1/12/2012 by Ron Brochu

Wisconsin Gov. Scott Walker’s first year on the job was anything but typical.

His unyielding conservative beliefs prompted Democrat senators to flee the state, triggered a prolonged capitol occupation, ignited court battles and served to launch recall efforts against several Wisconsin Republicans, including himself.

Despite partisan opposition, Walker remains confident his smaller-government approach represents the strong medicine Wisconsin needs to pay down its deficit and revive its business climate.

“We balanced our budget without gimmicks. Because of our reforms, we now have one of the most stable places in the country to grow business,” he told BusinessNorth in a late November telephone interview. The former Milwaukee County administrator said Wisconsin already is benefiting from political decisions in Illinois and Minnesota that business owners view as unfriendly.

“Illinois not only didn’t balance its budget properly, but they increased taxes on business, on individuals and have a huge problem with their debt and overall budget,” he said. Illinois’ October unemployment rate was 10.1 percent versus 7.7 percent in Wisconsin. “We see a couple businesses each month move into our border counties,” primarily moving north from Illinois into Kenosha and Racine counties, but also from the Twin Cities into St. Croix County near Hudson, Wis.

“We did tax relief, tort reform and regulatory reform,” he said, in a special session held days after he took office. “That showed we meant what we said: ‘Wisconsin is open for business,’ ” he said, reflecting an “overall attitude change” toward private enterprise.

Whether or not Walker has captured the hearts and minds of Wisconsinites is yet to be determined. If a sufficient number of valid signatures are gathered on petitions, he could face a ballot box challenge before his second year is complete. If he’s concerned, it’s not evident in his voice. He remains enthusiastically pro-business, despite ongoing political challenges.

A potential mother lode

Small companies have the most to offer Wisconsin, the governor believes, but their growth currently is being stifled by a lack of investment capital.

“One of the challenges we hear repeatedly is that it’s difficult to get credit right now,” he said, stressing the need for alternatives. “If we had a venture capital fund, it would help traditional financial institutions to provide funding. My firm belief is that job growth will largely come from companies that employ 25 and will add five, or employ 50 and will add 10 employees.”

Nonetheless, “If somebody wants to bring in a 1,000-person plant, I’ll do cartwheels for it,” he added.

That opportunity may be possible in Northwestern Wisconsin. Gogebic Taconite LLC has proposed to establish an iron mine and taconite processing plant along the border of southern Ashland and northern Iron counties. During construction, the project would infuse more than a billion dollars into Wisconsin’s economy. Once operational, it would directly employ about 700 persons and, indirectly, thousands. Gogebic, however, says its investment decision may hinge on whether or not Wisconsin lawmakers will simplify and quicken the process to obtain mining permits. Walker said the company has valid concerns.

“The way it’s set up now, it’s all but impossible to move forward,” he said. “The reality is that it’s legal to mine in Wisconsin, so it’s not a matter of saying ‘yes’ or ‘no.’ So if it’s legal to have one, why not have a reasonable process that doesn’t drag this out for years when we need the jobs sooner, not later.”

The Bad River Band of Lake Superior Chippewa and environmentalists, who fear the change would lessen air and water protections, oppose the effort.

“I firmly believe we can have environmentally friendly mining in the state. Manufacturing is our number one industry, but our second and third are agriculture and tourism. Obviously, we’re not going to do anything that has a negative impact on our natural resources, because agriculture and tourism depend heavily on a good, healthy, clean environment,” Walker said. “Some people will oppose it no matter what, but we’re going to base our decision on science. In total, the financial impact will be a couple thousand jobs. That’s why you have so many community leaders on the city and county level supporting it.”

Cooperate, don’t fight

Regional economic development groups have been created in seven regions of Wisconsin with the exception of one area – the northwest. Last summer, unification efforts were dashed when a three-county entity called Opportunity North threw a curve ball and broke away from seven others.

“I understand the tension – we’ve seen this in other parts of the state. There’s tensions between one part of the region the other about where (new) jobs will go. We’ve got to get beyond this mindset,” Walker said. “For too long, a lot of our smaller communities dealt with economic development by stealing companies from one business park and moving them to another. Our bigger goal is to address how to bring new jobs into the region. A company doesn’t care whether you’re Burnett, Douglas, Iron, Ashland or Sawyer counties. They care about whether a site is cost effective, has enough skilled workers and has access to transportation resources.”

Walker’s administration reconfigured the state’s Commerce Department, creating the Wisconsin Economic Development Corp. (WEDC), a public-private agency focusing exclusively on economic and community development. WEDC, he said, needs a strong regional partner in the northwest.

“We can take our lead from what we hear on the ground and not just what we hear in Madison,” he said. “Hopefully, people in the northwestern part of the state can appreciate that and help us work together.”

Superior could soon be a significant beneficiary of WEDC efforts. Since last summer, the group has been working to facilitate a significant manufacturing development.

“The state very much wants to be a partner in that one,” Walker said about the deal, which is yet to be finalized.

There’s a limit to what government should offer through its recruitment efforts, the governor said.

“I fundamentally believe the best way to create new jobs in the state is to create a better business environment, he said. “It’s not just through incentives. It’s ultimately by creating a better place to do business – reduce the tax burden, have regulations that are more logical, have a better litigation climate, utility costs that are low and skilled workers who are available.”

But at times, he said, some incentives should be made available to help Wisconsin compete against other states.

“We do this in limited cases. We ultimately tie it into jobs. Any incentives we put on the table are pro-rated and performance based. If they want the help, they have to create at least as many jobs as they say they will.”

One way to help Wisconsin succeed is through better business education, he said.

“I fundamentally believe young people do not know enough about the business world. I have a council of financial literacy. We believe very firmly that students need to have a better understanding of finances and the free enterprise system, because in the end, that will better drive progress everywhere,” he said. “If people better understand finances and the free market system, that helps them appreciate that jobs don’t come from government, they come from the people.”

Still, Walker said, “I’m very reluctant to mandate what schools should do, but I think they don’t do enough. We can’t afford to have kids coming out of the K-12 system who aren’t at or above grade level.”

• Employers face skills shortage - 1/12/2012
• Occupy Duluth opposes non-ferrous mining, distrusts state regulators - 12/8/2011
• Northland customers aren't embracing green cars - 12/7/2011
• Grand Rapids seeks 'arts destination' identity - 11/23/2011
• Newspapers taking cost control to higher level - 11/18/2011