WHEN WILL THE HOUSING SLUMP END?

Contributed by Joel Sullivan, Partner Buena Vista Investment Management
New home construction represents about 5% of the overall US Gross Domestic Product ( GDP). Historically, economic recoveries are not sustainable without a recovery in housing. So, with housing being an important factor to economic growth, the question is…when will the slump end?

It was reported this week that average home prices declined 3.1% from last year to this year. This is based on the S&P/Case- Shiller Home Price index , the leading measure of U.S. home prices. This index is based on a composite of 20 metropolitan areas. Even more dramatic, is that from the peak in 2005, average home prices are down over 20%. Home prices in Wisconsin have declined about 14% from the peak, according to statistics compiled by the Wisconsin Realtors Association.

Additionally, the building of new houses continues to decline. We reached a peak of activity in 2006, with over 2 million units being built. The latest statistics indicate an annual level of activity of about 400,000. In Wood county there were only 36 new permits applied for in 2010, which was a decline from the previous year of 26%.

As first glance, these two sets of data, price and building declines, appear to be bad news, and in the near term they probably are. The housing slump has definitely been a drag to the US economic recovery. While many parts of the economy have rebounded, housing has not. One of the issues limiting this recovery is the excess supply generated by over-building in the early 2000’s. In order to see a recovery in the housing market, we need to see a reduction in inventory. Fortunately, there has been some good news on this issue.  In February, new home inventories declined from the previous month on a non-seasonally adjusted basis. New home inventory has now recorded 42 straight months of declines, (based on US census data), and has not recorded a monthly increase since May 2007. New home inventory levels are at new all time record lows. This is good news for the housing market.

The upside to less homes being built and lower prices is we should continue to work off the excess inventory/supply in the marketplace. We have also been seeing modest improvements in employment, which should help home sales. For 2011, it will be important to monitor the housing statistics going forward and to pay especially close attention to housing sales this summer when the Federal Reserve’s QE2 program is scheduled to end. While the trend is improving, current data suggests that we will not see a significant recovery in housing for some time to come. This is likely to continue to put a drag on overall economic growth.

In summary, it appears prices may be close to a bottom. Combine that with the likelihood that mortgage rates will be higher in the very near future. And we come to the conclusion that for someone looking to buy a house, this may be one of the best opportunities they will see for a long time.

For more information on investments, contact Buena Vista Investment Management LLC
241 3rd Street S. , Wisconsin Rapids, WI 54494   715-422-0700

Krug believes in Truth in Sentencing

REPRESENTATIVE KRUG SUPPORTS REPEAL OF THE EARLY RELEASE PROGRAM

Madison – State Representative Scott Krug co authored legislation that will repeal former Governor Jim Doyle’s Early Release program.

“With my background in law enforcement, I was shocked at the utter disregard the 2009-2011 budget policy item (aka “Early Release”) had for the public safety,” states Krug. “The public was denied the opportunity to give input on this part of the bill because it was shoved through within 24 hours. I feel now I can right that wrong.”

The Early Release program allows convicted criminals – including felons to significantly reduce their sentences through good behavior.

The program also took authority away from the judges who oversee our judicial system and left their fate to political appointees under former Gov. Doyle and government bureaucrats.

“Holding criminals accountable for their actions is right for the safety of Wisconsin,” states Krug. “Allowing criminals to be released early is sending a very dangerous message and I want it stopped.”

Budget Threatens Wisconsin Values

by State Senator Julie Lassa

Traditionally, the two-year budget offered by a Wisconsin governor is a statement of the administration’s values and priorities, especially during hard times.  Last session, Democrats balanced a budget with a shortfall nearly twice the size of the one facing Governor Walker. We did so without raising taxes on the middle class while also protecting education, municipal services, health care, and our natural resources.   However, Governor Walker’s budget proposal shows a great difference in priorities and values.

Ever since Tommy Thompson created BadgerCare, Wisconsin has been a leader in providing access to health care.  Governor Walker would end that tradition by dramatically cutting SeniorCare, BadgerCare, FamilyCare and Medicaid by half a billion dollars.  As many as 70,000 Wisconsin seniors, children and others may lose their health care as a result.  At the same time, the Governor raids a $20 million surplus from SeniorCare and forces thousands of seniors off SeniorCare into the federal Medicare Part D prescription program that costs more and provides less.  This amounts to a hidden tax that will cost seniors on average more than $500 a year.

