26 Jun It's time for Wisconsin's economy to grow
When I first came to the Wisconsin State Senate five years ago, it quickly became crystal clear that Wisconsin had done little to transform its economy from an old line manufacturing model to an entrepreneurial model favoring innovation and ideas.
Simply put, the state placed its efforts on protecting old jobs at the expense of creating new ones. The lack of focus on the future placed Wisconsin at the back of the line when it came to capital formation and job growth, as well as all of the ancillary, positive development that happens when a state grows in wealth.
Milwaukee was in a significant death spiral, losing more jobs than it was creating and losing population to other parts of Wisconsin and to other states. Worst yet, the majority of the people moving out of the city were more educated and wealthier than average, leaving behind the less educated and economically disadvantaged.
With that as a backdrop, the Republican-led legislature began to act. Beginning with the 2003-2004 session, the Wisconsin Legislature passed, and the Governor signed, a series of initiatives that began to move us forward.
We passed the Job Creation Act, which enacted the single-sales factor and streamlined permitting processes. This allowed businesses to be on a more level tax playing field with businesses in other states and gave them a defined permitting process that would reduce their legal costs and provide more regulatory certainty. Act 255 also passed, giving investors the opportunity to leverage tax credits into successful start-up companies here in Wisconsin.
Building upon the successes of 2003-04, the most recent legislative session saw the enactment of significant reform-based legislation that will put Wisconsin in a more competitive position. By introducing a comprehensive package of bills called Invest Wisconsin, the legislature was able to pass reforms to assist new and existing businesses to help stimulate Wisconsin’s lagging economy. The Invest Wisconsin package focused on three areas; creating a viable infrastructure to support growth, implementing regulatory reforms to speed up the business start-up process, and providing easier access to capital investment.
A vital part of the 21st century infrastructure is a viable broadband platform where businesses and consumers can connect to the global marketplace. The problem that currently exists is there are significant geographic pockets scattered across the state that do not have access to reliable broadband. Thanks to recently enacted tax incentives, private companies will be providing more areas of Wisconsin with broadband services, thereby creating a backbone for innovation and access to global competition.
In addition to infrastructure development, the legislature worked hard to ensure that our best and brightest university system researchers could take their groundbreaking research to the marketplace more easily and relieve the bureaucratic red tape that served as a barrier to capital. The state will continue to encourage university researchers to take advantage of entrepreneurial opportunities that result from their time and hard work.
Also in this session, the legislature was successful in its attempt to repeal the shareholder liability law. This old law served as a disincentive for investment in Wisconsin companies because shareholders feared they could be liable for an amount greater than their initial investment. Before its repeal, Wisconsin was one of two states in the nation to have this law on the books.
Complementing other parts of the Invest Wisconsin package, important tax incentives were included to enable more research and development in our small engine manufacturing base. For too long, our manufacturing sector has put off research and development initiatives. Now, under a recently enacted law, small engine manufacturers can continue to contribute to our economy and make products that lead the world.
The road ahead
The next budget and the ensuing session will be a watershed for Wisconsin. The building blocks have been put in place to move the Wisconsin economy in the right direction; we cannot afford to stop now. We must build upon these legislative successes and push for much-needed reform of the UW System, we must examine the way we fund transportation, we must enact common sense product liability reform and, finally, we must take control of Wisconsin’s outrageous tax climate.
Opportunities like these do not often present themselves. The first 10 years of the new century will either be judged as a time of incredible reform, innovation, and economic growth, or as an opportunity lost; now is the time to choose that path that will define us.
No excuses. It’s time to grow.
State Senator Ted Kanavas, R-Brookfield, represents the state’s 33rd senate district.
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