Hopes are High in the Wisconsin Dells

After a year of lakes draining and unemployment rising, the business owners of the Wisconsin Dells resorts, theme parks and attractions, are ready to come back and give customers what they have always asked for: a good time.

A view of Lake Delton following the release of water on June 9, 2008

Nearly one year ago, on June 9, 2008, a heavy storm passed through central Wisconsin causing Hwy A to collapse and release the 267 acre Lake Delton into the Wisconsin River.  Lake Delton, a centerpiece of the tourism industry in the Wisconsin Dells and to the state of Wisconsin, provides opportunities for all ages with boat tours, water attractions, and many great beaches.  With the loss of the lake came the destruction of businesses and homes in addition to the lost revenue from thousands of tourists that visit the area each summer.

A major plan for the rebuilding effort was underway within days of the disaster at Lake Delton and work crews started to rebuild the dam only a month after the water was drained.  By the end of the year, the road was rebuilt and the refilling process began by diverting water from the nearby Mirror Lake.  Tom Diehl, president of the Tommy Bartlett Show and Lake Delton Village Trustee, told the Milwaukee Journal Sentinel, “[for] the 21 resorts, two restaurants, two marina operators, the Ducks and Tommy Bartlett Show, this has been a morale booster.”

Many of the businesses on Lake Delton were closed for the 2008 season, and those that remained open suffered major losses compared to their normal income.  At the nearby Lakeside Motel, revenues dropped 70 percent last summer, requiring owner Christine Nowak to dip into her retirement savings to keep the business in operation.  Looking to the 2009 season, bookings are still low and Nowak said, “It’s kind of scary, to be honest. Hopefully, people will come.”

Not all businesses suffered a loss in 2008, in fact many saw gains as the entire area took in over $1.07 billion in tourism money, a 3.9 percent increase over 2007.  Even with a slight rise in revenues, the number of indoor water parks has grown from one in 1994 to over 20 currently in operation, giving tourists more options to choose from for their vacations.  This is helpful to the Wisconsin Dells economy, but it is slowly taking away business from the small motel operators, including many around the Lake Delton areas, as tourists want to stay at the larger and newer hotels with indoor water parks.

As the economy began to sink in September, the Kalahari was in the middle of a $20 million expansion project to add an indoor amusement park to their large indoor water park and resort.  The Kalahari owners found that in the middle of the economic downturn, many of the best construction workers in the industry were available to work at their theme park expansion.  Bill Kolar, project manager for the Kalahari expansion said, “We were fortunate to be working with the A-team.”  This helped to speed up project in order to finish on time for the grand opening during the Christmas season of 2008.

Business owners in the Lake Delton area are now faced the challenge of reopening their businesses amidst a struggling economy where people are not spending outside of the necessities they use.  This summer hotel owners will need to be creative like they were last summer in order to lure customers in and spend money for a day at the water park.  At Noah’s Ark Water Park, they are offering discount advance tickets through 380 Kwik Trip convenience stores in Wisconsin and eastern Iowa to spark sales.  Co-owner Tim Gantz said, “It’s the biggest such promotion ever done by Noah’s Ark.”

The Tommy Bartlett Water-Ski Show in 2007.

The Tommy Bartlett Water-Ski Show, an anchor business on Lake Delton, will re-open this Friday, May 22 with a show that is sure to astound audiences of all ages.  In addition, the famous Wisconsin Dells Ducks will make a reappearance in Lake Delton, and many outdoor theme parks in the area will open for business over the upcoming holiday weekend.  Although it is hard to predict how this economy will affect revenues at the Dells, Todd Nelson, President at the Kalahari Resort reminded the Daily Reporter, “Conventional wisdom about the Dells is that a slow economy can help business.  Since people don’t have thousands of dollars to spend on a week at Disney World, they’re more inclined to drive to a resort and spend a weekend.”  Many of the visitors to the Wisconsin Dells come from short distances including the Twin Cities, Milwaukee and Chicago according to the Wisconsin Dells Visitors Bureau.

