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Jobs added to Eau Claire's fall referendum
  • Updated

EAU CLAIRE — Two more jobs were added Tuesday afternoon to a referendum the city government will put to Eau Claire voters on Nov. 8.

Before approving the wording of ballot question, the City Council added another police officer and firefighter/paramedic to the list of positions that would be funded by new property tax dollars.

“I know finances are tight, and I’m not trying to make our community pay any more than what they’d like to,” Councilman Roderick Jones said, “but I think it’s important that when we’re talking about police and fire that we’re doing as much as we can.”

The council voted 8-0 — council members Emily Berge, Andrew Werthmann and Joshua Miller were absent Tuesday — on a referendum asking voters for $1.45 million annually to pay for 15 new public safety jobs.

Those positions are six firefighter/paramedics, six police officers — including a sergeant, two full-time civilian community service officers and an associate position in the 911 dispatch center.

If approved by voters, the referendum would add about $44 to the property tax bill on a $194,000 home, which is the current median residential property value in Eau Claire.

Going into Tuesday’s meeting, City Manager Stephanie Hirsch had proposed a $1.25 million referendum with 13 jobs for the council to consider. That would’ve added about $38 to the tax bill on a median-valued home.

However, council members indicated they’d heard more about the strain that stagnant staffing levels in the police and fire departments have had on current employees who handle emergency calls in a growing city.

“We can’t continue to push to ask more and demand more without some support from this community,” council President Terry Weld said.

He called the referendum “a fair amount” for the safety and peace of mind provided by people who look out for city residents during every hour and every day of the year.

Councilman Charlie Johnson said he agreed to add the two positions to the referendum to get closer to what the police and fire departments need for staffing. Johnson added that also means the city wouldn’t come back a few years from now to ask voters to fund more positions.

“I kind of view the referendum as a one-time option,” he said.

Now that the council has set the wording of the fall referendum, the city’s elected officials said they will be heading up an effort to inform voters about the need for the new positions.

In addition to the city referendum, the Nov. 8 election is also anticipated to include a ballot question from the Eau Claire school district as well as numerous local, state and congressional seats on ballots.

Other business

Also during Tuesday’s council meeting:

• Country Jam USA’s plans to relocate to land at the southwest corner of Highway T and 20th Avenue gained unanimous approval from the council in the form of a rezoning vote. The music festival’s owners are planning to host additional outdoor concerts there, but agreed Tuesday to limit those events to a maximum of 20 days of outdoor music per year in response to neighbors’ concerns about noise.

• Phoenix Parkside II, a five-story apartment building planned in a downtown redevelopment lot, will get $2.6 million in city assistance through a tax increment financing district. A development agreement approved by the city requires the building’s developer to guarantee the property value will be at least $26 million and 20% of the apartments will have rents affordable to people making 80% or less of the county median income.

Walking with the pack

James Grassnickle, left, walked his three husky mix dogs with his son Michael Wilde and his two American pocket bully dogs along the Chippewa River Trail in Eau Claire on Monday.

US economy sending mixed signals

WASHINGTON (AP) — The U.S. economy is caught in an awkward, painful place. A confusing one, too.

Growth appears to be sputtering, home sales are tumbling and economists warn of a potential recession ahead. But consumers are still spending, businesses keep posting profits and the economy keeps adding hundreds of thousands of jobs each month.

In the midst of it all, prices have accelerated to four-decade highs, and the Federal Reserve is desperately trying to douse the inflationary flames with higher interest rates. That’s making borrowing more expensive for households and businesses.

The Fed hopes to pull off the triple axel of central banking: Slow the economy just enough to curb inflation without causing a recession. Many economists doubt the Fed can manage that feat, a so-called soft landing.

Surging inflation is most often a side effect of a red-hot economy, not the current tepid pace of growth. Today’s economic moment conjures dark memories of the 1970s, when scorching inflation co-existed, in a kind of toxic brew, with slow growth. It hatched an ugly new term: stagflation.

The United States isn’t there yet. Though growth appears to be faltering, the job market still looks quite strong. And consumers, whose spending accounts for nearly 70% of economic output, are still spending, though at a slower pace.

So the Fed and economic forecasters are stuck in uncharted territory. They have no experience analyzing the economic damage from a global pandemic. The results so far have been humbling. They failed to anticipate the economy’s blazing recovery from the 2020 recession — or the raging inflation it unleashed.

Even after inflation accelerated in spring of last year, Fed Chair Jerome Powell and many other forecasters downplayed the price surge as merely a “transitory” consequence of supply bottlenecks that would fade soon.

It didn’t.

