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Questions for Candidates

May 7, 2018

Not long ago, the Wisconsin Policy Forum released a seriously wonky and widely ignored paper on levy limits. Even the mention of this arcane tax issue would send most people scurrying to FaceBook for relief. But while the topic is boring it is also important.

Since 2006 Wisconsin has dampened the state’s high property taxes by limiting  municipal property tax increases to the rate of new construction in the community. At first, the consequences were muted because virtually all parts of the state were enjoying a building boom. But very quickly, the WPF researchers found, the state was hammered by two recessions, and new development was “increasingly isolated, with relatively few communities experiencing even modest growth.”

This core truth was the starting point of “The Two Wisconsins” series I wrote last year for Isthmus. It  highlighted how a vast swath of the Dairy State is still mired in recession. I followed up with a recent column that argued the state’s gubernatorial candidates need to be challenged on how they would help the state’s left-behinds get on their feet.  I wrote:

The heart of the Wisconsin gestalt in 2018 … is the economic chasm dividing the state. Simply put, the good times celebrated in Dane County, the Milwaukee suburbs, the Fox River Valley and a few other lucky communities are not shared in the forgotten precincts of rural and inner-city Wisconsin….

Lost in the huzzahs of Wisconsin’s record-low jobless rate and other benchmarks of success is the stubborn fact that the recessionary downturn that took hold at the turn of the century never ended for the state’s left-behinds. Too often, these are neighborhoods of troubled schools, dead-end or non-existent jobs, broken dreams and lots of drug overdoses.

The candidates need to be judged on how they would create broad-based Wisconsin prosperity.

To see how I lay out the issues, please go here.

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Categories: Development, Politics, TheDailyPage.com/Isthmus
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A Better Wisconsin Growth Strategy

October 25, 2017

I wound up writing two Isthmus cover stories on the Wisconsin economy. In the first piece I detailed how our recovery was starkly incomplete. Sure, the overall economy led by Dane County had bounced back from the Great Recession. But too many of us were ignoring a less pleasant reality: There is is a broad swath of  economic “left-behinds” in rural Wisconsin and inner-city Milwaukee.

My second story outlines an economic strategy that could turn things around.

The problem is that the state’s commitment to manufacturing, even with its smart nod to high-skilled manufacturing, is one-sided and overwhelming. Part and parcel of the yesteryear economics that holds up the chimera of mining as the savior of northern Wisconsin.

And consider that the Foxconn package is the costliest manufacturing subsidy project in Wisconsin history by a factor at least 10. And that payback in new taxes generated by Foxconn, assuming the campus develops as proposed, won’t come until many of us are dead and buried. No less than in 2043, according to the Legislative Fiscal Bureau….

Here’s the point: Government does best when it sticks to the basics. Infrastructure! Education. Transportation. Safety. Health. Parks. And if it does incentivize certain economic behaviors government should do so carefully and in a way that provides public good and not private payoff.

And there has to be a vision. Or as hockey legend Wayne Gretzky famously put it, you need to skate “to where the puck is going to be, not where it has been.” That isn’t happening. Wisconsin tenaciously holds on to the economics of nostalgia.

You can find the details here:

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Wisconsin’s “Left Behinds” Are Ignored

October 14, 2017

The Badger State’s celebrated comeback from the Great Recession has been incomplete. I argue in the first of a two-part series in Isthmus that rural Wisconsin and inner-city Milwaukee remain mired in economic and social pain:

Call it “the two Wisconsins,” as the Wisconsin Taxpayers Alliance presciently did in 2006 when the nonpartisan budget group documented Wisconsin’s split reality even before the Great Recession soundly fractured the state economy into winners and left-behinds.

Today, while Dane County booms and the bigger cities in the Fox River Valley and western Wisconsin prosper, the rest of the state is largely mired in a downturn that is a recession in all but name.