For now, resort owners will have to wait with anticipation and see what the season brings.  Joe Eck, general manager at Wilderness Hotels and Resorts, remains hopeful and said, “I think there’s just a real buzz, guests want to come back and see this lake that was built in 11 months.”

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Wisconsin Dairy Industry Faces a Challenge

The dairy industry Wisconsin has been an important part of the state economy for hundreds of years, but dairy farmers across Wisconsin are struggling to survive in the current markets.

The dairy industry has changed from a time where there were over 170,000 farms in 193o to a point where there are currently just over 13,000.  Many of the farms in the early days were small and family owned in comparison with the large commercial operations spread across the state today.  With the large operations come expensive milking machines, advanced farm equipment, and specialized feed mixtures.  These added expenses have created a market for farming with a much different financial structure than the simple family owned farms.

The Capital Times reported that dairy farmers are not suffering from the cost of loans and lost property values like the rest of the United States; instead, they are watching the price of dairy as it has steadily dropped over the past year.  The National Milk Producers Federation has reported a 50% decrease in the price of milk since this time one year ago.  When combined with higher feed prices for corn and other materials, the situation does not currently look too good for farmers in Wisconsin.

In the past, farmers have seen many depressions and the disturbances that it can cause to the business, but usually in the end they are able to emerge and regain the lost profits.  Five years ago, milk prices were lower than the current prices and dairy farmers were able to make adjustments and most were able to emerge.  Dairy farmers will need to use the lessons they have learned through previous depressions to once again push through this and make it into a period of economic growth.

The outlook for the remainder of 2009 looks a bit brighter for farmers and should hopefully help to rebound them on the path to a profit.  Dairyline.com reported an increase of 25% in the price of milk from January 2009 to December 2009.  This number should be encouraging to dairy farmers, despite the fact that feed prices do not seem to be lowering anytime in the near future.

Efforts are underway to help farmers improve efficiencies and cut costs by reducing the amount of emissions created by farmers.  Consumers have increasingly demanded dairy products that are produced using sustainable methods.  Technical research to accomplish this has helped to reduce the carbon footprint that farms are leaving and additionally has helped farmers to reduce their expenses in producing dairy.

The agriculture community is still a very strong part of Wisconsin’s identity, and this economy will demonstrate the ability to react and adapt.

 

Uninsured Motorists on the Rise

As many families are looking at expenses to cut from the budget, insurance is surprisingly making it to the top of many peoples lists as an expense they can live without.

Currently the only two states that do not require motorists to hold liability insurance are New Hampshire and Wisconsin.  For residents living in Wisconsin, state law requires drivers to be financially responsible in case damages are caused while in a motor vehicle.  The law does not specifically declare that motorists hold liability insurance if they have financial means to pay for the damages if they are incurred.

Until the recession over the past year, the Insurance Research Council reported a steady decline in the percentage of uninsured drivers in the U.S.    As unemployment is soaring and wages are being cut, many people think that insurance is an easy expense to get rid of.  “An increase in the number of uninsured motorists is an unfortunate consequence of the economic downturn and illustrates how virtually everyone is affected by recent economic developments,” said Elizabeth A. Sprinkel, senior vice president of the IRC. “Responsible drivers who purchase insurance end up paying for injuries caused by uninsured drivers.”

A recent report by MSNBC indicated that by next year 1 out of every 6 drivers on U.S. roads will be uninsured if the rates continue to rise at the current rapid rate.  That will put about 33 million drivers on the road by the end of the year without any type of liability insurance.  Many insurance agents like Chris Pringle, owner of All American Insurance Agency in Little Rock, Ark., thought that insurance was a recession-proof business “because insurance is required for everyone to have,” yet he has seen 20 percent of policies dropped or unpaid in the past few months.

Many people do not think of the long term consequences associated with eliminating their coverage or reducing it to state minimums in states that require a liability insurance for motorists.  Motorists that are in an accident or even pulled over for a traffic violation may face legal fees, fines, penalties, and even a suspension of license according to Elaine Zeinner, a spokeswoman for AAA.  In the short term the cost advantages will be small and in the long term, there are chances for very large expenses without any insurance to cover them.

