Governor Doyle: Launches New Economic Development Initiative – Grow Wisconsin: The 2005 Agenda

Ethnie Groves, Office of the Governor, 608-261-2156

MADISON, MILWAUKEE, GREEN BAY – Governor Jim Doyle today launched his new economic development initiative – Grow Wisconsin: The 2005 Agenda. The agenda focuses on three areas: investing in business, investing in people, and fostering a competitive business climate.

The 2005 Agenda seeks to build on the tremendous success of Governor Doyle’s Grow Wisconsin plan he announced in September of 2003. Since then the Governor has signed virtually every piece of legislation called for in the plan – eliminating the tax on creating jobs, streamlining regulations, investing in industry, and improving our business climate.

The results of Grow Wisconsin have been significant. Over the last two and a half years, Wisconsin has created nearly 140,000 new jobs. In 2004, the state marked its third-straight record-setting export total with sales of more than $12 billion. And Wisconsin’s total personal income is expected to grow at an impressive 5.7 percent this year, outpacing the growth in U.S. incomes.

“We have accomplished a lot – but there is still more to do,” Governor Doyle said. “Too many of our citizens are still out of work, while others are struggling to make the jump from an $8 an hour job to a $15 an hour job. It’s time to take the next steps of Grow Wisconsin so that every part of the state and every part of the population has a chance to get ahead.”

Invest in Business:

Unleash $500 million in New Economic Development and Affordable Housing Activity

The WHEDA modernization bill will make a number of changes to improve WHEDA’s ability to help finance homes, upgrade housing stock, and preserve affordable housing.

The modernization bill will increase income limits in 26 counties. This will help more households in predominately rural counties purchase a home with WHEDA below market rate financing. The economic impact of increased home purchase will reach into the hundreds of millions of dollars. This bill also will help more households across the state purchase their first home with no down payment. Saving for down payment and closing costs is a major barrier to homeownership for low and moderate income working families. This bill will help reduce the cost of an appraisal and eliminate down payment requirements for households with good credit histories.

The Governor’s Task Force on Affordable Housing Preservation identified the need to preserve housing currently serving the lowest households in our state. The Modernization bill increases the bonding limit for multifamily financing to $600 million. This will give WHEDA the capacity to provide financing to preserve and rehabilitate existing affordable housing. Without this increase, WHEDA’s bonding authority would be exhausted within the next 12 months.

Deploy $30 million to Support Business Incubators

New, start-up businesses play a vital role in increasing the number of good-paying jobs in Wisconsin. Governor Doyle has worked to increase the number of these businesses by signing legislation to increase angel and venture capital investing and working with the Legislature to remove barriers to UW faculty start-up companies.

Whether they are faculty researchers, existing entrepreneurs, or first-time business owners, everyone needs space to develop their new businesses. From the Biomedical Technology Alliance in southeast Wisconsin to the Nanorite project in the Chippewa Valley there are projects in need of resources for this type of activity. Governor Doyle is directing WHEDA to deploy $30 million in bonding to support efforts to create more business incubators.

Create Incentives to Locate Businesses in Distressed Areas

As part of Governor Doyle’s budget, he proposed and signed into law a major reform of Wisconsin’s Economic Development Zones program, granting the state the authority to create more economic development zones and to make the tax credits available to multiple Wisconsin businesses.

Businesses that make a commitment to locate in these zones and create new, full time jobs paying at least 150 percent of the minimum wage will have access to up to $3 million in tax credits. Statewide, up to $170 million in additional tax credits will be deployed for businesses that make a commitment to create new jobs in these areas.

In addition, Governor Doyle is calling for the creation of a new flexible grant program – the Super Employment Economic Development Zones (SEEDZ) – to assist companies that create jobs in the state’s areas of highest unemployment. Grants provided to businesses could be used to cover employee transportation costs, pay for utilities, and subsidize childcare for workers hired from the area. SEEDZ, in combination with other programs, such as the brownfields programs, would allow businesses to succeed in these areas.

Expedite Venture Capital and Angel Investor Tax Credit Expenditures

Governor is supporting new legislation to update the angel and venture capital tax credits created in Act 255. This new bill will make the program more attractive to investors without raising the cost of the program. Specifically it allows venture capital fund managers to allocate their tax credits in order to benefit both tax-paying investors, like individuals, and tax-exempt investors such as the State of Wisconsin investment board. The bill also corrects a flaw that could have inadvertently delayed venture capital investments being made through the program. Governor Doyle has also directed the Department of Commerce to evaluate the program, engage stakeholders, and make any necessary recommendations to improve the program.