Now the central bank is playing catch-up. It’s raised its benchmark short-term interest rate three times since March. Last month, the Fed increased its rate by three-quarters of a percentage point, its biggest hike since 1994. The Fed’s policymaking committee is expected to announce another three-quarter-point hike Wednesday.

Economists now worry that the Fed, having underestimated inflation, will overreact and drive rates ever higher, imperiling the economy. They caution the Fed against tightening credit too aggressively.

“We don’t think a sledgehammer is necessary,’’ Ian Shepherdson, chief economist at Pantheon Macroeconomics, said this week.

Here’s a look at the economic vital signs that are sending frustratingly mixed signals to policymakers, businesses and forecasters:

The Overall Economy

As measured by the nation’s gross domestic product — the broadest gauge of output — the economy has looked positively sickly so far this year. And steadily higher borrowing rates, engineered by the Fed, threaten to make things worse.

“Recession is likely,’’ said Vincent Reinhart, a former Fed economist who is now chief economist at Dreyfus and Mellon.

After growing at a 37-year high 5.7% last year, the economy shrank at a 1.6% annual pace from January through March. For the April-June quarter, forecasters surveyed by the data firm FactSet estimate that growth equaled a scant 0.95% annual rate from April through June. (The government will issue its first estimate of April-June growth on Thursday.)

Some economists foresee another economic contraction for the second quarter. If that happened, it would further escalate recession fears. One informal definition of recession is two straight quarters of declining GDP. Yet that definition isn’t the one that counts.

The most widely accepted authority is the National Bureau of Economic Research, whose Business Cycle Dating Committee assesses a wide range of factors before declaring the death of an economic expansion and the birth of a recession. It defines a recession as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.”

In any case, the economic drop in the January-March quarter looked worse than it actually was. It was caused by factors that don’t mirror the economy’s underlying health: A widening trade deficit, reflecting consumers’ robust appetite for imports, shaved 3.2 percentage points off first-quarter growth. A post-holiday-season drop in company inventories subtracted an additional 0.4 percentage point.

Consumer spending, measured at a modest 1.8% annual rate from January through March, is still growing. Americans are losing confidence, though: Their assessment of economic conditions six months from now has reached its lowest point since 2013 in June, according to the Conference Board, a research group.


What’s agitating consumers is no secret: They’re reeling from painful prices at gasoline stations, grocery stores and auto dealerships.

The Labor Department’s consumer price index skyrocketed 9.1% in June from a year earlier, a pace not seen since 1981. The price of gasoline has jumped 61% over the past year, airfares 34%, eggs 33%.

And despite widespread pay raises, prices are surging faster than wages. In June, average hourly earnings slid 3.6% from a year earlier adjusting for inflation, the 15th straight monthly drop from a year earlier.

And on Monday, Walmart, the nation’s largest retailer, lowered its profit outlook, saying that higher gas and food prices were forcing shoppers to spend less on many discretionary items, like new clothing.

The price spikes have been ignited by a combination of brisk consumer demand and global shortages of factory parts, food, energy and labor. And so the Fed is now aggressively raising rates.

“There is a risk of overdoing it,’’ warned Ellen Gaske, an economist at PGIM Fixed Income. “Because inflation is so bad right now, they are focused on the here and now of each monthly CPI report. The latest one showed no letup.’’


Despite inflation, rate hikes and declining consumer confidence, one thing has remained solid: The job market, the most crucial pillar of the economy. Employers added a record 6.7 million jobs last year. And so far this year, they’re adding an average of 457,000 more each month.

The unemployment rate, at 3.6% for four straight months, is near a half-century low. Employers have posted at least 11 million job openings for six consecutive months. The government says there are two job openings, on average, for every unemployed American, the highest such ratio on record.

Job security and the opportunity to advance to better positions are providing the confidence and financial wherewithal for Americans to spend and keep the job machine churning.

Still, it’s unclear how long a hiring boom will last. In keeping up their spending in the face of high inflation, Americans have been drawing down the heavy savings they built up during the pandemic. That won’t last indefinitely. And the Fed’s rate hikes mean it’s increasingly expensive to buy a house, a car or a major appliance on credit.

The weekly number of Americans applying for unemployment benefits, a proxy for layoffs and a bellwether for where the job market may be headed, reached 251,000 in the most recent reading. That’s still quite low by historic standards, but it’s the most since November.


COVID-19 kept millions of Americans cooped up at home. But it didn’t stop them from spending. Unable to go out to restaurants, bars and movie theaters, people instead loaded up on factory-made goods — appliances, furniture, exercise equipment.

