By Brian E. Clark
MADISON Richard Raphael, executive managing director of Fitch Ratings, praised Gov. Jim Doyle this week for turning the state’s economy around but said Wisconsin’s $1.6 billion budget deficit is a drag on its lower than average bond rating of AA-. Raphael made his comments in a speech at the Wisconsin Economic Development Association’s 10th Annual Governor’s Conference on Thursday.
Prior to the recession the state’s bond rating was AA+, but difficult economic times have led to two downgrades, he said.
"I expect it to improve," Raphael said after his speech. "But only if Wisconsin can make some long-term structural changes to eliminate the deficit."
In the keynote speech of the conference, Doyle praised Badger State businesses and economic development groups for helping create 70,000 new jobs in the last year.
"Our partnership and teamwork with the business community is paying off with some of the best job growth in the country," he said.
Doyle credited his Grow Wisconsin plan, which he said has 150 specific action items, for boosting the economy. He cited regulatory reform, steps to improve the state’s transportation and power infrastructure and grants to modernize businesses and farms as major improvements. He also said that efforts to make the state more attractive to investors will boost the economy.
Raphael, who heads the Fitch Ratings public finance department, said Wisconsin is in much better economic condition than many other states in the country.
"Gov. Doyle’s Grow Wisconsin program has removed regulatory obstacles and done a lot to promote economic development," he said.
"And the state’s budget deficit has been cut in half from $3.2 billion to $1.6 billion two years ago," he said.
"But it’s still not a pretty picture," he warned. "And Wisconsin must fix its budget deficit problems to improve bond ratings."
Because of the state’s aversion to raise taxes, he said the state will have to make more cuts and add employment to improve its credit rating.
Doyle said the state had already made progress in job growth.
"We are number one for creation of new manufacturing jobs and in the top 10 in the U.S. for total job growth," he said. "That is remarkable and I thank you for helping make that happen."
Doyle said Wisconsin had created more manufacturing jobs than the next four states combined. However, he said the state cannot rest on its laurels.
"I’ll believe it’s real when I see two or three years of solid growth," he said. "There are not tricks to it, it’s just hard work."
Doyle also boasted that Wisconsin’s education system is second-to-none in the country.
"The research being done here leads the country," he boasted.
But he said the state needs to make investments in workforce training to get existing businesses to expand and attract new industries to Wisconsin.
"We don’t have palm trees here," Doyle quipped. "But our message to companies is that if they want to produce the best products in the world with the best-trained employees in the world, Wisconsin is the place to be."
Doyle also introduced Mary Burke, his new Commerce Secretary, to the audience. The former Trek Bicycle executive and Harvard MBA will start her new job on Monday.