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MADISON Practical ideas for spurring capital investment are included in economic development plans released this week by Gov. Jim Doyle and state Senate Republicans, said Tom Still, president of the Wisconsin Technology Council.
The Grow Wisconsin plan unveiled by the Governor and the package released by the Senate Republicans show there is bipartisan agreement on the need to create new jobs and businesses in Wisconsin, Still said. Lay these two plans side-by-side and youll see theres an encouraging amount of overlap. Wisconsin citizens should expect that bipartisan action, not partisan gridlock, will follow.
The plan put forward by Doyle called for a competitive business climate, investment in Wisconsin businesses, investment in the states human capital its people and regulation reform. The Senate Republican plan also urged for more investment in Wisconsin, building an infrastructure driven by reliable energy and high-tech communications, and regulation reform.
A comparison of capital formation ideas contained in the Governors plan and in the Senate Republican package best illustrates the point that state policymakers are standing on common ground.
The plan submitted by the governor would deploy $300 million in seed and venture capital over 10 years through a new state authority that would invest in capital funds managed by experienced investment professionals. The focus of this fund would be start-up or early stage companies, most of which are technology-based. The authority would be funded annually with $10 million in state general-purpose revenues, $10 million from the Patients Compensation Fund, and $10 million from the State of Wisconsin Investment Board.
The Senate Republican plan called for expanding the Certified Capital Company program to $300 million over 10 years. Wisconsins CAPCO program, which is aimed at encouraging venture investments by insurance companies, is the smallest among the eight states that have such a program, but it has thus far invested $20.7 million in 15 high-growth companies in biotechnology, medical devices, semiconductors and communications.
The Governor and the Senate Republicans apparently agree theres a capital gap of $300 million to be filled over 10 years, and that high-growth, early-stage companies are the target, Still said. Given that consensus, it should be possible to agree upon a mechanism that works best for Wisconsin.
The governors plan also called for the accelerated investment of other venture and research funds, such as venture capital being managed by private firms on behalf of the State of Wisconsin Investment Board. Doyle also urged the creation of a Technology Commercialization program that may help Wisconsin attract more federal Small Business Innovation Research (SBIR) grants. Doyle asked to update Wisconsin laws regulating financial institutions and investors, and to refocus programs such as the Technology Zone tax credits so the money better leverages small tech companies.
Those ideas are consistent with plans suggested by the Wisconsin Technology Council in its recent white paper report to the Governor and the Legislature. (See www.wisconsintechnologycouncil.com
for the full report.)
The Senate Republican plan would allow state employees to voluntarily contribute up to 10 percent of their retirement portfolios to a venture capital trust through the Wisconsin Retirement System. There would be no cost to the state.
Senate Republicans would also seek tax credits and deferrals for private investors in seed funds and investments in early seed testimony. In its recent white paper report, the Tech Council recommended creating a tax credit for investors who invest seed capital in Wisconsin tech start-ups. The Tech Council also recommended a tax deferral of the gain that would otherwise be recognized upon the sale of an investment in a tech start-up, if that investment is rolled over into an investment into a seed-level investment.
Seven members of the independent, non-profit Tech Council serve on the Governors Economic Growth Council, and three Tech Council members testified before the Senate Select Committee on Job Creation. The Tech Council was created in 1999 to serve as the bipartisan science and technology advisers to the Governor and the Legislature.
Creating a more vibrant, knowledge-based economy in Wisconsin is a job that will require bipartisan cooperation. The economic growth plans unveiled by the Governor and the Legislature give reason to believe cooperation is not only possible, but likely.
For questions or more information, contact Tom Still or Sally Muller at (608) 442-7557.