Milwaukee Biz Blog

2011 will be remembered for many different things. Certainly the protests and the launch of recall upon recall will be among them. But now that the chants and screams have faded and the garbage left behind by protestors has been cleaned up - what 2011 will really be remembered for is change. 

On the day I was sworn in as Assembly Speaker, we inherited an incredible fiscal mess created by the past governor and the previous Democrat controlled legislature. Our state was saddled with an enormous $3.6 Billion deficit and one of the most unfriendly business climates in America. 

Change was needed, the kind of change that is difficult to make; the kind of change that past legislatures and governors had been unwilling or unable to do. It was change that we promised on the campaign trail and we delivered.

From day one of this session, we made it clear that getting Wisconsin back to work again was our top priority. The first task was tackling that $3.6 Billion deficit. Unlike the federal government, we can't just print money.  Our constitution requires us to pass a balance budget. Something different had to be done.

We could have chosen the path taken by Illinois. They raised taxes on businesses and property owners. The ramifications from those tax hikes will be felt for years to come and their economic future is dim.

We took a different route, sending a clear message that we weren't going to balance the budget on the backs of job creators or taxpayers. Our budget wiped out the deficit, stood up to runaway property taxes by instituting a permanent freeze and enacted collective bargaining reform that brought public sector pay and benefits more in line with the private sector. 

Our pro jobs agenda also included:

* Tax incentives aimed at helping the private sector create jobs including the manufacturer's tax credit, a two-year tax holiday for businesses that relocate to Wisconsin, deductions hiring new employees, doubling the state's Jobs Tax Credit and passed the Rural Jobs Act;
 
* Protecting businesses from frivolous lawsuits by passing much needed tort reform;
 
* Eliminating or drastically reducing the amount of red tape businesses face by instituting regulatory and rules reform;
 
* Reorganizing the Department of Commerce into a public-private hybrid which will be more effective in responding to business needs.

The results have been overwhelmingly positive. Nearly every study has shown that Wisconsin's business climate has improved. We had the largest jump of any state in the history of Chief Executive Magazine's annual poll of places to do business, going from 41st to 24th. Surveys conducted by Forbes, CNBC and the Small Business and Entrepreneurship Council's Small Business Survival Rankings all show improvement.

As I have stated many times, government can't create jobs but we can create an environment that encourages job growth. That is exactly what we have been able to accomplish this past year.

We still have an uphill climb. Due to a lack of leadership in Washington, the nation's economy continues to struggle. However, I am confident Wisconsin will lead the recovery and serve as an example for other states to follow. 

Look for us to move quickly with more job-related bills in the coming year.  I expect the much anticipated mining bill to move forward and hope there is movement on a badly needed venture capital bill. 

Other accomplishments this past year include passage of concealed carry and the castle doctrine bill. After years of debate and vetoes from former Governor Doyle, the Voter I.D. law is finally law. 

Yes, 2011 ushered in change. I am excited for what lies ahead in 2012. I hope you have a happy and safe New Year and God bless in the coming year.

State Rep. Jeff Fitzgerald (R-Horicon) is the Assembly Speaker.

Sometimes it’s helpful to look at the actions of others in order to judge the success or failings of one’s own dealings.  Two issues making recent headlines help to put into perspective the hard decisions we’ve made in Wisconsin and the comparative successes those decisions have brought us.  

It was announced this week that the California’s “high-speed” rail stimulus project had jumped in price from an initial estimate of $34 billion to upwards of $98 billion.  Additionally, California has been forced to revise its timeline for the project.  At the time that President Obama passed his stimulus act, proponents claimed that the rail line would be operational by 2020.  Now they admit that trains won’t be running until at least 2033. 

Runaway costs and unrealistic timelines were just two of the reasons that I fought President Obama’s rail boondoggle in Wisconsin and applauded Governor Walker’s decision to kill it.  Imagine the cuts that would have to be made if we had accepted those stimulus dollars and just now were discovering that Wisconsin’s taxpayers would be on the hook for an additional $2-3 billion or more.  While the decision to reject those stimulus dollars was controversial at the time, the situation California now finds itself in proves our choice prudent. 

Another story making headlines is the virtual death spiral of debt that our neighbor to the south has fallen into.  Illinois owes $200 billion more than it has.  As of October it was $5 billion behind in payments to local units of government, private sector suppliers to the state, and health care providers.  Things have gotten so bad that the Chicago Tribune recently ran an editorial with the headline: “Illinois is losing the hearts and minds of the people who put people to work here.”

What has been the response in Illinois to its debt crisis?  They’ve raised taxes and borrowed more.  While we got to work making tough decisions to reform Wisconsin’s government and to cut spending, the Democrat-controlled government in Illinois raised taxes by 66% on individuals and 45% on employers.  Now that taxing has failed, Governor Pat Quinn is proposing to borrow an additional $4.5 billion- an amount that won’t even cover that state’s past due bills up to this point. 

