A New Economic Game Plan For Wisconsin
To make our communities thrive and bring jobs back to Wisconsin, we need a New Economic Game Plan: a game plan that invests in our human potential; improves the infrastructure that supports all economic activity; and addresses the major problems faced by businesses that want to expand. This New Game Plan recognizes that the private and public sectors are not enemies. Each needs the other. For the economy to thrive, each must support the other.
Our current economic plan is to starve the public sector. The theory goes this way: if taxes are reduced, regulations are eliminated, and programs are slashed, the private sector will be set free and thrive. The facts don’t support that theory.
Jobs, education, and thriving communities all go together. Two years ago Des Moines, Iowa, topped the Forbes list of ‘best places for businesses and careers’ and also topped the Forbes list of ‘best places to raise a family’. The common ingredients for making Des Moines both the ‘best place’ to raise a family and the ‘best place’ for business were products of the public sector — good schools and a well educated labor force.
Eau Claire, in my Senate district, is fortunate enough to have one of the lowest unemployment rates in the state. What I have noticed in the past two years is that owners of businesses moving into or expanding in the city talk about the great schools, the UW-Eau Claire, the technical college, the parks, the transportation, the arts, the environment, and the quality of life. They are coming to Eau Claire because the soil is rich. The community is a good place to live, work, play, and raise children. Companies find it is a good place to start, locate, and expand.
Government puts the fertility into the soil out of which jobs grow. Our job in government is to make the soil rich, educate our children in quality schools we are proud of, make our communities safe, train our workers in the latest technologies, keep our environment clean and healthy, modernize our transportation and communication networks, and support a quality of life we enjoy.
If the soil is rich, the economy will grow. Republican leaders have been busily removing the nutrients and wonder why the crop isn’t what is used to be. Their solution? Keep cutting back on the nutrients.
We get a good clue about what really makes a good business climate and creates jobs if we look at the states that are actually doing well and ask, “What’s going on?” What we find is that in just about every region of the country, the states that have done the best economically are the states that provide good public services. Iowa and Minnesota are among the Tax Foundation’s 10 worst states when it comes to taxes, yet they have the lowest unemployment rates in the Midwest (almost a percent and a half lower than everyone else, including Wisconsin) and over the past ten years they have grown the fastest.
We need a balance. The public sector provides the nutrients, and the private sector provides the plants. We are in this together, public and private. My Economic Game Plan is based on a vital and dynamic partnership.
I will invest in Wisconsin’s human potential.
Investment in our human potential is key to Wisconsin growth. Education is the primary driver of economic prosperity. Incomes climb with educational achievement. In the last year Wisconsin has experienced nearly the largest cuts in the nation to education, and we have lost more jobs than any other state. Millions have been cut from our technical colleges and now companies can’t find workers with the needed skills to fill available jobs.
Two economic development studies done several years ago emphasized that investment in our workers is key to Wisconsin growth.
A 2009 study, “Wisconsin’s Forgotten Middle-Skill Jobs” said that even, “Prior to the national recession, Wisconsin was experiencing shortages of middle skill workers in crucial industries.” The study went on to say that, “Developing the skills of Wisconsin’s workforce … will help the economy recover more quickly and prepare the state for better times ahead.”
A report card on Wisconsin by the Midwestern Office of the Council of State Governments pointed out that, “On measures related to the key drivers of economic growth – including workforce preparedness – Wisconsin is placed in the middle or in the bottom half of the states.”
The response of the current administration was to make the largest cuts ever to our technical colleges. The result is reflected in a recent newspaper headline, “Rebounding firms finding shortage of skilled workers.”
Buckley Brinkman, who runs the Wisconsin Manufacturing Extension Partnership, is quoted, “The fact that we have 7 percent unemployment in the state and yet we have hundreds of open manufacturing jobs where (employers) can’t find people with the right skills – it’s that mismatch that is pretty frustrating …”
Under my New Economic Game Plan I will invest in our human potential.
- I will restore the money that has been cut from education – bringing back the teachers that have been laid off, restoring the courses that have been eliminated, returning to smaller classes.
- I will move toward a fairer way to fund our schools. As Governor, I will propose a five-year phase in of much of Public Instruction Superintendent Tony Evers’ Fair Funding for Schools proposal beginning with an emergency funding bill before the end of the coming school year. Full implementation of school funding reforms will continue in the next two state budgets.
- I will institute a transparent system of accountability for all schools – including voucher and charter schools.
- I will fully fund the technical colleges and the University of Wisconsin system. I support the University of Wisconsin’s Growth Agenda and will aggressively encourage traditional and non-traditional students alike to complete their bachelor’s degree.
- I will create a tighter connection between the worker skills required by business and job training programs.
- I will provide more support to apprenticeship programs. I will assure compliance with requirements for state construction and building to employ apprentices. Auditors found over half of 223 building and road construction projects were out of compliance with requirements to hire apprentices. Noncompliance will be remedied under my administration.
- I will do more to meet the needs of nontraditional students. A recent audit shows that only two of our technical colleges offer a quarter of their courses on evenings or weekends.
