No state completely controls its own economic destiny, which means Wisconsin is unlikely to achieve a full recovery until the U.S. economy rebounds.
But even in this tough environment a mix of red and blue states — notably Florida, North Carolina, Texas and Virginia — have managed to outperform others.Their successful formula is a combination of fiscally responsible and business-friendly policies that have minimized the damage of the Great Recession and positioned them to recover faster than states that have been unwilling to make tough, but necessary choices.
With the enactment of the state’s first truly balanced budget in at least 15 years, as well as much-needed regulatory and litigation reforms, count Wisconsin among the states now pursuing similar common sense policies.
Governor Scott Walker set the right tone even before he took office by announcing the state was “open for business.” Walker backed up his slogan by introducing a two-year budget plan that solved the $3.6 billion deficit without raising taxes.
Walker’s approach was in sharp contrast to the previous administration, which raised taxes on businesses, investors and the rich by $3 billion. It was the largest tax increase in state history, but it still failed to eliminate the structural deficit and arguably exacerbated the loss of Wisconsin jobs during the recession.
By stabilizing Wisconsin’s finances and refusing to raise taxes to do it, Walker has removed one of the principal causes of “uncertainty” that delays hiring decisions and slows a recovery.
But the state budget also creates new incentives for job creators, including a manufacturing tax credit that, once fully phased in, will lower the cost of making things in Wisconsin. Manufacturing is still the state’s largest business sector and the foundation of middle class jobs. The tax incentive, championed by Senator Glenn Grothman (R-West Bend), will protect and hopefully grow more of those jobs by encouraging manufacturers to stay, expand and perhaps even relocate in Wisconsin.
Separate from the budget bill, Walker and the Legislature have enacted other important reforms. They include reining in the rulemaking authority of unelected bureaucrats and reducing the liability exposure businesses face from frivolous lawsuits.
Walker’s words and actions have resonated in the business community both here and nationally. In fact, Wisconsin jumped from 41st to 24th in the most recent CEO Magazine ranking of business-friendly states and improved from 29th to 25th in a similar CNBC list.
In a recent WMC survey, 88 percent of Wisconsin business leaders said they are confident the state is heading in the right direction, up from just 10 percent a year ago. That’s good news because confident businesses hire. Pessimistic ones don’t.
Rankings and surveys aside, job growth is by far the most important measure of success and more work needs to be done to make Wisconsin the best place for employers and employees alike. Things like continuing to ease the tax burden on job creators, making the state bureaucracy more responsive to the needs of businesses and continuing to invest in vital infrastructure projects.
Wisconsin also needs a better prepared workforce if it wants to maintain its manufacturing base and the good paying jobs that come with it. Factories in many parts of the state have jobs available for qualified workers, but many employers complain applicants lack basic reading, math and computer skills and don’t have the old fashioned Midwestern work ethic our state is known for.
Despite those problems, it is clear we are heading in the right direction and there is reason to be bullish about Wisconsin.