On March 2, 2009, Wis. Gov. Jim Doyle proposed an increase in minimum auto coverage levels to bring them in line with current prices.  The current law was put in place 28 years ago and lawmakers argue that with current levels of inflation, the minimums are too low to cover expenses.  The increase in cost may cause even more people to forego insurance and rely on pocket money if they happen to be in an accident.

It is important that motor vehicle operators consider decisions now reguarding insurance before they find themselves in a more expensive option down the road.

 

M&I Bank Posts Loss

Marshall & Ilsley Corp. of Milwaukee posted a net loss of $116.9 million on Thursday morning with the release of their quarterly financial reports.

M&I has reported losses in three of the last four quarters as the banking industry is continuing to struggle in an economy with very little spending.   According to a recent poll by Gallop, consumer spending has dropped by more than 50% between Jun 2008 to Apr 2009.  The decrease in comsumer spending has reduced the amount of loan’s granted, especially in the housing market, and has caused many loan customers to default on payments.

M&I’s headquarters is in Milwaukee Wis., with banking operations in Arizona, Florida, Indiana, Minnesota, Missouri, and Nevada.  Loan repayment has been especially hard in Arizona and Florida where real estate developers are not selling homes at the prices they paid for them.  In a recent article for the Orlando Sentinel, Lake County Fla. reported record numbers of foreclosures.  Barbara Shivers told the Orlando Sentinal “After the last two years, we anticipated that there might be a little drop-off, but that hasn’t happened.”

Corporate salaries and employee benefits in the first quarter of 2009 were reduced by $19.5 million, an 11% decrease over the same quarter in 2008.  The reduction of these expenses helped to cover the $25 million in repayments of the 1.7 billion from the Troubled Assets Relief Program (TARP) that M&I received over the past year.

Following the results, M&I (NYSE: MI) stock prices fell from $7.20 per share to $6.91 (-3.89%).   M&I stock prices have been in constant fluctuation just like the rest of the banking industry.  In the past year, prices have steadily dropped from $29.76 to their current low levels around $5 to $7.

Despite negative financial news, Mark Furlong, President and CEO of Marshall & Ilsley Corporation said, “M&I remains well positioned to continue supporting our customers and prospects as they address the current economic environment.  Our first quarter results reflect the extent to which the current recession, and particularly the housing slowdown, continues to impact our Company. Although these are disappointing results, our excess capital, strong liquidity position, and high levels of reserves will keep us ahead of the industry’s challenges.”

 

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Gas Prices to Stay Low

With gas prices slowly rising above $2 per gallon, it’s hard not to wonder if we will once again see prices spike to the unbearable $4 per gallon that we saw less than one year ago.

There is no need to fear a $4 per gallon price this summer said Ben Brockwell, director of the Oil Price Information Service during the Wisconsin Petroleum Marketers and Convenience Store Association conference on Tuesday.  Brockwell said that businesses and consumers are using less fuel because of the push for conservation during the peak of high oil prices.  In addition, Brockwell said the rise in unemployment has created less demand for gasoline and has helped to keep the low prices at the pump.

Gas prices have slowly been on the rise since the beginning of December when the average price for a gallon of unleaded in Wisconsin was $1.72.  Many economists believe we will see prices rise slowly above the current price of $1.98, but the chance that we will see anything close to $4 in the coming months is quite unlikely.

Reduced demand is not only occuring  in the United States, global demand has seen a decrease helping to keep prices lower at the pumps worldwide.   “We have plenty of crude and plenty of spare refining capacity. Plus we are seeing global demand for gasoline slow as well,” said Phil Flynn, an analyst at Alaron Trading in Chicago.

CNN released a video at the end of 2008 describing the process of oil to gasoline and how prices are affected based on the decisons by the oil companies.

One factor in keeping the prices low was the increased sales of hybrids over the summer months of 2008.  Many Toyota dealers were unable to keep the popular Prius model in stock, and many had waiting periods as long as 4 months for those interested in the car.  Sales have recently dropped with the Prius and the Japanese government is now offering to pay incentives to customers for bringing in cars older than 13 years when they buy a new car from a Japanese firm.