Wisconsin is not alone. This dichotomy is also America’s story, as the Economic Innovation Group, a centrist research group in Washington, D.C., first documented in May 2016. The EIG study — widely ignored and fraught with political implications, as pundit Harold Meyerson has argued — detailed how painfully limited the economic recovery from the Great Recession (the magnitude of job destruction earned its adjective) was compared to post-recession periods in the early 1990s and early 2000s.

“The 1990s recovery was powered by small counties, small cities, rural areas. It was very much a grassroots recovery where the entire U.S. landscape experienced a blossoming of enterprise,” says Kenan Fikri, EIG’s research and policy manager.

The early 2010s’ recovery was brutally asymmetrical. By the time the U.S. economy pulled out of the recession, the split was extreme between America’s prosperous and left-behind counties.

So it is in Wisconsin. My story tries to define the problem and suggests that our political leaders have yet to come to grips with it. You can read more here.

Categories: Development, Politics, TheDailyPage.com/Isthmus
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What Would Tommy do?

April 19, 2016

Last fall I had lunch with a friend who covered Wisconsin’s Capitol when Tommy Thompson ran the state for 14 years. By the end, he said, Thompson had tired of the constant grind. Only when Thompson talked about his plans for the UW System did the old fire return
That stuck with me. A few years earlier I wrote a Capitol piece for Milwaukee Magazine that discussed the politically surprising partnership between the Republican governor and  liberal-minded UW-Madison Chancellor Donna Shalala in launching a huge and transformative building program for the university.
Times have changed. Today the Capitol and the university see one another as an unreliable partner. I write:

The disharmony stems in part from the tensions of a generally liberal-minded university working with a decidedly conservative state government. Further exacerbating the relationship is the obliqueness of UW System bookkeeping and the Republican belief it hid a huge slush fund. (This became a key factor in the GOP-enforced tuition freeze and UW budget cut.) Add in the troubling geographic complaints that the UW System is Madison-centric and shorts the rest of the state and Milwaukee in particular.

UW advocates, in turn, are reeling from the $250 million UW budget cut, the four-year tuition freeze, the stripping of tenure protection from state statutes and Gov. Scott Walker’s surprise attempt in an earlier budget to bowdlerize the “Wisconsin Idea” that guides the UW’s mission to the citizenry.

All this makes for an unpleasant stew of missed signals, aggravation, suspicion and wheel spinning. Not to mention a nagging sense that the state as a whole is grievously hurt by the failure of the pols and profs to make nice.

Once upon a time it was different. Governors, Democrat and Republican alike, would tap top UW talent to serve and help run their administrations. Over the past 40-plus years this included Govs. Patrick Lucey, Lee Dreyfus, Tony Earl and Tommy Thompson deploying such UW luminaries as David Adamany, Walter Dickey, Ralph Andreano, Charles Cicchetti, Steve Born, Kenneth Lindner and Donald Percy in government service.

But under Jim Doyle, a Democrat, and now Scott Walker, a Republican, a new dynamic has emerged — governors ignoring the UW’s best and brightest to rely almost exclusively on their loyalists and apparatchiks to set policy and run the huge army of state employees.

More than one UW person I talked to spoke approvingly (if not longingly) of the Tommy Thompson era. That’s when an activist Republican governor with Hamiltonian ambitions for a greater Wisconsin found common ground with the university to unleash a major expansion of the UW System, including several billion dollars in campus construction.

How did he do it?

“I realized the university had to be my ally,” Thompson, 74, explains matter-of-factly, as if he were addressing a Poli Sci 101 class. “I had to make the university much more responsive to the needs of Wisconsin. And I said to myself I have to do it in a collegial way, because I don’t have the political power to do it alone. I’ve got to make sure the university understands I’m going to be its best friend. And for that friendship — quid pro quo — they’re going to help me build every part of this state.”

You don’t hear talk like that anymore in Wisconsin. An obvious question calls out: What would Tommy do to improve the sad state of campus-Capitol relations?

To find the answer, please go here.

