“From west of the Mississippi, a tinge of envy over Wisconsin’s business climate”

By Tom Still

For most of the last decade, Wisconsin has been told it should be more like Minnesota. In many ways, that’s true. Minnesota has more college graduates, more business start-ups, more venture capital and, not surprisingly, higher per capita income than its neighbor to the east.

 

Of late, however, the drum beats from across the border have sounded a different note: Minnesota can learn a thing or two from Wisconsin. (Read this blog item from the Minneapolis Star-Tribune.)

 

The passage of Wisconsin’s $62 billion state budget has drawn mixed reviews at home, but onlookers from Minnesota and beyond have taken note that policymakers here haven’t abandoned their commitment to fostering a more diverse economy. Recent press accounts in the Twin Cities have noted that a few technology companies are moving to Wisconsin – even if only a few miles over the border – because Wisconsin’s investment tax credits have helped those companies attract “angel” or venture capital.

 

Other press reports have noted a loss of jobs in Minnesota’s medical device and equipment sector, which has driven that state’s high-tech economy for decades. Some Minnesota techies say that’s evidence the state has banked too much on one industry, and they point to Wisconsin as a state that is encouraging start-up companies that make medical devices, pharmaceuticals, diagnostics, software, power electronics and much more.

 

Pete Bianco, a Twin Cities health-tech consultant frustrated by the Minnesota Legislature’s refusal to pass investor tax credits such as those in place in Wisconsin, telephoned Wednesday to lament his own state’s gridlock – and to congratulate Badger state politicos for not crawling under their desks.

 

“When I talk to legislators here, I point to the Wisconsin example,” Bianco said. “The list of economic development ideas that made it in this latest budget was impressive.”

 

That’s a perspective to keep in mind now that Gov. Jim Doyle has signed the state’s two-year budget into law. While there are reasons to question parts of the budget, such as capital gains tax exclusions that were cut in half, other provisions signal the state is open for business.

The budget and a related stimulus bill passed earlier this year builds on recent efforts to enhance Wisconsin’s tech-based economy through targeted tax credits, investments in core research projects and other incentives for companies and entrepreneurs. Major provisions signed into law include:

Wisconsin’s new budget has more than its share of flaws, which is not surprising given the state of the economy and how the recession has cut into tax revenues. But viewed from outside Wisconsin, where the economic conditions aren’t necessarily better, parts of the budget will read like a state that is continuing to invest in its future.

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