Milwaukee Biz Blog

Billions of dollars in debt, cuts in state programs, businesses laying off workers, moving out, closing down. This sums up the state of the State. At some point we have to ask ourselves how did this happen?

How did we get here?

Obviously this problem didn't just sneak up on us. Over the past six years or so, every time Gov. Jim Doyle gave a major speech about the economy or delivered his budget address he touched on the same themes: times are tough; everyone must sacrifice; we must tighten our belts. It's almost as if he thought by shinning a light on the situation, then Wisconsinites, and more importantly, voters would not hold him accountable for our problems.

If we credit the governor for sounding the alarm, must we not then ask what has he done to put out the fire? If you looked back at the budget he and the Democrats proposed two years ago, you would discover that while the alarms had sounded, the budget contained $1.78 billion in tax and fee increases in addition to a $1.2 billion property tax increase. I wouldn't call that belt tightening. Nor do I believe that this year's budget is any different.

During his budget address this February, Gov. Doyle mentioned the words cut, cuts, or cutting over 40 times. His budget, however, actually raises taxes by $1.7 billion and increases spending by an astounding 7.7 percent. These tax increases, on everything from gasoline, to hospitals, to phone bills are what are really killing our economy and preventing us from growing.

Ultimately, that's the problem, we're not growing.

If Wisconsin had a tax climate that encouraged growth, and invited people and businesses to relocate here, we wouldn't be in the situation we are in today. If our population increased at a steady rate, the influx of taxpayers and their tax dollars would help us survive the tough times. Gov. Doyle and his tax-hiking record in office have stifled growth and created our current problems.

Despite the governor's claims that our lack of economic growth is a national issue, it isn't. Let's use the example of North Dakota. North Dakota's gross domestic product (GDP) increased 7.3 percent in the first quarter of this year. Not surprisingly, North Dakota started their legislative session with a $1.2 billion surplus. Wisconsin's GDP grew by 0.07 percent and our state is billions in the hole.

Each time the governor and the Democrats raise taxes, another family or another business has to figure out how to pay for it. At a time when personal income rate is stagnant if not declining, and bottom lines are bottoming out, people are forced to decide if they can afford to stay in Wisconsin. And you can forget about people moving here to pick up the slack, it's just not happening.

If we don't institute policies that reverse the course we are on; if we don't grow; we'll never get out from under our mountains of debt. Growth in our economy and population and our ability to pay our bills are directly related. The governor can blame Wisconsin's problems on a national crisis, but in reality it's a Wisconsin crisis.

The alarm sounded long ago, but the fire is still burning.

State Sen. Ted Kanavas (R-Brookfield) represents Wisconsin's 33rd Senate District.

NanoMedex will be a great addition to the business community in Dane County and Wisconsin. Their innovative method of making fat-soluble pharmaceuticals easier for people to take has broad application and unlimited potential.

NanoMedex's statement that the Angel Investment Tax Credit gave them the incentive they needed to move to Wisconsin from Florida is proof that Act 255 is working.

In January, I will reintroduce the expansion of the tax credit I proposed last session.

New industries are being formed in Wisconsin and new investment money is coming into the state, all because of the Angel Investment Tax Credit. Early stage investments in Wisconsin continued its record growth in 2007, totaling $147 million. The 43 percent increase from the previous year in Wisconsin is remarkable compared to the national average, which was 1.8-percent growth.

Hopefully, the Senate Democrats will not stand in the way of the expanding the Angel Investment Tax Credit the way they did last session. Investing more state money into successful programs is just good business.

In the meantime, I want to welcome the officers and employees of NanoMedex to Wisconsin and invite them to take advantage of all that this great state has to offer.

State Sen. Ted Kanavas (R-Brookfield) represents Wisconsin's 33rd Senate District.

For the last several months, the buzz has been building around the filming of a movie about the infamous bank robber John Dillinger. The movie, "Public Enemies," directed by Wisconsin native Michael Mann and starring Johnny Depp, began filming earlier this year in Oshkosh and Columbus and hit the streets of Milwaukee this week.