There are two sidebars with the story. (The whole package is about 5,000 words.) The first reports how Thompson, a life-long UW booster, will be honored at UW-Madison’s spring commencement. The second details how the state’s failing efforts at economic development ignore the recommendations of UW researchers.

 

Categories: Development, Education, Politics, TheDailyPage.com/Isthmus
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Abandoned Mine Ahead

November 30, 2015

A few weeks ago, The Financial Times reported that  the price of steel rebar (the reinforcing rods used in concrete construction) had plunged to a record low on the Shanghai futures market. And the price of iron ore had dropped as well, meaning that mining companies would likely cut production.

That was bad news for the Wisconsin economy. The Badger State has a substantial — but struggling — mining equipment industry in the Milwaukee area.

More to the point, the cooling of the Chinese economy is a major reason why the pipe dream of a revived iron ore mining in northern Wisconsin quickly burst. I examine the flawed thinking of the mine promoters  — notably Gov. Scott Walker and the business group Wisconsin Manufacturers & Commerce–in a piece for Isthmus.

 

Thomas Power, 75, an emeritus natural resources economist at the University of Montana, has studied mining for almost 50 years. He chuckled and said “certainly not” when I asked him in a phone interview if mining iron ore in northern Wisconsin was a good bet for producing jobs and wealth.

“Mining in the United States hasn’t been a growth center or a source of regional prosperity for at least a half century,” he says. “Just look across the country. When was the last time the Iron Range in Minnesota was prosperous? Or the last time when Butte, Montana, was prosperous? Or the Appalachian coal fields? Or the Ozark lead fields? Or the Arizona copper towns?”

The only contemporary success story he could cite was gold mining in the middle of nowhere Nevada, where the workers commute to work.

Reality is that mining operates on a recurring boom-and-bust cycle, he notes, and the bounce-backs are inevitably fueled, in part, by technological advances that reduce the workforce.

Mining jobs, as a result, has been greatly reduced. “It’s like agriculture,” Power says. “The rural Great Plains is losing people. Its not because we’re producing less and less wheat. It’s because we need almost no people to produce the wheat. It’s the same with mining.”

“It’s hard to imagine how some sort of sustainable prosperity can be built around an industry of that sort,” he adds. “That’s not badmouthing mining. That’s just the facts of the matter.”

To read more, please go here.

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Advice For Democrats

April 6, 2015

David Haynes’ column in the Milwaukee Journal Sentinel got me thinking about the need for political realignment in Wisconsin. The paper’s editorial page editor recounted the dismal electoral standing of the Wisconsin Democratic Party and argued the faltering Dems need to rethink and rebuild their party.

I offer my two cents in a guest column in the Journal Sentinel:

First, dial back the vitriol. The hatred and contempt [the Democrats] show for Gov. Scott Walker has been repudiated by the voters. Instead, they should stick to the issues. Look to the future. Embrace the millennials. Champion the tech sector. Celebrate start-ups and entrepreneurs. Support the Ubers of the sharing economy. Get real about unions. Give tough love (and financial support) to public education. Welcome immigrants. Offer a helping hand to the poor.

Most of all, accept the necessity of change. Wisconsin hasn’t. Too often, our political and economic leaders act as if they’re historical re-enactors at Old World Wisconsin. They refight the old battles when the world — and the economy — has moved on.

I made many of these points in a story (see below) that appeared earlier in Isthmus. To read more of my Journal Sentinel piece, please go here.

Categories: Labor, Milwaukee Journal Sentinel, Politics, Tech

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Old School Politics And The New Economy

March 19, 2015

The disconnection between Wisconsin’s growing tech sector and the state’s governing political dynamic has never been greater. This Isthmus story discusses how the Legislature’s decision to enact union-breaking “right to work” legislation left Madison area tech leaders puzzled and dismayed.

“As an employer, I can tell you this has zero bearing on my decision to stay in Wisconsin or to hire more people,” Dan Wilson, a founder of Moxe Health, told me. Other leaders had similar comments.

I write:.