The results are unsurprising.  Unemployment in Illinois just hit 10% (more than 25% higher than it is in Wisconsin) and it looks to get worse before it gets better.  Major companies like Sears-Roebuck and Caterpillar are courting offers to move to other states.

Dramatically reforming the way government does business, as we continue to do in Wisconsin, is by necessity controversial and difficult.  Still, as California and Illinois show, the unfortunate consequences of not making those tough choices can be far more damaging to a state and its citizens than trying to avoid a little controversy.

Wisconsin Assembly Speaker Jeff Fitzgerald is a Republican from Horicon. He is a candidate for U.S. Senate.

It is hard to believe that we are in the final weeks of summer.  By now, many of us have already registered our kids for school. I think some parents will be surprised to learn that, contrary to the claims made by those who fought our successful efforts to eliminate a massive $3 billion budget deficit, our reforms are working and school districts are benefiting because of them.

School districts from every part of the state are coming forward indicating the tools we gave them to offset the necessary cuts are giving them the flexibility to plan for a bright future.  Modest concessions from teachers on their health insurance and pensions are allowing the districts to maintain or expand services, maintain or lower class sizes and avoid layoffs. 

A recent investigative report from WITI-TV in Milwaukee says it all: "Budget Repair Law Leaves Most School Districts in Good Financial Shape." In an e-update at the end of June, I wrote that “The sky is not falling.” More than a month later, the Milwaukee Journal-Sentinel published an editorial that used that very headline.

The examples can be found statewide:

* Lower property taxes - School districts across the state are indicating that their tax levies will hold steady and many, such as the Beaver Dam School District, announced lower property tax levies and mill rates.  In Beaver Dam, administrators tell me the school portion of homeowners’ property tax bills will be going down a whopping 10 percent.
* Lower class sizes - Opponents of Act 10 warned of higher class sizes.  We are seeing just the opposite.  Many school districts, like Kaukauna, are able to hire additional teachers and greatly reduce class sizes.
* Lower health care costs - Dozens of school districts across the state are saving millions of dollars because the teachers’ union insurance monopoly, WEA Trust, has been broken.  Examples include Appleton’s $3.1 million in savings, Baraboo saving $660,000, and Edgerton getting $500,000 back.
* Avoiding layoffs - We said all along that without the changes to collective bargaining, layoffs would be inevitable.  For the most part, those layoffs have been avoided such as in Hustisford.  West Allis called off 200 layoffs and instead gave teachers a raise.
* Merit pay - Using the flexibility Act 10 now provides, school districts like the Menomonee Falls School District were able to institute merit pay.  Raises will go to the best teachers rather than those with the most seniority.

Of course there is one glaring exception. Before it became clear that Act 10 would become law, unions representing teachers said they would accept concessions on benefits. Actions speak louder than words. Because the Milwaukee Teachers Education Association is refusing to open up its contract with the district (as the state budget allows it to do) and make those modest concessions, MPS faces layoffs.

Not only will school districts have more flexibility to better educate their students, taxpayers in those communities also will also benefit. Milwaukee Mayor Tom Barrett, a loud critic of our reforms, predicted the budget repair bill would cause their structural deficit to “explode.” The reality couldn’t be further from the truth. His own budget office crunched the numbers and discovered the city will likely save $61 million over the next two years because of our reforms.

The flexibilities the municipalities now have even allowed the city of Horicon to give its employees a 3-percent raise to offset increased healthcare and pension costs.

As our kids head back to school, the fall session will begin in the legislature.  Our top priority hasn’t changed.  We will continue to reform government in ways that help the private sector grow our economy and create jobs.

If you have any questions regarding this or any other issue, please do not hesitate to contact me at P.O. Box 8952, Madison, WI 53708, call my office at (608) 266-2540 or e-mail me at Rep.Fitzgerald@legis.Wisconsin.gov.

Assembly Speaker Jeff Fitzgerald (R-Horicon) represents Wisconsin's 39th Assembly District.

Editor’s note: In the wake of tax increases approved by the Illinois legislature, Wisconsin Assembly Speaker Jeff Fitzgerald (R-Horicon) authored an open letter to all business owners in the state of Illinois.

Dear Neighbors to our south:

You no doubt are aware of what your legislature did in the dark of night. I too, watched in bewilderment as the Illinois legislature voted to jack up your corporate taxes 46 percent. I can only imagine the sting you, your employees and your customers are feeling after hearing from Springfield that the state income tax rate was going to go up 66 percent.

I just wanted to take a moment of your time to let you know that Wisconsin is “Open For Business”. While your lawmakers are busy making it difficult for you to succeed, we in Wisconsin are working night and day to do the opposite. As your governor smiled, hugged and shook hands with democrats who voted to jack up your taxes, just north of the border, Wisconsin Governor Scott Walker called us into a Special Session on Jobs. Talk about a higher latitude and a better attitude.

