22 Sep Doyle and the Legislature Have Much To Agree Upon When It Comes To The Economy
MADISON – Remember this summer’s “property tax freeze” budget proposal? Legislative Republicans voted for it because they thought it was great politics; many of them were less convinced the freeze was good policy and secretly hoped Doyle would veto it.
That’s how it may be with Democrats and Gov. Jim Doyle’s proposal to raise the state minimum wage, which is currently $5.15 per hour. They’ll cheerfully vote for such a populist bill if it reaches the floor of the Senate or the Assembly, but they recognize it’s not a way to create high-paying jobs. In fact, it’s not even a good way to create low-paying jobs. Very few workers in Wisconsin earn the minimum wage. Those who do should worry that a state law forcing their employer to give them a raise might cost them their meager paycheck if the boss decides their position isn’t worth the hassle.
The minimum wage may be the only major proposal in Doyle’s “Grow Wisconsin” plan that is likely to partisan opposition. Otherwise, the 45-page package has much to recommend it to Republicans and Democrats alike.
“Grow Wisconsin” as well as the plan unveiled by Senate Republicans show there is bipartisan agreement on the need to create new jobs and businesses in Wisconsin. Lay these plans side-by-side and there’s 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 state’s “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 governor’s 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. Wisconsin’s 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.
In short, the governor and Senate Republicans agree there’s a capital gap of $300 million to be filled over 10 years, and that high-growth, early-stage companies are the target. If they can agree on that much, it should be possible to agree upon an investment mechanism that works best for Wisconsin.
The governor’s 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.
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. Investors in Wisconsin “start-up” companies would get a deferral of the gain that would otherwise be recognized upon the sale of an investment in a start-up, if that investment is rolled over into an investment into another seed-level investment.
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.
Still is president of the Wisconsin Technology Council and the former associate editor of the Wisconsin State Journal. He is a member of the Governor’s Economic Growth Council.