Business leaders discuss Walker’s budget impact

You would be right if you think Milwaukee area business leaders are pleased with Gov. Scott Walker’s focus on growing business in the state. That doesn’t mean they are also in lock-step with the governor’s entire agenda, though. That was made perfectly clear by five of Milwaukee’s corporate stars at Thursday’s Public Policy Forum discussion on whether the Walker budget will help or hinder the region’s economic competitiveness. The panel looked at the big picture of what the 2012-13 budget moves will do to – and for – our economy.

“It has improved the perception of Wisconsin,” Rich Meeusen said, referring to Walker’s economic policies. “There was a 17-spot move up for Wisconsin reported in Chief Executive Officer Magazine. This is a dramatic improvement in the perception of Wisconsin and Milwaukee by those who make the decisions.”

On Tuesday, Chief Executive Officer magazine released its rankings of the best and worst states for business, based on a survey of more than 500 CEOs using criteria ranging from taxation, regulation, workforce quality and living environment. In 2010, Wisconsin ranked 41st in the nation to do business in; the state is now at number 24.

The jump of 17 spots was the largest jump among the 50 states.

The article included this analysis: “These are some of the actions that encourage business leaders. As another CEO respondent remarked, “We need some political backbone to control spending, address out-of-control debts, and use common sense on environmental and other governmental regulations. Quit demonizing businesses. Who do they think provides real jobs?”

Meeusen, CEO of Badger Meter and Chairman of the Milwaukee Water Council, said that the perception of riots, chaos and fleeing legislators perpetuated by local and national news editors may have tarnished the state’s image, but added, “Editors don’t create jobs. It is the CEO perception that is important to economic vitality.”

But Kahler Slater CEO and Chair of the Creative Alliance of Milwaukee, Jill Morin, downplayed the singular importance of economic changes proposed by Walker. She focused on the impression that the governor’s quality of life cuts are making on businesses and young, creative professionals.

“Our businesses depend on creative workers and they ask me about the cultural amenities, school, transit. No one asks me about taxes,” she said. “I’m sure the idea of an onerous tax burden is a correct one. There is room for improvement, but the constant drone  that we’re a tax hell is terrible for business… I’m not sure the reality matches that perception.”

As for Walker’s policy of declaring Wisconsin  “Open for Business” and directing Lt. Gov. Rebecca Kleefisch to troll other states courting businesses to move here, the panel felt Walker’s focus should be on growing new businesses at home.

“Chicago is the 6th largest global business city,” Grucon Group President Gary Grunau said. “We have to stop thinking of  (Chicago and Illinois) as the enemy, but (instead) as a partner.”

Daniel Steininger, co-founder of BizStarts Milwaukee said almost all new jobs are created by new companies. He encouraged Walker and the legislature to focus their efforts on increasing venture capital and investment in entrepreneurial programs.

Morin said that was the recommendation of a panel to the Milwaukee Seven years ago, but it is even more important today, especially among creative businesses.

“The Creative Alliance did a study showing in both for-and-non-profits there are 67,000 workers and 4,100 businesses in the creative fields in our area. We need to have policies and small loan programs to encourage creative businesses.”

While each agreed that education is the key to growing businesses and employment in the state, they differed on Walker’s approach.

Meeusen agreed with the harsh cuts to the Milwaukee Public Schools and said they didn’t go far enough. He called for the complete “blowing up of MPS,” along with the firing of the board and Dr. Gregory Thornton.

“They won’t make the changes that are necessary,” he said. “It is broken and anything would be better than MPS.”

He asserted that poor outcomes in MPS have forced him to move low-skilled jobs to Mexico or overseas. Instead, he focuses on the resources of our area universities and colleges, employing skilled workers in the community.

Donald Sykes, President and CEO of the Milwaukee Area Workforce Investment Board, said Walker has forgotten that a school is a reflection of the community and society.

“We need to stop balkanizing schools. We need to invest in the kids before they’re in the school building,” Sykes said. “We need to invest in school preparation. We need to get a handle on the dysfunctional families.”

Morin is fearful for the loss of art, music and gym classes. She pointed to research that proves children who study arts and physical fitness are more creative and nimble in the ever-changing work world.

Grunau just wants the bickering over education to stop. He suggested that all sides – public, choice and charter – come together and agree on longer school years, teacher incentives and a public/private financing model.

Walker’s decision to turn away federal rail dollars was called a “generational mistake” by Grunau, and none of the panel were surprised that the state was left out of the latest round of train grants.

Grunau added that people were not properly apprised of what was in the original $810 million grant to Wisconsin. It contained a lot more than just the development of a “high-speed” line between Milwaukee and Madison; there were funds for improvements to freight tracks and the Hiawatha line.

“Walker didn’t originally call it a boondoggle,” he said. “That was Mark Belling and Charlie Sykes. But he decided to commit to what these talk show commentators said and now we’re going to see rail pass us by.”

Last week, the U.S. Department of Transportation awarded $2 billion in rail funds to 15 states, including Michigan, Illinois, Iowa and Minnesota. A rail line is now being planned that would run from Detroit to the Twin Cities, completely bypassing Wisconsin. The $150 million Walker requested for Hiawatha line improvements was denied.

“Remember, it was a Republican governor in Michigan who accepted the funds,” Grunau added. “But we passed and now it is going to pass us by.”

By the end of the discussion, there was one area of agreement – that it is too early to tell if Walker’s plan for the budget and policy will be successful. That leaves these business leaders in a wait-and-see holding pattern, something nobody is comfortable with.