We are about lowering taxes, not raising them. Let me outline some of the things we are working on at this very moment. In this special session we will pass a bill to give all businesses $1,000 for each new hire. New businesses that come to Wisconsin will get a tax break for two years. We will help you lower your skyrocketing health care costs by exempting HSAs from taxation. We are busy making the most significant tort reforms in state history to end nuisance lawsuits and to provide employers with the confidence and consistency needed to expand here. We are dramatically reforming our rules process to stop runaway bureaucrats from enacting job killing regulations. To ensure stability we’re considering enacting a law and constitutional amendment that would prevent future legislatures from raising taxes without a two-thirds super majority.

And that’s just in the first few weeks. In the near future we hope to expand our highly successful Enterprise Development Program. Our Jobs Tax Credit will be expanded to help employers grow and create jobs. Dairy and Livestock Investment credits will be extended to spark modernizations and growth in our prized agriculture industry. Regulatory reforms are on the way at the Department of Natural Resources to literally bulldoze the bureaucratic barriers that were put in place against job creation. Also on the way are cuts and reforms to state spending that will allow us to make across-the-board tax cuts for individuals and employers like you in the coming years.

Yes, Wisconsin truly is open for business. Years ago, we had a successful tourism slogan up here. “Escape to Wisconsin.” It was a simple message inviting you to come to Wisconsin and see what we had to offer. Judging by the amount of Illinois license plates at our tourism hotspots, a lot of you are taking us up on the offer. Today, the phrase “Escape to Wisconsin” has never been more appropriate. You can “Escape to Wisconsin” to avoid this tax hit and the others that will surely follow.

The trend is clear. While you cut spending in your personal lives and battled to keep your business sustainable, your representatives in the legislature decided to pass the buck onto you, your employees and your customers. Meanwhile, here in Wisconsin you will find a legislature that is willing to work with you and a workforce that is skilled and anxiously waiting. Members of the Illinois legislature warned what would happen. Senator Dan Duffy called the just approved tax hike the “nuclear bomb” of jobs bills. Representative Dan Reis warned to listen for the “giant sucking sound” of jobs heading out of the state. And Senator Kyle McCarter offered this business tip “invest in moving vans.”

Point those vans north. Escape to Wisconsin. We are open for business and ready for you.

Sincerely,

Jeff Fitzgerald
Speaker of the Wisconsin State Assembly

P.S. You can stay a Bear fan, our tax breaks don’t discriminate.

The past few months on the budget conference committee have been very frustrating. Meeting after meeting, we listened to the Senate Democrats tell us how bad our no-tax-increase budget is for Wisconsin. In turn, we told them that the people of Wisconsin cannot afford $18 billion in tax increases.

Needless to say, there has been almost no progress made on the budget at the table.

Unfortunately, there has been no progress made away from the table either. To put it into perspective, the Senate Democrats are still demanding that all of their tax increases and their government-run health care package be included in a final budget. No matter our offer, their offer stays the same - more taxes.

The concept of budget compromise is clearly not in the Senate Democrat playbook. The bad news for property taxpayers is that the levy limits on local governments that were in place the last two years are now gone. In addition, school districts get to raise their spending levels by law, and if no new state dollars appear, they can raise property taxes for the entire increase. Something clearly has to be done.

With budget resolution nowhere in sight, Assembly Republicans are taking a separate piece of legislation to the floor on Tuesday to protect property taxpayers. This package includes funding for K-12, shared revenue and puts in place a local government levy limit. But that is only part of the story.

When Senate Democrats first heard of our plan, they shot down the idea. Sen. Russ Decker (D-Schofield) declared via press release, "If the Assembly really wants to make sure property taxes don't go up, they will commit to our version of the education budget…"

So we did. 
T

he package we put forward funds education at the level of the governor and restores all reductions in shared revenue to municipalities and counties. Additionally, we put levy limits in place for local governments and technical colleges. The local levy limits will be neither the Senate position of 4 percent nor the Assembly position of 0 percent, but rather a compromise position of 2 percent plus growth, a level the governor had signed into place two years ago. This package saves property taxpayers $600 million over no limits at all.

For this compromise on our part we ask for one simple thing - pass the bill. Protect property taxpayers. But the Senate Democrats are rejecting the passage of their bill because it is only part of the budget. Imagine that, they have a chance to pass their own budget provisions and save taxpayers $600 million and they won't do it.

They claim that breaking apart the budget won't work, although the state broke out the transportation budget in 1995 and passed a separate school funding appropriation in 1999. They don't want to pass the package because it spoils their plan of stalling and using property taxes as leverage to get us to accept other tax increases. 
We put forth a compromise package in the hopes of getting it passed into law and saving taxpayers $600 million. We have asked for nothing in return.

Simply pass your bill, Senators.

State Rep. Jeff Fitzgerald (R-Horicon) represents Wisconsin's 39th Assembly District and is the majority leader of the Assembly.