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The Milwaukee County board voted yesterday to nearly double the county’s sales tax, two weeks after the city of Milwaukee approved a local sales tax increase as part of a bipartisan plan to avoid bankruptcy, the Associated Press reported. Both the city and county, which make up the state’s largest metropolitan areas, faced running out of money without additional revenue to pay for basic services such as police and fire protection, park maintenance and libraries. Milwaukee leaders, together with a broad statewide coalition, successfully lobbied the Republican-controlled Legislature to increase funding for all local governments in the state by $275 million and tie future increases to state sales tax revenue under a plan signed into law by Democratic Gov. Tony Evers. Under that plan, Milwaukee County and the city were allowed to raise additional money through local sales taxes. The Milwaukee Common Council earlier this month approved a 2% sales tax. And on Thursday, the county board voted to approve a 0.4% sales tax increase, nearly doubling the current rate of 0.5%. Combined with the state sales tax rate of 5%, the total tax rate in the city of Milwaukee will be 7.9%.

The sales tax in Milwaukee will go up 2 cents per dollar next year after the Common Council voted yesterday to raise the rate as part of a bipartisan plan to avoid bankruptcy, the Associated Press reported. City leaders who pushed for approval of the higher sales tax warned of looming deep cuts to core services, including police and fire protection. Opponents objected to strings attached to additional state funding, including curbing spending on diversity, equity and inclusion efforts. Milwaukee is struggling with an underfunded pension system and not enough money to maintain essential police, fire and emergency services. Milwaukee has increasingly become reliant on federal pandemic aid to fund its essential services, which city leaders have said cost $150 million more per year to maintain. The state Legislature and Gov. Tony Evers negotiated for months over a deal signed into law last month that gave the city the option to raise the local sales tax to help it avoid insolvency in 2025. The bill signed by the Democrat Evers, and passed by the Republican-controlled Legislature, boosts state aid to local governments by $275 million and ties future aid payments to the state sales tax.

Democrats are pushing to reform the deposit insurance system following massive bank failures that nearly tanked the economy earlier this year, The Hill reported. After the collapse of Silicon Valley Bank (SVB), Signature Bank and First Republic Bank, whose uninsured deposits all ended up being insured by the Federal Deposit Insurance Corporation (FDIC), Democrats are echoing the call of smaller banks, arguing that deposit insurance should apply to all U.S. deposits. “The recent bank failures have reignited concerns regarding an implicit guarantee wherein only deposits at larger banks will reliably be safe in the event of a failure,” Rep. Maxine Waters (Calif.), top Democrat on the House Financial Services Committee, said Friday. Waters endorsed a number of suggested reforms including “raising the $250,000 [account balance insurance] limit to a higher threshold, unlimited deposit insurance for everyone, and covering business payment accounts like the payroll accounts of start-up companies.”

A bipartisan effort to ‘claw back’ compensation from bank executives who oversee a failure advanced in the Senate Wednesday, one of the most significant legislative moves to rein in the industry since the collapse of Silicon Valley Bank, YahooFinance.com reported. The bill advanced out of the Senate Committee on Banking, Housing, and Urban Affairs in a vote of 21 to 2. It came after late-night negotiations with a host of senators haggling up until the last minute on how much power to give regulators when confronting future banking failures. We "threaded the needle pretty well," said Senate Banking Committee Chair Sherrod Brown (D-OH) of the final package. He says, if enacted, the bill would give officials new power to step in if another situation arises where "executives failed at the basics of bank management." The bill grants the Federal Deposit Insurance Corporation (FDIC) new powers to force the return of executive compensation in return for a government takeover to protect the depositors at troubled banks. The bill puts the previous two years of compensation among senior bank executives on the table with a focus on perks like bonuses and stock option profits. The bill would also allow new fines as well as the banning of executives from the banking industry if misconduct is proven.

The top senators on the Senate Banking Committee unveiled bipartisan legislation on Thursday that would allow regulators to claw back compensation from senior executives of failed banks, The Hill reported. The Recovering Executive Compensation from Unaccountable Practices (RECOUP) Act would allow the Federal Deposit Insurance Corporation (FDIC), as well as a bank’s board, to seize executives’ compensation from the 24 months before a bank’s failure. The push for such a clawback mechanism comes in the wake of several high-profile bank failures this spring. Silicon Valley Bank and Signature Bank collapsed within days of each other in March, sparking fears of potential contagion throughout the U.S. banking system. The CEO of Silicon Valley Bank reportedly received about $9.9 million in compensation in 2022, including a $1.5 million bonus, and sold off millions worth of his company’s stock in the weeks before the bank collapsed, according to MarketWatch.

Lawmakers plan to re-up proposed legislation that would give merchants the power to process many Visa and Mastercard credit cards over different networks, the Wall Street Journal reported. The new bill is expected to be introduced as soon as this week with two additional co-sponsors, Sen. Peter Welch (D-Vt.) and Sen. J.D. Vance (R-Ohio). A nearly identical bill was introduced last summer by Sen. Dick Durbin (D-Ill.) and Sen. Roger Marshall (R-Kan.). That bill was referred to the Senate Banking Committee but didn’t get voted on. Vance, who joined the Senate this year, is a junior member of the committee. Currently, when a consumer pays with a credit card that has Visa or Mastercard listed on it, merchants generally have to route the payment through that network. The bill would mandate that merchants in many cases have the right to route payments through an unaffiliated network. That could lower the fees that merchants have to pay. Visa and Mastercard set and pocket network fees that merchants pay when consumers shop with the cards. They also set interchange fees that merchants pay to the banks that issue credit cards.