If consumers remain conscious about their decisions reguarding fuel use and try to use less when it is possible, gasoline prices should remain at much lower levels this summer in comparison to a year ago.  Brockwell noted, “The price of oil eventually will go back up, but I think that’s a year or more away.”

 

Economy Falls, Divorce Rate Reacts

As money is getting sparse, some couples are resorting to divorce in hopes that their financial worries will dissapate. 

The state of the economy has shown some reduction in the number of divorces over the past few months, yet the divorce rate has continued to increase in at least a few Wisconsin counties.  Last week a story on Milwaukee’s TMJ4 newcast shed light on the increasing divorce rate in Milwaukee and Wakesha County.  When the recession started in 2007, there were 2,580 couples that filed for divorce compared to 2,600 couples in 2008.  

As the divorce rate is increasing in a troubled economy, there are less divorce lawyers representing the spouses as they take their cases to court.  Circuit Judge Michael Goulee told the Pierce County Herald, “Many couples can no longer afford family law attorneys, even though more complicated divorce cases require legal assistance.”  Many couples are finding that in these economic times it is becoming more difficult to split their assets including house, car, and finances with turbulance in the markets, requiring them to seek the assitance of a lawyer. 

The trend of divorce increasing when the economy begins to recess is not uncommon, and has been seen after the dot-com bubble burst in 2001.  As reported by the New York Times, divorce filings increased by 50% in some areas of New York between 1998 and 2001.  Reguarding the timing of divorce, lawyer Stephen W. Schlissel said, “There are a lot of spouses who think that when their business is valued at its lowest, that is the time to get out of their marriage.” 

Even though many couples have chosen to divorce in hopes of a better financial position on their own, some communities across the country and in Wisconsin have seen couples staying together in attempt to make it out of the financial crisis with a stronger marriage.  In central Florida, many people have reported not having enough money to consider divorce as a viable option.  Couples have seen home values drop, realizing that splitting their assets would be detromental to starting out with a good financial footing and thus have decided to work on improving their relationship.

Many Wisconsin divorce lawyers are unsure what the near future holds for them in their professions.   There are more reasons than ever for couples to consider divorces, but as one economic analist put it, “the result of economic turmoil, particularly in response to credit…is to bring people back to Earth. They force people to look at things reasonably, rather than through this idealistic, wholly ‘American’ view of change.”

 

Dying Winds

As renewable energy has become a forefront for Obama’s proposed energy plan over the coming years, the wind industry in Wisconsin is struggling just like the rest of the economy.

Community and county treasurers have been tightening up their spending as the economy has taken a tailspin from bad to worse.  This has led to cuts in funding for many of the wind energy projects taking place across the state.  In regards to a specific wind project in the community of Magnilia Wis, Wes Slaymaker, vice president for wind development at EcoEnergy said, “Overall, that project (Magnolia) and a number of others pretty much industry-wide have … slowed down on activity.”

Wisconsin has consistently been a leader in the wind industry, promoting the use of renewable energy whenever possible.  In a survey conducted by the American Wind Energy Association, Wisconsin was ranked as the 18th most eligible state for wind energy potential.  Currently there are over 150 wind turbines in use across the state with hundreds more being planned for installation in the near future.  This number could be in great danger if the economy continues to put a strain on the budgets of communities and energy companies.

After the economic stimulus bill was signed in February, things began to look more hopeful for those involved in the wind industry.  The bill includes provisions for tax credits to renewable energy manufacturing companies, an expansion of energy department research, and a treasury department grant program for energy developers.  It is now going to be up to the lawmakers to distribute these funds in an effective manner so states like Wisconsin can see the benefits.

In an interesting report by CNN, manufacturing plants of wind turbines in Ohio have already increased production as they see a positive outlook for the wind turbine industry.