- I will keep tuition affordable so everyone who wants to, can go to one of the technical colleges or to one of the University of Wisconsin campuses. We must recognize not all smart students are rich students. We have to increase our levels of student aid so that students from low income families are not denied an opportunity.
- I will uphold teaching as an honored profession again so the best and brightest of our college graduates will be motivated to choose the career of teaching the next generation.
I will increase access to affordable health care.
Making health insurance readily available in a competitive market is the single most important thing the state can do to help small businesses, farmers and individual entrepreneurs.
Creating an effective health insurance exchange where individuals and small groups can pool their buying power and increase their bargaining strength will result in holding down costs and making insurance more accessible.
Business leaders across the state tell me out-of-control health insurance costs are limiting job growth. Would-be entrepreneurs say the fear of losing their existing insurance is the reason they haven’t started their new business.
The exchange, which would be run by an independent authority, must meet five standards to be successful.
- The exchange must provide real apples-to-apples comparison of insurance plans with regard to cost, benefits and quality.
- The exchange should work to maximize the size of the pool of insurance buyers and minimize the risk of adverse selection.
- The exchange should protect the role of agents and the human resource services they provide to small businesses and individuals.
- The exchange should be protected from the political winds of change.
- The exchange must operate under ‘good government’ principles that give all parties confidence that decisions are fair and operations are accountable and transparent.
The exchange will give individuals, business owners and their agents a virtual marketplace where insurance companies will post their plans in a way that makes accurate and simple comparison possible.
The exchange will rate plans based on benefits. Information on quality, medical performance and price will all be available. Employers and their agents will be able to easily compare the potential price, benefits and quality of each choice.
Data from the state employee’s plan and actuarial analysis by the Governor’s own consultants provide evidence that this kind of managed competition has the potential to rein in costs. Transparency and true apples-to-apples comparisons are the biggest contributors to cost containment.
The Exchange would be an option for all employers with 100 employees or less – the maximum allowed by federal law – making the buying group as strong as possible.
Appointees to the authority running the exchange must have experience in health care but not be employed in health care, avoid financial conflicts of interest, and disclose all economic interests. The authority must be subject to all open meetings and open records laws and undergo regular performance and financial audits.
I will invest in our communication and transportation infrastructure.
Good communication and transportation systems are essential ingredients to a thriving economy. Improvements in communication and transportation will lower costs for producers and consumers alike, producing ripple effects throughout the economy.
- As Governor, I will work with the federal government to resurrect high speed rail for Wisconsin and the high speed rail maintenance facility in Milwaukee.
- I will work with local governments around the state to establish the regional transit authorities they have asked for.
- I will convene the Governor’s Blue Ribbon Panel on Transportation to explore the issues facing Wisconsin’s crumbling infrastructure including local roads and bridges and ask them to develop a plan for the long term sustainability of our transportation system.
- I will direct DOT to assist local government in completing an inventory and inspection of all bridges less than 20 feet long. These bridges are critical to our rural infrastructure but have been neglected by our current inspection program.
- I will eliminate the DOT ‘Warrantee Program’ and return these projects under the inspection of qualified DOT engineers.
- I will direct the Public Service Commission to complete a comprehensive map of all broadband service and identify targets for broadband build out Priority Zones. I will seek federal assistance in building out to these areas.
- I will stop the rollback of WISCNET and support a sustainable alternative for broadband to schools, local government, libraries and hospitals.
- I will assure every household has quality, affordable home phone service if they want it, by stopping the scheduled sunset next year of the ‘provider of last resort’ law. That law requires your current telephone company to provide a land line if no other company will.
Evaluating our taxes, credits and deductions
Tax breaks and giveaways to individual businesses have generally not been productive. A general finding in reviews and audits of such programs in states across the country is that promises of new jobs are not met and there is more than a casual connection between companies that get the giveaways and political contributions.
We need to look at the entire tax code and decide what works and makes sense for Wisconsin and what does not. A recent report calls out tax system a “hodgepodge of unintended consequences.” The great majority of economists agree, including those with the conservative Tax Foundation, that tax breaks for individual companies make for a bad tax system. It is far better to have a tax code that treats everyone equally and keeps rates lower.
For those tax credits that we decide to keep, we must make sure that those who receive them are held accountable for the jobs they committed to create in exchange for the credits.
It is time for Wisconsin, as some other states have done in recent years, to take a comprehensive look at our revenue structure, remove whatever impediments there are to economic activity, and tax ourselves in a fair and rational way – where everyone pays their share, and no one and no single activity is overly burdened. We need to know how our total revenue structure impacts both state and local governments; who pays, who doesn’t; the effectiveness of particular exemptions and credits and do they achieve the original purposes intended. The goal is to have taxes that meet the economic criteria of a “good” revenue structure – broadly based, fair, easily enforced, economically neutral, efficient, and reflective of the underlying economy.
In recent years “jobs” has become the magic word in politics. Everybody who is for something says it will “create jobs”. Everybody who is against anything argues that it will “kill jobs”. There is seldom any credible evidence offered. This Economic Game Plan addresses the issues that have been specifically identified time and time again as the ones that either support or inhibit economic development in a region. It reflects what works.