It’s tempting to dismiss the comments of the techie execs as inconsequential because they represent startups and boutique businesses with small workforces. They are midgets compared to the titans of Wisconsin industry who have promoted right-to-work through their powerful lobbying arm, Wisconsin Manufacturers & Commerce.

But ignoring the new kids is a big mistake.

“In every single state, in every single metro area, young firms create the most jobs. That’s true everywhere,” says Dane Stangler, vice president of research and policy at the Ewing Marion Kauffman Foundation, which advocates for startup businesses.

The tech component has certainly paid off in Dane County.

It’s fueled, of course, by homegrown Epic and its rise as the dominant electronic health records vendor in the country. The workforce tops 8,000. Revenue in 2014 reportedly hit $1.8 billion. And because founder Judith Faulkner insists on running the entire operation through its fairyland campus in Verona, the region has boomed economically. Epic alone accounted for 27% of all the new jobs created here from 2001 to 2012, according to Kennelly.

The city staffer’s presentation on the Madison area’s economic dynamics makes a persuasive case that the Dane County metro area is impressively outperforming the rest of the state. With 10% of the state’s population, Dane County accounts for 12% of the state’s jobs, 15% of its economic output and 16% of the businesses created since 2000 and 73% of the net new jobs created in Wisconsin between 2004 and 2014.

The Milwaukee Journal Sentineldiced the numbers in a different fashion and came to the same conclusion: Dane County led the state in job creation between 2003 and 2013, with nearly 20,000 new jobs. That’s three times as many as second-place Waukesha County. Milwaukee County lost 19,000 jobs in the same period.

For anyone who still sees Madison as a cossetted government town — well, they need to think again. Kennelly’s report shows that the private sector is driving job and wealth creation in Dane County. “Our government workforce is effectively flat,” he says.

Even better, the growing industries here support good-paying jobs, namely in the biomedical/biotechnical and information technology business clusters.

“The Madison area is really an economic engine for Wisconsin,” Kennelly says. “State policymakers sometimes like to pick on Madison. A more constructive approach would be to say: ‘What are they doing right, and how can we replicate it in other parts of the state?'”

To read more, please go here.

Categories: Development, Politics, Tech, TheDailyPage.com/Isthmus
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Who Speaks For Tech?

September 23, 2014

So if Wisconsin is trapped in yesteryear politics and economics, as I argue in the story posted above, the business group Wisconsin Manufacturers & Commerce is the exemplar of this thinking.  Here’s how I began this related piece, also in Isthmus:

This is a problem.

The state’s most powerful business voice has conspicuously little contact with Wisconsin’s rising technology industry.

Wisconsin Manufacturing & Commerce, which claims more than 3,500 businesses as members, brags that “the success of the WMC government relations team in projecting and accomplishing a proactive business agenda has been second to none.”

Well, yeah. On the surface, WMC has never been stronger. The support WMC has thrown to small-government, pro-business Republicans has paid off big time, to say the obvious.

Wisconsin has a Republican governor, a Republican Assembly, a Republican Senate, a Republican-favoring Supreme Court and a Republican-dominated congressional delegation.

But critics say that WMC’s success is mostly in pursuing a savvy political agenda — not a savvy growth agenda. And the group’s legislative wish list tilts heavily to helping Wisconsin’s legacy manufacturers. The problem: These venerable corporate citizens usually burnish their bottom lines by adopting strategies that emphasize tax avoidance, lessened regulatory costs and dampened labor costs.

Do they add new jobs to the payroll? Not so much.

To read more, including how the Greater Madison Chamber of Commerce has embraced the tech industry, please go here.

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When Politics Wasn’t So Nasty

September 16, 2014

I’ve written before about Gov. Pat Lucey remaking the Wisconsin Democratic Party and overhauling state government.  I jumped at the chance when WisPolitics.com asked me to cover a memorial service at the Capitol honoring Lucey’s accomplishments. Here’s a chunk of it:

…[I]t was Tommy Thompson, the state’s longest-serving governor, who seemed to capture the moment and draw the biggest applause. He started his speech by saying: “I’m a Republican.” Then pausing for dramatic effect, he added, “Pat Lucey was my friend.” 

