Walker says Wisconsin will aggressively court jobs

By SCOTT BAUER
The Associated Press
Jan 12, 2011

MADISON, Wis. (AP) — Gov. Scott Walker promised an aggressive agenda to cut taxes and make Wisconsin more business friendly Tuesday, even as critics of his initial measures said they don't do enough to lure jobs to the state.

Walker defended his plans during a speech to hundreds of the state's economic leaders at the Wisconsin Bankers Association Economic Forecast meeting, which came the same day that the Legislature began public hearings on four of the governor's proposals.

"We're going to start sending a message, a slow but steady message, that we're lowering the tax burden," Walker said to the sold-out crowd.

Labor groups and other special interests have been vocal opponents of the bills, which include tax cuts for businesses, sweeping lawsuit reform, and eliminating union jobs from a new version of the Commerce Department. Critics say the measures don't do enough to create jobs and they will make it tougher for the average person to sue companies for damages.

The bills also would add about $152 million to the state's budget shortfall already projected to be about $3 billion by the middle of 2013.

Walker said details about how his proposals will be funded will be in the budget he releases next month. All the measures are part of what Walker repeatedly referred to as an "aggressive agenda" designed to better position Wisconsin to compete for businesses. He singled out Illinois, where lawmakers are considering a temporary 75 percent income tax increase, as a state from which businesses may be looking to relocate.

Walker, who took office just last week, has promised to create 250,000 jobs over four years. His mantra ever since winning election in November is that "Wisconsin is open for business."

Walker already has lost touch with the people he promised to help with his jobs creation pledge, said Brenda Giles, 47, an unemployed teacher from Milwaukee at a news conference prior to the public hearings.

"When do we need jobs? We need them right now," Giles said. "We want Scott Walker to know we won't back down until it's done."

One of Walker's proposals would extend a tax credit to businesses that have up to $500,000 a year in gross receipts. That would cost $40 million a year, but only would affect very small businesses in the state. Walker originally had said he wanted to target those with 50 or fewer employees and work is under way among Republicans to refine the bill to get it closer to what Walker originally wanted, which would cost much more.

Another proposal would forgive for two years the income and franchise tax liability for any company that relocates to Wisconsin. The company could not have been located in the state within the past 10 years. That is only expected to cost the state about $280,000 a year.

At the hearing on that measure, Rep. Andy Jorgenson, D-Fort Atkinson, said he was concerned businesses wouldn't actually create jobs in the state, but just do enough to establish residency to qualify for the tax break.

Walker's Commerce Secretary Paul Jadin admitted that companies likely wouldn't come to Wisconsin just for the tax credits, but the incentives would offer the state another recruitment tool.

Walker wants to eliminate all taxes on Health Savings Accounts, which would cost the state $47 million over two years in lost tax revenue, and inject $25 million more into a fund used for economic incentives for businesses.

Walker also wants to reorganize the state Commerce Department into a public-private hybrid focused solely on job creation, require a two-thirds vote in the Legislature to raise income or sales taxes, and give the governor more power in the state agency rule-making process.

Walker said the "vast majority" of the 341 Commerce Department employees would be able to remain with the agency, even though he is proposing that the new entity be staffed with private workers. Union leaders have called for Walker to provide more details about how the transformation would take place and what protections workers would have during the change.

A coalition of groups, including the Wisconsin State AFL-CIO and the Wisconsin Council on Children and Families, spoke out against Walker's sweeping lawsuit reform proposal.

Phil Neuenfeldt, president of the Wisconsin State AFL-CIO, said it was nothing more than a cloak for corporate interests to deny meaningful access to the courts for workers hurt on the job as well as consumers and other victims.

Walker said that while he sympathized with people who have been harmed, he believed that criticism of the lawsuit reforms was misguided.

"There will still be methods under these proposals for people to take action against those who have done wrong," Walker said.

Wisconsin Manufacturers and Commerce, the state's largest business group, has long pushed for the changes that have previously been blocked by Democrats. Walker's changes would provide more stability in the legal system and send a message to employers that the state is improving its business climate, said WMC vice president James Buchen.

The Republican-controlled Legislature was expected to begin voting on most, if not all, of Walker's proposals next week.

Associated Press writer Todd Richmond contributed to this report

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