One thing nearly all Wisconsinites agree on is the importance of education.  That’s why our state’s educational institutions, from K-12 schools to our colleges and universities, have been some of the best in the nation.  But Governor Walker proposes slashing funding for our public schools by nearly a billion dollars.  The only way for school districts to cope with these cuts is by eliminating programs, laying off staff and closing schools.

Under the Governor’s proposal, Stevens Point schools will lose more than $15 million, while Marshfield schools will lose about $8 million, and Wisconsin Rapids schools will lose about $10 million.  Cuts of similar proportions threaten our rural school districts as well, many of which are already struggling to keep schools open.  The damage these cuts will do extends beyond simply making it harder for kids to get a good education.   Because education is crucial to economic development, Wisconsin’s economy will suffer in the future because of the Governor’s short-sighted proposal.

And while the Governor’s budget guts public education, it gives wealthy families in Milwaukee taxpayer money to send their kids to private schools.  It’s not fair to make central Wisconsin taxpayers subsidize tuition for Milwaukee’s well-to-do while our own children’s education suffers.

Higher education is also hit hard.  The quarter billion dollar cut to the UW System will put the quality and affordability of a college education at risk, especially for working families.  The Governor’s proposal cuts technical colleges by 30 percent despite record enrollments as unemployed workers prepare for new careers. These cuts will jeopardize their ability to update their skills and get a new job to support themselves and their families.

Another Wisconsin value is preserving our natural resources.  Under both Republican and Democratic governors, we have historically expanded protections for our air, water and wild spaces.  Governor Walker’s budget ends support for recycling programs. It reverses pollution protections that reduce toxic algae blooms in our lakes and rivers.  It ends programs to promote renewable energy and energy efficiency, eliminates farmland preservation, and weakens the Stewardship Fund which sets aside land for hunting, fishing and public enjoyment.  The natural resources that contribute so much to our quality of life and our vital tourism economy are endangered by this budget.

I urge you to go to the Legislative Fiscal Bureau web site, legis.wisconsin.gov/lfb, where you can download copies of the budget and summary reports that explain its provisions and impacts.  Attend the Joint Finance Committee hearing at UW-Stevens Point on April 7th from 10 am to 6 pm to give your opinion on the budget.  Contact your state elected officials to let us know your thoughts.  Contact me at Sen.Lassa@legis.wi.gov or 800-925-7491; Governor Walker at govgeneral@wisconsin.gov or (608) 266-1212; Representative Krug at Rep.Krug@legis.wi.gov  or (888) 529-0072 ; Representative Molepske at Rep.Molepske@legis.wisconsin.gov or (888) 534-0071 or ; and Representative Vruwink at Rep.Vruwink@legis.wisconsin.gov or (888) 534-0070.

It is possible to balance the budget while still preserving the values that make Wisconsin great.

ZAXX receives recognition as a “Company to Watch” for 2011

Zaxx Technology Specialists, 240 W. Grand Ave., received recognition as part of the Wisconsin Companies to Watch program, which recognizes mid-sized businesses for innovation.

Administered locally through the Wisconsin Entrepreneurs’ Network, the Companies to Watch program is a nationwide initiative sponsored by the Edward Lowe Foundation that recognizes privately held, second-stage companies.

Second-stage companies are those that already have a working business plan, employ 10 to 99 people and have an annual revenue of $750,000 to $50 million.

Award recipients can attend a three-day leadership retreat at the Edward Lowe Foundation’s headquarters in Michigan to help them network with other second-stage businesses and accelerate their growth, according to the foundation. They also gain access to a yearlong peer learning group.

With plans to implement Zaxx for Business, a division dedicated to bringing information technology systems to businesses and nonprofit organizations, Vruwink hopes to launch a new product called Zaxx Care. It will introduce information technology systems to businesses and nonprofit organizations by creating a partnership with Google Apps, a collection of online tools for businesses.

The Big Eau Plaine and its fish kill problem

During the winter of 2008-2009 there was a massive fish kill on the Big Eau Pleine reservoir in central Wisconsin. The DNR estimated the kill at about 75% of the fish population. Historically the fishery is great; then it crashes due to a loss-of-oxygen kill. Since 1937 there have been fish kills of varying severity every 3 to 4 years on average.

The loss-of-oxygen causes are normally the same. Excess nutrients and organic material from runoff pollution cause algae to bloom in the summer and then die in winter, consuming available oxygen and causing the fish to suffocate. Low reservoir water levels going into the winter have been shown to be a major contributing factor. In recent years a neglected aerator contributed to the problem (repairs of $60,000+ were required).