Invest in Electronic Patient Record Medical Technology

Governor Doyle supports legislation to exempt from state taxation bonds issued by the Wisconsin Health and Education Facility Authority so the proceeds can help health care providers implement electronic medical record systems. According to the U.S. Institute of Medicine, more than $6 billion is spent annually on unnecessary, inappropriate, or redundant care. Deploying this technology into our health care system will help to provide clinical decision support, improve patient safety, improve the effectiveness of medical care, and lower health care costs.

By Executive Order, Governor Doyle will create a new Board on Health Care Quality and Patient Safety including members of his cabinet, health care leaders, and others to develop a roadmap for statewide use of electronic medical records within a consistent framework that shares information to improve patient care while protecting patient privacy.

Invest in People:

Increase Funding for the Youth Apprenticeship Program

Governor Doyle will call for new legislation to double the state’s investment in youth apprenticeship by providing an additional $1.1 million annually. It’s important to put young people on the path toward work that allows them to gain new skills and earn a living.

Create the Trial Jobs Plus Program

To improve on Wisconsin’s record of welfare reform, Governor Doyle is proposing new legislation to move Wisconsin Works (W-2) participants into permanent jobs, enabling them to provide for themselves. The legislation will require the Department of Workforce Development to implement a “Trial Jobs Plus” pilot project. As many as 1,000 W-2 participants will be enrolled in an enhanced version of the existing W-2 Trial Jobs employment program. The goal is to help individuals gain permanent, unsubsidized employment in the private sector and increase their earnings. Pilot participants will also be eligible for federal and state earned income tax credits, increasing their income and ability to support their family.

Strengthen Prevailing Wage Enforcement

Prevailing wage statutes require contractors working on public works projects to pay their workers competitive wages. The prevailing wage requirements ensure that employees are able to maintain a reasonable standard of living for themselves and their families. Governor Doyle wants to increase prevailing wage monitoring and enforcement throughout Wisconsin to ensure that workers are receiving the wage they deserve for their services on public works projects.

Foster a Competitive Business Climate:

Help Manufacturers Become More Competitive

To continue to move Wisconsin’s manufacturing sector to the high end, Governor Doyle will propose new legislation to establish a Manufacturing Competitiveness Council, and provide $1.5 million to help manufacturers assess their ability to compete, adopt new technology, and improve the efficiency of their manufacturing processes. The Council will make funding recommendations in performance benchmarking, supply-chain development, new technology or product development, and lean manufacturing.

Provide Sales Tax Exemption for Inputs in Bio-manufacturing Industry

Although companies growing inputs such as tissue or cell cultures for sale to biotechnology companies for research and development have the characteristics of manufacturing or farming, they do not meet the requirements to qualify for sales tax exemptions.

Governor Doyle will propose new legislation to create an exemption for businesses creating research inputs that are sold to businesses and governmental units for exclusive and direct use in research and development to encourage expansion of the biotechnology industry in Wisconsin.

Diversify Wisconsin’s Energy Portfolio

Governor Doyle will call for legislation to require that all gasoline in Wisconsin contain 10 percent ethanol. With gas prices at record levels, passing this bill will assist with lowering gas prices because it is more cost effective to produce ethanol than gasoline.

Wisconsin currently consumes approximately 2.6 billion gallons of petroleum per year, and the state’s ethanol production will increase from 205 million gallons per year to approximately 255 million gallons per year by 2006. Therefore, facilities in Wisconsin will be able to produce all the ethanol the state needs to meet the 10 percent standard.

Support Regional Economic Development Efforts

In today’s increasingly competitive – and increasingly global economy – regional cooperation is vital. What happens in one community affects the whole region. Economic gains and losses know no political boundaries.

It is with this in mind that the 2005 Agenda calls for making investments to encourage regional partnerships among business, education, economic and workforce development to promote growth while identifying and addressing regional workforce development issues.

Governor Doyle has directed the Department of Commerce to pilot regional economic development initiatives led by the private-sector, two of which are currently underway in the Greater Milwaukee and Fox Valley areas. The Department of Commerce is also creating a voluntary pilot program that gives the communities the option to consolidate their funds at a regional level to gain administrative efficiency, a broader deal pipeline to invest in, and new flexibility in investing the money.

“We’ve made great progress, but now it’s time to take the next steps,” Governor Doyle said. “I am going to stay focused on creating jobs and growing this economy. And I am asking the Legislature to do the same. We have serious work to do. If the legislature is willing to get past the political games, I’m confident that we can take some important steps forward for Wisconsin’s economy … and its people.”

Read Governor Doyle’s new economic development initiative, Grow Wisconsin: The 2005 Agenda: