Against the backdrop of a looming state budget deficit, participants at a daylong conference on solutions wavered between hope that a federal stimulus package will stave off the worst of the crisis and a sense of resignation that major changes are needed to resolve Wisconsin’s long-term fiscal challenges.
“For years, we’ve had a structural deficit in Wisconsin,’’ said Adam Payne, president of the Wisconsin County Executives and Administrators Association. Meanwhile, the state’s overall economic performance has lagged the rest of the nation and its balance sheet has weakened, with the state’s unrestricted net assets falling to a negative $8.2 billion.
“That’s unacceptable.’’ Payne said. “That’s embarrassing. We’ve got to change our approach and our culture.’’
Where to start? Some 150 participants at conference organized by the Wisconsin Way project addressed ideas centered on economic development, tax reform and government management and spending.
The event, held at the Concourse Hotel in Madison, featured speakers including Gov. Jim Doyle, business executives, local elected officials, educators, state legislators, academics and policy analysts among others.
Todd Berry, president of the Wisconsin Taxpayers Alliance set the stage for participants by detailing the state’s economic challenges – including a budget deficit now estimated at $5.7 billion.
“There is no mistaking that the average wage per worker is much lower (in Wisconsin) than the rest of the country and heading in the wrong direction,’’ Berry said. “Debt has grown — our debt service burden as a state at all levels of government combined has moved us into the top 10.’’
Meanwhile, school aids and Medicaid expenditures together total about 60 percent of the state budget and don’t leave much room for cuts without direct effects on K-12 public education and access to health care, Berry said. When spending on corrections, shared revenue for local units of government and the UW-System is added in, the total reaches 80 percent of the state’s expenditures.
While several speakers urged aggressive action to eliminate some programs and bring spending in line with state residents’ ability to pay, many also said they supported altering the state’s tax structure to encourage economic growth, entrepreneurship and research and development activities.
John Torinus, president and CEO of Serigraph, said state tax policy changes to encourage business investment, entrepreneurship and research and development are in the state’s long-term interest. Torinus said the concept of a human TIF offers a policy option in which the state could provide tuition incentives to encourage higher education. The tuition incentives could be funded with bonds issued against the projected higher incomes that college educated students earn upon graduation.
Several speakers including Gov. Jim Doyle and State Superintendent of Public Instruction Libby Burmaster raised prospects that money from the proposed federal stimulus package could be used to help ease Wisconsin through painful structural reforms in a way that would foster future growth. For example, certain infrastructure projects could actually help increase the state’s capacity for commerce, while stimulus money targeted toward education also could produce long-term economic benefits.
For example, Burmaster said, it may be possible to use some money for learning programs that provide students with the technical skills and flexibility to pursue whatever jobs the economy does create – such the many high-paying welding jobs now open in southeastern Wisconsin.
“We have a great opportunity,’’ Burmaster said. “We need to come together regionally and put this money to work for all of us.’’
Organizers of the Wisconsin Way effort are the Wisconsin Counties Association, Wisconsin Education Association Council, Wisconsin Realtors Association, Wisconsin Transportation Builders Association, Transportation Development Association of Wisconsin, Wood Communications Group and League of Wisconsin Municipalities. Conference co-hosts included Wisconsin Manufacturers and Commerce, Wisconsin Association of Independent Colleges and Universities, Competitive Wisconsin, Coalition of Wisconsin Aging Groups and the Wisconsin Association of School District Administrators.
The Wisconsin Way project has spent two years researching the state’s long-term needs and engaging thousands of citizens in an ongoing discussion about improving Wisconsin’s tax system while ensuring quality government services and fostering job creation. The process generated a Draft Blueprint for Change that will be the focal point for another round of public engagement and discussion during the first half of 2009 and will ultimately lead to a final Blueprint for Change in late summer or early fall of 2009.