After the fish kill, BEPCO (Big Eau Pleine Citizens Organization) rallied to “never let this happen again”. BEPCO held a symposium inviting members of the DNR, Marathon County, WVIC (Wisconsin Valley Improvement Company), local, State and Federal government officials, the press and the public. As a result, Marathon County set up a “Task Force” that continues to work on these issues. We have rebuilt the aerator to provide a limited fish refuge during the worst of the winter.

The experts expect it will take decades and millions of dollars to fix the excess nutrient/pollution problems. But there is way to stop the fish kills now! BEPCO analyzed the last 41 years of operating data on the Big Eau Pleine Reservoir. We found that if the reservoir is 60% full or more at the start of winter, and it is not drawn down below 20% full by the end of winter, then the chances for a fish kill are extremely small. WVIC can change their operating methods to do this!

WVIC built the Big Eau Pleine and other reservoirs in northern Wisconsin to store water when it is wet and release it when it is dry. This helps level the Wisconsin River flow to maximize the generation of hydroelectric power and reduce flooding. Water is also released from the reservoirs to provide a DNR required minimum flow in the river that protects the river fishery by diluting the remaining allowed effluent pollution from industries and communities.

More water than necessary is now routinely released from the reservoir in early summer per WVIC’s operating policy. This water can be saved to make sure the reservoir is kept at 60% full or more at the start of winter. This water can then be released during the winter. The change can be done without risk to the minimum river flow and without taking any more water from the reservoirs up north. Little if any hydropower generation is likely to be lost. BEPCO calls this “The 60% Solution”.

A change in WVIC’s operating license needs to be made to allow this to happen. There is a license review period happening during the first half of 2011 where anyone can comment on needed changes to WVIC’s operation of the Big Eau Pleine reservoir. BEPCO and other groups will recommend changes.

Based on economic studies of other lakes in Wisconsin, we estimate the positive economic impact to the central Wisconsin area of fishing on the Big Eau Pleine to be $2 million per year! Much of this money and the recreational benefits are lost for years when there is a serious fish kill like 2 winters ago!

You can help by asking WVIC to step up as a good environmentally concerned neighbor and improve their operating model to save enough water for the fish to live! Send a message to your legislators also.

Do we need a State Treasurer or a Secretary of State?

Representative Krug sponsors legislation to let the voters decide if we need a State Treasurer or a Secretary of State
Smaller government was always the goal of Representative Scott Krug and State Treasurer Kurt Schuller

Madison – State Treasurer Kurt Schuller has enlisted the help of Representative Scott Krug to let the voters decide whether we truly need a State Treasurer or a Secretary of State.

In response to the announcement of the bill, Rep. Krug stated, “This bill is about reigning in spending at all levels of government. The purpose of this legislation is to give the voters of the State of Wisconsin a direct say in if these positions are needed.”

“I met Kurt Schuller last fall on the campaign trail. He proposed then to get rid of the State Treasurer position and I respect that he is living up to that promise. I look forward to spirited debate on this issue,” states Krug. “It’s clear to me that voters spoke on this issue when Kurt was elected and we will let them do so again.”

Night vision goggles aid in safety for Spirit

If there’s one word to describe Ministry’s Spirit Medical Transportation Service (MTS) Eurocopter 145, it’s “safe.”

From night vision goggles to a dual hydraulic system to state-of-the-art avionics package, everything is focused on “safety.”

“Safety is what it’s all about,” said Nils Strickland, pilot with Spirit MTS. “The advanced equipment and technology on this EC 145 aircraft doesn’t mean that we make flights we normally wouldn’t make, but they enhance the level of safety for the flights we do make.”

Other technologies include multifunction displays for terrain awareness warning and traffic collision avoidance systems, satellite weather information, navigation charts and real-time radar.

The EC145, in use now for nearly a year, is powered by two Turbomeca ARRIEL engines and is especially designed for emergency medical service missions. It is single pilot Instrument Flight Rated and has a cruise speed of 133 kts (about 153 miles per hour).

Most recently, the crew has trained to become proficient in using night vision goggles, in part to aid in establishing landing zones.

“The goggles give us a whole new perspective of what’s going on outside of the aircraft at night,” said Strickland. “They magnify the light that is already out there and give us a lot of detail of any hazards, such as power poles, trees or road signs. They are especially helpful for scene calls.”

