By Tom Still
MILWAUKEE – For many of the governors who descended on Milwaukee last week for their annual conference, their knowledge of Wisconsin and its largest city likely revolved around the following:
- The city is still a beer capital, although Laverne and Shirley retired years ago.
- There’s no shortage of German, Polish and Italian food, all of which involve some variety of sausages.
- Ryan Braun is sitting out the rest of the season for sins against baseball.
- There must a law in Wisconsin that requires all governors to ride a Harley.
- Milwaukee is not Detroit.
The final point may be the most instructive because Detroit’s $18.5 billion debt hangs over other major cities, especially those in the Upper Midwest, like a cloud of high-particulate smoke.
What are Milwaukee and Wisconsin doing, not only to avoid the perils that befell the Motor City, but to pave the way for a brighter economic future? As the National Governors Association wraps up its stay in Milwaukee, here are examples of policy and governance success stories to take home:
The Wisconsin Legislature recently passed, and Gov. Scott Walker signed into law, a bill that will create a state-leveraged “fund of funds” to invest in emerging companies. The $25 million state investment will be matched by at least that much private investment over time. The fund is not a big as many people would have preferred, but it’s a solid start that demonstrates the state’s faith in its knowledge-based economy.
The same Legislature and governor recently removed the cap on total tax credits that could be paid out over time through Wisconsin’s Act 255 investor tax-credit program. Removing the “lifetime” cap will ensure the continued success of a program that has served as a national model for sparking angel investments and network creation since taking effect in 2005.
Entrepreneurs and innovation are a public priority. While Milwaukee and Wisconsin are known for some traditional industries – manufacturing, agriculture and tourism – state and local policies and partnerships are evolving to capture small business and technology trends. In Milwaukee, organizations such as BizStarts and the Water Council are helping to further that culture, as are academic institutions such as the UW-Milwaukee and its industry partners.
While it has its critics, the recently created Wisconsin Economic Development Corp. is among those statewide organizations that have given innovation and entrepreneurship a front-row seat. Why? Small businesses, especially younger companies, create virtually all net new jobs in the United States. Wisconsin still lags in business creation, but the seeds of change are being planted.
Wisconsin’s largest public pension fund, the Wisconsin Retirement System, is fully funded and regarded as one of the best systems in the country. Neighboring Illinois has only about 45 percent of the assets needed to meet future pension liabilities in its state employee, teacher and university systems. About $3.5 billion of Detroit’s debt fiasco is unfunded pension liability.
One lesson the governors can take home: The Wisconsin Retirement System has a bullet-proof trust fund that prevents poaching by state officials in search of extra revenue. Here is what Institutional Investor magazine reported in March 2013: “It turns out that the Midwestern state best known for cheese and beer also has the best-designed and best-governed pension system in the United States.”
Along with health care and strategies to create jobs for workers with disabilities, cybersecurity and homeland security preparedness were on the governor’s agenda. Again, Wisconsin had something to offer. The state’s “Community Economic Recovery Guidebook,” published in 2012, was recently honored by the National Association of Development Organizations Research Foundation. The Wisconsin Security Research Consortium is building one of the nation’s first commercially available cybersecurity research centers.
Wisconsin has no shortage of show-and-tell items to inform governors from other states. Sure, we have beer, brats and Braun, but Milwaukee and Wisconsin also offered plenty of brains, best practices and business innovation.