23 Jan State of the State: Doyle touts high-tech proposals
Madison, Wis. – In a speech partly designed to prepare Wisconsin residents for the probability of tough economic times ahead, and partly to recommend ways to grow out of them, Gov. Jim Doyle reaffirmed some of his previously announced plans for capital formation in his annual State of the State address, and went a few steps further to simulate economic development amid fears of a national economic slowdown or a recession.
Signs of a slowing economy include disappointing state revenues – up one percent rather than the projected three percent – and the battering the stock market has taken despite talk of an economic stimulus bill. A dramatic 75 basis-point cut in interest rates announced earlier this week by the Federal Reserve, and the fact that financial firms continue to lose money due to the sub-prime mortgage crisis, are further signs of choppy economic waters.
Doyle opened his address by alluding to the events of an unsettling week, and placed much of the blame on policies adopted in Washington, D.C. that have ignored the national trade deficit and allowed the dollar to decline in strength.
“Tonight, our nation finds itself at a time of great uncertainty,” he said. “America’s economy is in deep turmoil. In just the last few days, markets around the world have plummeted and talk in Washington has turned from recovery to recession. Make no mistake, challenging days are ahead.”
Within the past two weeks, Doyle has announced tax credits to simulate venture capital investment in start-up companies and innovation in the manufacturing sector as part of the next phase of his Grow Wisconsin plan. Ironically, those ideas may find more favor with Republicans in the Legislature, who have been calling for such incentives, than with Democrats who oppose more tax breaks for business.
Still, Doyle appealed to their sense of value by pointing out that in recent years Wisconsin’s share of venture capital investment has doubled due to tax credits that will leverage more than over $400 million in private venture capital investment by 2015. “That’s a great bang for our buck,” he said.
Referring to his latest tax credit proposal, part of an investment plan called Accelerate Wisconsin, Doyle said the state “can take it to the next level” to accelerate new business, and he cited a promising Madison example in the biofuel space.
“Businesses like Virent Energy Systems, led by Eric Apfelbach – this company is developing renewable fuel technology and could become the next Google or Microsoft,” Doyle said, gesturing to Apfelbach. “By helping kick start companies like Virent or reforming our capital gains tax to drive reinvestment in our state, we can unleash the entrepreneurial spirit of Wisconsin.”
Referring to his research and development tax credit to spur innovation, Doyle said the state must drive its private sector investment in R&D, much like it has done for its universities and public institutions. “When a business increases its research and development by 25 percent, let’s reward them dollar for dollar for what they invest beyond that,” he said.
Doyle also praised University of Wisconsin-Madison stem cell researcher James Thomson, who was in attendance, and UW research teams for embarking on the next frontier of stem cell research – using skin cells to create new stem cells for use in medical research. He also noted the forthcoming groundbreaking on the Wisconsin Institutes for Discovery, a new research center that will foster collaboration between biotechnology, nanotechnology, and information technology.
Other technology-related proposals include:
• An Energy Independence Fund, a major new investment for renewable energy and home-grown power. Under the proposal, Wisconsin would invest $150 million over the next 10 years to help businesses, farmers, foresters, and manufacturers produce and promote renewable energy. “Our strong manufacturing base and rich agricultural industries, along with the wealth of resources in our vast northern forests and world-leading research universities, position Wisconsin to become the Saudi Arabia of renewable energy,” Doyle said.
• A renewable fuel initiative to increase the availability of renewable fuel by one billion gallons. The initiative would include new tax credits for biodiesel fuel producers and add 400 new renewable fuel pumps to state roads. Doyle also called on the Legislature to pass a renewable fuel standard that would require oil companies to provide renewable fuel to Wisconsin consumers.
• An energy efficiency investment of $95 million over the next 18 months to help save families and businesses over half a billion dollars over the next decade.
The Governor did not announce any specific spending cuts or tax increases to offset spending increases, but he did mention sacrifice during what could become a difficult fiscal situation. About the only fiscal cushion the state has is the $50 million that was deposited in a “rainy day fund” as part of the 2007-09 budget. “We will have to delay some of the things we all agreed on,” Doyle said. “We will have to make deep cuts and hard sacrifices.”
• Tom Still: How Wisconsin can step up to the challenge of creating jobs
• Republicans introduce economic development package
• Wisconsin Technology Council endorses Doyle investment plan
• Tom Still: From also-ran to excellence: Can Wisconsin make the economic grade?
• Accelerate Wisconsin seeks to improve early-stage, venture capital performance