviction moratorium and forbearance programs contributed to rising housing prices in the state. 

The report shows the average home price in the state has increased by over 37 percent since January 2019, from about $175,000 to $240,000 by December 2021. The report’s author, WILL Research Director Will Flanders, wrote the eviction moratorium and forbearance options “likely increased” housing prices during the pandemic. 

According to his analysis, the eviction moratorium is associated with an increase of $3,664 in the average home cost in Wisconsin, or about 5 percent of the overall increase. 

And he found forbearance programs — which allowed homeowners with federally backed mortgages to request a delay on mortgage payments for up to a year — are associated with an increase of $11,354 in the average home cost. That’s equivalent to an increase of about 17.4 percent. 

Flanders notes the increase in housing costs in Wisconsin and the country overall wasn’t caused by a single factor, pointing to underproduction of housing units and inflation of building supply costs. 

“That said, this study has provided evidence that federal intervention, well-intentioned though it may have been, worked to exacerbate price increases in a real estate market that was already seeing increases,” he wrote. 

He says it’s debatable whether the moratoriums were justifiable in the “immediate aftermath” of COVID-19, but argues they “continued for far too long, and may have played a role in denying many families an important piece of the American Dream.” 

See the report: https://will-law.org/wp-content/uploads/2022/02/Housing-Policy-Brief-FINAL-3-1-22.pdf 

— Gov. Tony Evers has announced a $92 million program to provide financial assistance to homeowners that have struggled due to the pandemic. 

Eligible recipients can get help with mortgage payments, local property taxes, utilities, housing counseling and legal services, according to a release. The program is meant for homeowners in Wisconsin living in a variety of residences who have experienced “a qualified financial hardship” after Jan. 21, 2020, and have a household income at or below 100 percent of the area’s median income. 

The program was recently approved by the U.S. Treasury and will be administered by the state Department of Administration. 

“The Wisconsin Help for Homeowners program will provide a lifeline to homeowners who might otherwise be at risk of losing their homes because of hardships created by the pandemic,” Evers said in the release. 

See program details: https://doa.wi.gov/Pages/LocalGovtsGrants/Homeowner-Assistance.aspx 

— The Wisconsin Main Street Alliance is applauding Evers for signing a bill that provides an income tax exemption for Restaurant Revitalization Fund grants. 

The small business group says the move will help more than 2,000 businesses in the state and provide more than $500 million in tax relief. Under the new law, expenses paid for by these grants are deductible if they “would otherwise be ordinarily deductible,” a release from the guv’s office shows. 

In a statement, Evers praised restaurants for their “amazing resilience, ingenuity, and flexibility over the last two years,” pointing to supply chain issues, inflation and workforce challenges. 

“I am glad to sign these bills today to help relieve a little bit of stress and worry for business owners as they head into tax season,” he said. 

Evers also signed a bill yesterday that increases the maximum amount individuals can claim as net capital loss deductions to $3,000 from $500 to align with federal law starting in tax year 2023. 

— The state recently issued $3 million in benefits to over 44,000 families through the Pandemic Electronic Benefit Transfer Program for kids that missed free or reduced price meals at school due to COVID-19. 

That’s according to a release from the Department of Health Services, which shows the benefits were provided for more than 62,000 enrolled children attending schools in the USDA’s National School Lunch Program or School Breakfast Program. 

This round of benefits, issued over the weekend, covers the period of the 2021-2022 school year between August and October. 

“The P-EBT program for the current school year is different from prior years because most children have been learning in-person at their schools since the fall of 2021,” said DHS Secretary-designee Karen Timberlake. “Nevertheless, COVID-19 has continued to disrupt some classrooms, keeping some students learning from home or absent, and this has caused some children to miss the school-provided meals that thousands of Wisconsin families rely on.” 

The agency issued $7.10 in benefits for each eligible child for each day they qualified during the three-month period, the release shows. Most families got the benefits through an existing P-EBT card or a QUEST card used for FoodShare benefits. DHS says those getting benefits for the first time will get a new P-EBT card in the mail. 

For the rest of the 2021-2022 school year, DHS will be providing benefits over the next five months or so covering the periods between November 2021 and June 2022. 

See the release: https://www.dhs.wisconsin.gov/news/releases/030722.htm 

— Quiver Quantitative, which provides tools and dashboards for retail investors, announced recently that it closed a $2 million financing round led by Allos Ventures of Indiana.

According to a release, the Madison company will use the funds for user growth, new proprietary datasets and advanced testing and analytics. 

“Hedge funds and other professional investors spend billions a year on alternative data to inform their investment decisions,” CEO James Kardatzke said in a statement. “We want to level the playing field by bringing this same information to individual investors.”

A number of investors including M25, Bascom Ventures, Lancaster Investments, Connetic Ventures, WARF and the Idea Fund of La Crosse also participated in the funding round.

Quiver’s free app provides access to datasets that track everything from social media sentiment to government contracts. The company launched in 2020 and has more than 300,000 registered users.

See more at Madison Startups: https://www.madisonstartups.com/quiver-quantitative-raises-2m/ 

— Wisconsin Veneer and Plywood will be required to pay a $75,000 penalty for allegedly violating the state’s air pollution control laws, according to a state Department of Justice release. 

The company’s manufacturing facility in Shawano County uses a wood-fired boiler to burn scrap veneer, sawdust, wood chips and bark, venting “uncontrolled emissions” into the surrounding environment. 

The release shows the company conducted a particulate emission test for the boiler on May 13 and 14 of 2020, which found it violated two emission limitations in its air pollution control permit. The business continued to operate the boiler in this manner through July 9 of the same year. 

On July 10, 2020, the boiler was shut down for two weeks for cleaning. Testing has found it has since returned to complying with the company’s emissions permit, per the release. 

See the release: https://www.doj.state.wi.us/news-releases/ag-kaul-announces-environmental-judgment-requiring-wisconsin-veneer-and-plywood-inc 

— The Wisconsin Technology Council will be accepting entries for this year’s Wisconsin Youth Entrepreneurs in Science contest through April 13. 

The Wisconsin YES! business plan contest is modeled after the Wisconsin Governor’s Business Plan Contest, giving middle- and highschool students a chance to hone their entrepreneurial skills and develop ideas related to science and technology. It’s open to students in public and private schools as well as those who are home-schooled, with the option for individuals or teams to compete. 

The first phase of the contest will require students to submit a 250-word summary through an online portal. Those selected to advance to the second phase will be tasked with drafting a longer executive summary for their business plan by late April. 

The winning student or students will present their idea at the Tech Council’s Wisconsin Entrepreneurs’ Conference in June. 

“Levering technology, thinking creatively and working as a team are all important characteristics for today’s entrepreneurs,” Tech Council President Tom Still said in a release. “Entrepreneurial skills are vital to the long-term success of Wisconsin’s youth, as well as the state’s innovation economy.”

See more contest details here: https://www.wisbusiness.com/2022/wisconsin-technology-council-back-to-business-students-have-month-to-enter-wisconsin-yes-business-plan-contest-online/ 


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<i>See these and other press releases: 

https://www.wisbusiness.com/press-releases/ </i>

Wisconsin Technology Council: Back to business: Students have month to enter ‘Wisconsin YES!’ business plan contest online

Dept. of Health Services: Families with children who did not receive free or reduced price meals at school due to COVID-19 will receive food benefits