In a booming, passionate talk, Thompson explained how he identified with Lucey because they were both Irish Catholic boys and the sons of small-town Wisconsin grocers. He said he kept Lucey’s official portrait hanging in the governor’s office, even though fellow Republicans were puzzled by it. 

“I kept the picture there, because I believed in the man. I wanted to show people the value of bipartisanship,” he said. 

Thompson, like Lucey, achieved some of his most important legislation through a politically divided Legislature. 

“It was the government of a different time, and it accomplished so much,” he said of the Lucey years. “These were civilized days when you could have friends on the other side of the aisle.” 

Democrats and Republicans could battle all day over a legislative proposal, he said, “but then we would go out for a steak and a beer.” 

The Capitol today is marked by “the politics of destruction,” Thompson said, “Pat Lucey never believed in that, nor did I.”

To read more, please go here. 

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The Great Lucey Legacy

May 21, 2014

Former Gov. Patrick Lucey was the most impressive political figure I’ve reported on. His shrewd understanding  of the sausage-making of legislation was matched by a visionary yet practical program for redefining state government in Wisconsin in the second half of the 20th century. In November 2012, I reviewed the Lucey legacy for a column in Isthmus:

Governing from 1971 to 1977, Lucey merged the two university systems, enacted consumer protection laws, strengthened ethics provisions for officials, revamped campaign finance laws, shifted mental health treatment from institutions to community programs and, perhaps most importantly, retooled government aid programs to reflect the progressive vision: Poorer communities, especially their schools, should get more state aid than richer communities. Republicans howled at how Lucey threatened their low-tax enclaves.

Jesuit educated, Lucey saw the moral end in politics. Linda Reivitz, who worked in the Department of Natural Resources, recalls briefing Lucey on the pros and cons of a policy matter only to be interrupted when she veered into its politics. “He put up his hand and said something like, ‘Young lady. I will worry about the politics. You just tell me about the policy options.'”

Notes Jim Wood, another aide: “Pat knew you only walked through this valley once. Politics wasn’t about getting elected. It was getting elected to do something.”

To read  that column, please go here.

When Lucey died on May 10, 2014, at the age of 96, I revisited and expanded the column for a post on the Wisconsin Policy Research Institute website. In a nutshell, I argued that the Democrats need a leader like Pat Lucey:

     It was Lucey, stealing a page from the GOP playbook, who exempted manufacturers from the machinery and equipment tax as an incentive to re-invest in their plants and then removed business inventories from the property tax. All this was hugely beneficial to Wisconsin’s economic wheelhouse in manufacturing.

            In 1977, the Wall Street Journal surveyed Wisconsin’s economic success and proclaimed the state “the shining star of the Snowbelt.” Those days are long past.

           For most of the next 35-plus years Wisconsin’s economy has struggled under Democratic and Republican governors alike. The ferocious 1981-’82 recession laid waste to manufacturing in southeastern Wisconsin and triggered a fundamental economic decline that bedevils the state to this day. For sure, there was a brief boom in the 1990s. But the new century has been a bust. It’s May 2014, and Wisconsin still has fewer jobs than it did in December 2007, just before another ugly recession rattled the state’s economic foundation.

            For Democrats, Wisconsin’s fiercely contested but decisive swing to Republican domination suggests that the powerless liberals need another Pat Lucey. That is, a nextgen leader who understands the imperative of building a vibrant 21st century economy in a state mired in an Old World Wisconsin re-enactment of yesteryear’s political wars. Where is the Democratic leader who recognizes that unions, as vital as they once were, are all but a spent force? Traditional labor is crippled by hostile economic trends, while public unions are reeling as much from their own cupidity and stupidity as from the conservative pummeling.

To read more, please go here.

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