CNN VIDEO

Wisconsin needs to follow the lead of states like Ohio and invest in the potential of wind manufacturing.  This change should start in many of the great Wisconsin universities where research can be taking place to make advancements in wind technology.  One of these advancements has come from UW-Milwaukee, where students have done research on ways to make wind turbines more effective through the variations in wind speed that are a major cause for loss of energy.  Wisconsin can also look to manufacturing jobs, like Ohio, and determine the companies that could provide the greatest contributions to wind energy.

In the next week, Wis Governor Jim Doyle is going to be the keynote speaker at the Wisconsin Wind Energy Supply Chain Seminar.  This should provide Wisconsin energy companies a hope for the future of wind production and the opportunities for jobs and manufacturing if we keep our goals set on creating renewable energy.

 

Jobs Coming to Wisconsin

As many have noticed, the theme of this blog has progressively been turning from a Wisconsin travel site to a place with Wisconsin news.  Due to a misunderstanding in the assignment, the blog formally known as “The Wonders of Wisconsin” will now be called “An Economic Snapshot of Wisconsin.”  Much of the blog will be looking at the current economic stimulus package and it’s effects on Wisconsin’s businesses and residents, but there will also be articles pertaining to general information about spending and economic stories in the state.

United States Unemployment

One of the greatest concerns of this economic crisis has been the increase in unemployment as many people have been laid off from their jobs of 10, 20, or even 30 years.  Over the past 6 months the unemployment rate has risen from 6.2% to 8.1% and without any new jobs created by the government, the numbers appear as if they would continue to rise.  Fortunately, a large portion of the stimulus plan helps to create jobs and improve benefits for the unemployed.  Those that are seeking employment in wisconsin should visit the Job Center of Wisconsin to locate the newest job listings within the state.  The site has posted around 7500 jobs in the past month in an effort to help create a one-stop location for job searchers.

Many people in the state are concerned about the states use of the economic stimulus money.  Al Fish, assistant director of the state office dealing with the stimulus money told residents that they are currently waiting for guidelines and nothing has been missed up to this point according to the AP.  Fish told reporters that many details are unknown at this point reguarding the process for states recieving stimulus money.  A large portion of this money will be directed to state projects, tax cuts, and reducing the state budget deficit.

Jobs are the number one thing on the minds of the stimulus distributors, and they are planning to act as quickly as possible to release funds into the hands of the unemployed as soon as funds are released from the federal government.  According to the plans of the stimulus, Wisconsin residents should see about 74,000 jobs saved or created.  The goal of the entire plan is to create and save three to four million jobs over the course of the next two years.  In theory this should help turn the economy around, but only time will tell what the stimulus does in the end.

 

Here Comes the Money

Obama Signs Stimulus Package

On February 17th, President Barack Obama signed into law the $787 economic stimulus bill.  The intentions of this bill are to turn the economy around by spending money and giving tax cuts to Americans.  There has been, and probably will continue to be a large divide between the Republicans and Democrats in the Senate and House on how the stimulus should be spent.  All states are  included in the plan to receive money if the governor approves the use of the stimulus money.   Some GOP governors have spoken out against the bill and say that they would not like to take the stimulus money because they see it running into issues in the long run.

Wisconsin Governor Jim Doyle is very supportive of the stimulus package and is encouraged by how it is going to help residents of the state.  $529 million is being allocated to fix the roads and bridges in Wis. that are in poor to awful condition because of the harsh winters that pass through the state.  This money will be distributed throughout the state for communities to decide where to best use the money in their local communities.  $38.7 million will be allocated to Milwaukee, $9.7 million will go to Madison, and the rest will be distributed throughout the state.  Gov. Jim Doyle said that this portion of the stimulus package will help save and create 13,000 jobs in Wisconsin.

Road Construction in Wis

Many jobs saved will be a result of the stimulus package, but not directly created by the funds distributed.  The Wisconsin economy is going to see a large number of jobs created once these people are back at work making money.  They will all be spending money at grocery stores, gas stations and clothing stores to purchase their needs for living.  This spending will create jobs in these industries and a domino effect will occur with the spending moving down through many sectors of business.  Wisconsin is going to see great change with the stimulus plan and residents should be hopeful for better days ahead as the money starts to flow into the state in coming weeks.