There’s one thing I noticed after eight years of Doyle and in particular after Obama was elected; the focus of our elected representatives and government employees was on growing government. How to get more for themselves; how to make it bigger; how to push their weight around to show those of us in business who’s boss. In their excitement following the 2008 election, they forgot not only who they work for, but that without a successful business sector, there won’t be enough tax revenue to pay for all the goodies they want.
Example: A few years ago a young DNR agent threatened my company with criminal prosecution because we declined to comply with his demands to adhere to voluntary guidelines – guidelines that the Democrat-controlled Legislature refused to put into law on three occasions because they were too restrictive and costly. Only the threat of suing him and the DNR caused him to back down. (Give credit to a senior DNR agent who stepped in to prevent a lawsuit.)
Similarly, in 2003 when I built an addition onto the City Center West parking ramp, another DNR agent falsely claimed that I had schemed up the idea of building it in phases (heaven forbid!). Never mind that I had signed leases to prove my intentions, in addition to going in advance to the DNR to solicit its input, given its rules didn’t cover phased construction. She had sent my permit request to the criminal division (yes, they have such) without even informing us that she considered us to have done something wrong. We eventually proved our position and won our case, but not without a lot of legal fees.
Now all that has changed. Today, I am pleased to say that with new leadership in Wisconsin, the attitude that business is bad and that business owners are inherently evil is changing. (Of course, there are bad apples in business, just like in state government and in teaching, but the difference is that I don’t assume that every teacher is bad.) As the Governor told me, “We’re changing the philosophy in state agencies, from being adversarial to being a client-based relationship. We’re going to treat business people as customers.”
One shining example of this new leadership is Cathy Stepp, Secretary of the DNR, who is changing the way the business of government is conducted, and so is every secretary of every department under Gov. Walker. The enthusiasm and energy of Secretary Stepp and the other secretaries I met with is contagious! They actually want to help businesses succeed in Wisconsin! (Now there’s a new concept!)
The directive of promoting business and job and economic growth comes right from the top, from the Governor himself. “We’re removing the things that drive people out of Wisconsin,” Walker reassured me. (As Lt. Gov. Rebecca Kleefisch said on the campaign trail, she truly has become one of the chief marketers of the state.) The Governor is so focused on jobs, every secretary has to send him a report on what he/she did to promote job creation each week. Talk about focusing people’s attention!
The Legislature has been no slouch in promoting jobs, attacking the three barriers to job creation (taxation, regulation, and litigation) by including numerous pro-job, pro-economic development changes in the new budget repair bill. In fact, so many pro-job initiatives have been passed that maybe the budget repair bill should be called the Wisconsin Repair Bill.
A few examples of key changes: the elimination of the farmland “preservation” tax; regulatory reform (the Governor correctly wants to review and approve or reject new regulations proposed by his agencies rather than letting them do it unchecked); the tax cut for job creators; the repeal of the tax on health savings accounts; and the 100% capital gains deduction for Wisconsin-based businesses! Dare I predict that Wisconsin’s economy will take off on a growth path in contrast to the national economy?
Let’s face it, one thing career politicians and career bureaucrats have never understood is that when the tax burden gets too high, we in the private sector just stop investing, stop hiring, stop taking on new risk, and stop growing because the risk/reward ratio is suddenly altered to make the profit potential too small for a given amount of risk. Take my business as an example. I used to build between one and six buildings a year, directly and indirectly employing over 10,000 Wisconsin workers each year all the way down the supply chain. (Think about it: If we install plumbing fixtures, we buy them from a plumbing manufacturer, who has to source the raw materials and the machines to make the fixtures, in addition to employing those who perform the installation.)
In fact, between our 44 buildings, we operate what is really a small town (albeit larger than most small towns in Wisconsin) in which another 12,000 to 15,000 workers are employed. I guess you could say that I’m like the mayor of that town – responsible for making sure services like garbage pickup are taken care of along with making sure that snow plowing, lawn care, water distribution, fire protection, security (police) services, etc., are delivered on time and on budget. (Thank goodness I have a terrific team to carry out those services.)
And on average, we used to deliver over $20 million of goods and services and another $25 to $50 million of construction value each and every year to the local economy.
But when the government interfered in the marketplace, causing the recession, I stopped new development and cut our head count in half. The risk was too great and the reward was negative (i.e., no profit). And when I stopped development, new tax revenue stopped flowing into the state and the cities. (Sidebar: This is the one equation that Mayor Dave never understood. While spending the city into more and more debt, he unknowingly put up roadblock after roadblock to creating new tax base that would help him service that debt. Mayor Soglin is just the opposite – he is looking hard at ways to cut debt while encouraging new tax revenue through new economic development.)
Now that the equation in this state has changed thanks to new leadership (at the city of Madison level as well), job creators like me have regained enough confidence to dip our development toe back into the shark-infested waters. I was recently able to raise over $1 million in just six weeks from local investors who are partnering with me to build 118 apartments this summer. With financing, that’s over $10 million of new construction.
Think about it: We’re going to purchase plumbing fixtures, electrical fixtures, wall board, lumber, roofing, technology, steel, concrete, brick, and an endless list of other goods and services to build these apartments, all of which have to be manufactured and installed. How exciting is that?!
And I can go ahead with taking this risk with the confidence of knowing that some government employee who opposes economic development can’t threaten to stop my effort to create jobs. Think I’m exaggerating? Even though I liked and respected Kathleen Falk as a person and commend her for the many good things she did, she went to great lengths to try to stop our Bishops Bay development. So yes, it does happen. In fact, I’d say that we frequently have run-ins with government employees who are simply anti-private sector.
On the other hand, there are many more good, hardworking government employees who are also honest and will give you a fair shot. Many, in fact, are closet conservatives, but just can’t admit it publicly in this town!
So I commend the Walker administration for rapidly changing the business environment in this state. And Walker isn’t done yet; he’s “looking at other reductions in taxation and regulation in Wisconsin for workers and job creators.” With these efforts, there’s no doubt that Walker will achieve his goal of creating 250,000 jobs during his first term.
Wisconsin truly is open for business!
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