One example that came to the mind of Greg Rosenthal, Spirit paramedic, was a call in early December in the Thorp area. A hunter had fallen from a tree stand, and had been suspended in a harness 25 feet up for most of the day, in subfreezing temperatures. He suffered from severe hypothermia.

“The Thorp Fire Department did an excellent job setting up the landing zone, on a rural county road,” Rosenthal said. “But it was a hard landing zone, because there were trees on both sides of the road, and power lines on one side. With the goggles on, we had increased ability to see the obstacles and were able to land in a significantly tight area.”

The landing and liftoff went smoothly and the patient was safely transported to Ministry Saint Joseph’s Trauma Center. He was able to be discharged the next day.

The goggles also help in identifying possible severe weather.

“When flying at night, where there are no surface lights, the first thing that disappears is the horizon,” said Strickland. “With the goggles, we can see the ground, the horizon and the cloud base. We can see where the cloud ceiling is, and if there are rain or snow showers, so we can avoid them.”

“The EC145 is among the safest and reliable helicopter out there. It has become the aircraft of choice for emergency medical services because of its maximum flexibility and configuration,” said Monty Gallegos, Director of Spirit MT. “We are confident that it will continue to allow us to provide the safest, highest quality medical transport to meet the needs of our growing service area.”

MSTC Foundation Offers Over 30,000 in Scholarships for High School Seniors!

Celebrating 30 Years of Scholarships – Application Deadline is April 7

WISCONSIN RAPIDS – In celebration of 30 years of scholarships, the Mid-State Technical College Foundation Board of Directors is pleased to announce that an additional $30,000 has been allocated to its scholarship budget and available for the upcoming academic year.

Scholarship application periods during 2011 will include extensive opportunities for new and continuing, full- and part-time students to receive increased awards. Several scholarships are valued at $3,000. Submissions for these “anniversary” awards will be accepted in written and video format, and will challenge entrants to answer questions about their life and their dreams.

Currently, several scholarships are available to graduating high school seniors who will attend MSTC as a full-time program student in August. Four scholarships are valued at $3,000 each and 21 are valued at $1,250 each. Interested graduating seniors are encouraged to visit the college’s website at  http://www.mstc.edu/about/foundation.htm for applications and procedures. Application forms for each scholarship are also available by request via email at foundation@mstc.edu or telephone (715) 422-5322. The application deadline is Thursday, April 7.

Completed applications can be submitted to: Celebrating 30 Years, MSTC Foundation Office, 500 32nd Street North, Wisconsin Rapids, WI 54494. All application materials are due April 7, 2011.

Boys & Girls Club attempts to break jumping jack record!

BOYS & GIRLS CLUB JOINS EFFORT TO BREAK GUINNESS JUMPING JACK RECORD!

On March 22nd at 5:30 PM Boys & Girls Clubs across America, including Clubs in Portage County, will strive to break the Guinness Book of World Records by simultaneously performing Jumping Jacks for two consecutive minutes! Any youth interested in participating should go to the Plover Boys & Girls Club at 5:00pm, 2401 Cedar Dr., Plover, WI 54467.  Jumping Jacks will begin at 5:30pm.

$64 Million Budgeted for New Armory

Sen. Lassa got project enumerated in the 2009-2011 budget

Madison — The Wisconsin Department of Administration’s capital budget request includes just over $64 million to construct a National Guard Readiness Center and Field Maintenance Shop in Wisconsin Rapids. The request expands on the funding secured in the 2009-2011 state budget by State Senator Julie Lassa (D-Stevens Point).

“I’m glad to see this project is moving ahead,” Lassa said.  “It will bring much-needed construction jobs into the area and improve the readiness of the National Guard units stationed here.”

Sen. Lassa helped secure more than $41 million in funding (including $13,000,000 in state and $28,400,000 in federal funds) in the current budget.  Preliminary design estimates and program review have increased the total cost of the project to $64,092,000.  Those funds will purchase 25 acres of land and build a 96,500 square foot Readiness Center and a 24,800 square foot motor vehicle storage building to provide storage space for the new facility.

Construction on the project is scheduled to begin in March, 2012, and will take about a year to complete.

“This project will bring tens of millions of federal funds into the community to replace the current World War I-era building that’s in very poor shape,” Lassa said. “Our National Guard units there need larger and more technology-friendly facilities to help them confront their missions overseas, and the high-tech equipment stored at the armory needs climate-controlled storage that the current building can’t provide.  A more accessibly armory will also make the building more useful to groups like the Red Cross, the Civil Air Patrol, and local non-profit groups.”

The request now goes to the State Building Commission for final approval.