By Tracy Will
The state’s new commerce secretary said today that recent state budget numbers may have underestimated the size of a potential deficit.
“The governor said we have a $3 billion dollar shortfall. I think he easily could have said $4 billion,” Commerce Secretary Richard Leinenkugel told the Wisconsin Economic Development Association at a conference in the Wisconsin Dells Tuesday.
The former beer company executive said the state is facing tough times.
“State government is in a hiring freeze. We’re putting together a 10 percent budget reduction. The warning bells went off in August. Sales tax receipts were down 10 percent, income tax down 4 percent. We’ve seen a further slowdown in September and October will not get any better,” Leinenkugel said.
To counter the tough economy, Leinenkugel offered the Doyle administration’s proposal to retain existing businesses, speed up tax breaks for “angel investors,” and promote what he termed “Next Generation Manufacturing.”
“We’re going to reform the Chapter 225 laws to permit angel investors to deduct 25 percent of their investments in the first taxable year, where the current law is two years,” he said. “And we’ll raise the business cap for angel investors from $1 [million] to $4 million.”
Leinenkugel stressed the need for manufacturing businesses to adopt a series of steps to remain competitive in the global economy. His description of “Next Generation Manufacturing,” included six steps he said were vital to making businesses competitive.
The “Next Generation Manufacturing” proposal includes suggestions that businesses focus on customer-focused innovation and continuous improvement on par with 15 percent productivity gains annually. It also addresses “going green” and engaging globally because global markets are growing at a rate three times faster than the U.S. market.
Drawing on his prior job, he promised to help businesses across the state.
“Growing up in Chippewa Falls, I know that economic development does not stop north of Highway 29,” he said, “that’s north of the tension zone, and I’m now discovering why when I get north of there, I feel I can finally relax.”
He also urged attendees to contact the Commerce Department to weigh in on development policies.
“Pick up the phone and tell me what works and what doesn’t. My door will always be open. I want to help you seize upon those developmental opportunities, and if you hear about someone who’s interested in expanding their business or moving here, please call one of our area development managers,” he asked the WEDA conference attendees.