By Brian E. Clark
For WisBusiness.com
MADISON — Wisconsin’s economy may be clawing its way back to health, but the state won’t regain the 130,000-plus jobs lost in the past two years until 2012.
“It will be a long road back and job growth will lag the recovery because this recession was broad and deep,” said John Koskinen, chief economist with the Department of Revenue. He spoke Tuesday at an Assembly Committee on Jobs, the Economy and Small Business.
“A complete recovery from the recession will take years,” explained Koskinen, who said the state lost a decade of job growth in the six months stretching from September 2008 into March of this year.
Unemployment more than doubled during that same period, rising from 4.4 percent to more than 9 percent. At the same time, people with investments in the stock market took huge hits and household net worth in the United States country fell by a stunning $14 trillion.
But Koskinen stressed that Wisconsin had fared far better during the economic downturn than many states in the Sunbelt and that the Badger State was not the epicenter of the meltdown.
“Florida is actually losing population,” he said. He also noted that in six of the past eight years, Wisconsin’s job growth has exceeded Illinois’.
Moreover, he predicted that growth in the state will match or exceed national levels of 3 percent for the third quarter of this year and during 2010. And he said industrial production was up in July, experiencing its first “lift” since 2007.
Koskinen said new hiring will start in early 2010 as the economy builds strength and the effects of federal stimulus money spending kick in.
Zach Brandon, executive assistant at the Wisconsin Commerce Department, also spoke at the hearing. He acknowledged the job losses, but said that changes in state tax policy are attracting new companies to the state.
Thanks to modifications in so-called enterprise zone rules that are aimed at firms seeking to consolidate, he said companies can now earn refundable, performance-based tax credits aimed for not only creating new jobs, but also retaining existing ones and making capital investments.
He said the state’s recent success in keeping Mercury Marine in Fond du Lac would not have happened without recent changes to state tax law. Oshkosh Truck’s landing of recent contracts that will create hundreds of new jobs also were aided by the legislation.
In addition, he lauded the expansion of Act 255, which now gives investors a 25 percent tax break if they bankroll new companies.
“Access to capital is the largest barrier to start-ups,” he said. “But allowing investors to take a 25 percent credit in the first year is a big asset.”
Another change allows investors from outside the state to take advantage of Act 255 tax credits, which Brandon called “almost unique in the nation.”
While most members of the committee praised the work of the Commerce Department, Rep. Rich Zipperer, R-Brookfield, said he was skeptical that the millions of dollars in credits would do much to counter what he said are “billions of dollars” in new taxes enacted by the Legislature.
“I appreciate success stories,” he said. “But we need to learn lessons from the companies that are leaving the state as well. Tax increases can only hurt our business climate.”