Insight: Wisconsin Economic Development Corporation

Job one for the new Governor and Legislature is to put the state’s fiscal house in order and create a business climate that will encourage private sector job growth. The dual goals are inseparable. In a state that has operated with annual state deficits for the last 20 years, businesses are naturally skeptical about facing the threat of tax increases every year, and that is a huge disincentive to grow and expand here. At the same time, private sector job growth is the best way to solve the state’s annual deficits.

So which comes first? The chicken of spending restraint and fiscal discipline, or the egg of new jobs and the tax revenue that flows from them? This has all the makings for a win-win scenario.

Governor Walker certainly seems to understand the importance of living within our means. It is what he preached and tried to practice in Milwaukee County – albeit with a sometimes reluctant County Board. And it served as the backdrop to his Inaugural Address when he pledged to focus on improving the business climate as his top priority. Taxes and spending, regulatory reform and a civil justice reform were the critical elements of competitiveness that were included in his special session legislative package. Fortunately, the Republicans in control of the Legislature, who are generally more supportive of private sector growth, are likely to be more receptive to the Governor’s ideas than was his County Board.

We are particularly encouraged that the Governor and his colleagues are focusing on the fundamentals of business climate change. There appears to be a collective realization that government’s role in job creation is to create a climate in which private sector job growth is possible. And to nudge that process along, the Governor has proposed a total makeover of the state agency charged with overseeing Economic Development. He and the Legislative majority want to make sure the incentives Wisconsin has in its development portfolio are used efficiently and effectively.

There is room for improvement. A few years ago, the Legislative Audit Bureau reported the state administers 152 separate economic development programs. Seventy-eight of them provided grants and loans. Fifty-eight offered direct services, eight offered tax credits, six provided loan guarantees and two authorized bonds. The Audit Bureau concluded that the sheer number of programs made it difficult to evaluate the programs, let alone hold award recipients accountable to contracts. In fairness, there has been some effort at consolidation and streamlining in recent years, but a new public/private enterprise that has Economic Development as its sole purpose can only accelerate progress.

Wisconsin is full of incredibly successful business stories. We have endured severe recessions in the past and bounced back. Wisconsin business is resilient – given the right kind of business climate, and the right kind of support from our elected officials and their Economic Development teams. So far, the messages and actions are positive. We think the new Wisconsin Economic Development Corporation will provide the framework for creating a more robust and competitive business climate. That means more jobs. And that means a better quality of life for us all — including government! Win-Win.

The Insight Column is a weekly column that provides commentary and background information from WMC lobbyists on issues affecting your business. For more information on this topic, contact James S. Haney , WMC President, (608) 258-3400.