Factories have enjoyed 25 consecutive months of expansion, according to the Institute for Supply Management’s manufacturing index. Customer demand has been strong, though supply chain bottlenecks have made it hard for factories to fill orders.

Now, the factory boom is showing signs of strain. The ISM’s index dropped last month to its lowest level in two years. New orders declined. Factory hiring dropped for a second straight month.

A key factor is that the Fed’s rate hikes are heightening borrowing costs and the value of the U.S. dollar against other currencies, a move that makes American goods more expensive overseas.

“We doubt the outlook for manufacturing will improve any time soon,’’ Andrew Hunter, senior U.S. economist at Capital Economics, wrote this month. “Weakening global growth and the drag from the stronger dollar look set to keep U.S. manufacturers under pressure over the coming months.’’


No sector of the U.S. economy is more sensitive to interest rate increases than housing. And the Fed’s hikes and the prospect of steadily tighter credit are taking a toll.

Mortgage rates have risen along with the Fed’s benchmark rate. The average rate on a 30-year fixed-rate mortgage hit 5.54% last week, nearly double its level a year earlier.

The government reported Tuesday that sales of new single-family homes fell 8% last month from May and 17% from June 2021. And sales of previously occupied homes dropped in June for a fifth straight month. They’re down more than 14% from June 2021.

In response to the rapidly slowing home market, builders are cutting back. Construction of single-family homes dropped last month to its lowest level since March 2020, at the height of pandemic lockdowns.

Retailers contest upcoming property tax bills in Eau Claire
  • Updated

EAU CLAIRE — Three big-box retailers are again suing the city government in an attempt to lower property taxes on their stores in Eau Claire.

Filed last week in Eau Claire County Court, the lawsuits contend that the Walmart, Sam’s Club and Scheel’s All-Sports stores on Eau Claire’s south side were valued too highly by the city for tax purposes.

Attorneys Christopher Strohbehn and Russell Karnes of Milwaukee law firm Gimbel, Reilly, Guerin & Brown represent the retailers in all three lawsuits.

The lawsuits claim the retailers’ 2022 tax bills — which won’t be issued until late this year — are excessive due to overassessment by the city.

The city assessed the Scheel’s store at 4710 Golf Road — an anchor location at Oakwood Mall — at almost $6.79 million, but the Fargo, N.D. sporting goods chain contends it should be valued at $3.8 million.

Walmart’s 3915 Gateway Drive location is assessed by the city at $12.44 million, but the Bentonville, Ark.-based retail giant argues it should only be valued at $8.54 million.

Next door, the Sam’s Club at 4001 Gateway Drive is assessed at $6.85 million, but the wholesale club store says it should just be $3.5 million.

Based on those amounts, Scheel’s is seeking a 44% tax break, Walmart wants 31% off its bill and Sam’s Club contends it should be paying 49% less.

As of Tuesday, the city had not yet been formally served the lawsuits, but has experience with similar claims filed by retailers in the past.

City Attorney Stephen Nick said the city assesses properties according to state law and based on market values so all owners pay their fair share in taxes.

“The reduction in taxes these commercial property owners seek are unwarranted and would unfairly shift taxes to small businesses and residential taxpayers,” he said in an email to the Leader-Telegram.

The three retail chains have sued Eau Claire previously with similar claims and some of those cases are still pending.

Scheel’s filed suit against Eau Claire over its 2020 and 2021 taxes. Those two cases were consolidated into one and have an upcoming pretrial conference on Oct. 27.

Both Walmart and Sam’s Club have lawsuits pending over 2021 property taxes on their Eau Claire stores, but settled with the city for prior years.

Though it had been seeking a much bigger cut, Walmart agreed to a 4% tax refund on its bills for 2017 to ‘19 in a settlement approved by the city in April 2020. Similarly, Sam’s Club agreed early last year to settle for a 2% refund in its 2019 property taxes.

The latest lawsuits came as tax bills for the three stores fell on their own this year due to the city’s 2021 revaluation of property. Residential property values grew by a much larger degree due to the hot housing market in recent years compared to lower appreciation of commercial real estate.

Eau Claire home values rose by an average of 23% in last year’s revaluation. Online property tax records show the value of Sam’s Club grew 4%, Walmart by 3% and Scheel’s actually dropped 5% in that time.

As a result of the stores growing less in value than homes, the retailers are paying less in taxes.

The $118,659 tax bill for the Scheel’s store is the lowest it has seen since 2009, according to online records. Walmart and Sam’s Club were billed $217, 385 and $119,698, respectively — the lowest shown in online records going back to 2007.