On Tuesday, I was able to visit the set of the movie inside the refurbished Milwaukee Historical Museum on Old World Third Street. It was exciting to see the action up close and get a glimpse of what it takes to make a major motion picture.

While the filming was going on inside the building, outside was no less active. Nearly a dozen semi trucks crowded the street; crew members, cast and extras moved in and out of a roped off area in Pere Marquette Park, and dozens of people took the opportunity to share in the experience. The event had a true buzz about it.

I was told by a publicist for the film that the cast and crew have been very well received and we have shown the folks from Hollywood that we appreciate their business. We certainly appreciate the money they are spending all over Wisconsin, but why are they here and not Minnesota for example?

The answer is simple: Tax cuts.

It was no coincidence that location scouts for Public Enemies began scouring Wisconsin in January of this year. Why? Because Jan. 1, 2008, was the first day film production companies were able to receive tax credits for doing business here. The film industry tax credit legislation that I authored, known as Film Wisconsin, passed the Legislature with overwhelming bipartisan support in 2006, creating a brand new stream of revenue for our state.

Film Wisconsin provides a refundable tax credit of 25 percent on direct production expenditures and a 25 percent investment tax credit for investing in Wisconsin-based productions. In addition, production companies doing business in Wisconsin can get a 15 percent film production investment credit on expenditures for property and equipment.

Businesses need to make money to exist. Hollywood studios and production companies are no different. Passage of Film Wisconsin sent a clear message to those companies that we wanted them to come here and we were ready to compete for their business.

For too long, Wisconsin failed to compete for entertainment industry dollars, even though it's one of our country's largest export markets. For 20 years, we've referenced the same handful of films shot in Wisconsin like "The Blues Brothers" and "Major League." All the while, states like North Carolina, New Mexico, Louisiana and even Illinois cut taxes on film productions and made millions upon millions of dollars.

Without passage of Film Wisconsin, we would still be hoping that Hollywood would bring its money here instead of being proactive and grabbing our share. Tax cuts and tax credits work. They create jobs, they increase revenue, and they have the ability transform an old economy like Wisconsin's into a modern, vibrant one.

When we cut taxes on film productions, films companies started doing business here. It's a simple cause and effect relationship and the lesson can be applied to several different situations. If we cut taxes on wages, you would have more money in your pocket to save or spend. If we cut taxes on retirement benefits, our retirees think twice about leaving Wisconsin and flocking to Arizona or Florida. Cut taxes on businesses and they flourish putting more money back into the economy and hiring more employees, both of which are good for the overall growth of Wisconsin's economy.

As a state, we have to learn from our experiences. Tax cuts should not be public enemy number one. They work and we need to keep cutting taxes to get our economy growing again.

State Sen. Ted Kanavas (R-Brookfield) represents the 33rd District in the Wisconsin State Senate.

Government-run health care is back in the news and the news is frightening. Massachusetts residents are required to enroll in their state-run health care plan before the end of this calendar year.
If they fail to do so, the penalty is the loss of their personal income tax exemption this year, worth $219. 

If they fail to enroll by the end of next year, they will be fined around $1,000, one-half of the cost of the least expensive health care plan available through the state. The penalty will probably continue to increase as the State of Massachusetts coerces its residents into participating in a health care plan they may not want.

What is the reward for those who do enroll? The cost of the government-mandated health care plan is going up 10 to 12 percent in the first year. So much for controlling the cost of health care.

As the Democrats attempt to convince us that universal health care at lower cost is an achievable goal, the experiment in Massachusetts is failing. Everyone wants something for nothing, and the Democrats are happy to promise it to you, but reality is catching up with them. The reality is that health care costs can only go down when people care about the cost and have an incentive to keep that cost down.
The more shocking part of the news about Massachusetts is the enforcement aspect.

Most liberals agree that "universal" coverage cannot be achieved without a mandate, but what are they willing to do to enforce their mandate? In Massachusetts, there are financial penalties for people who choose not to participate in the government-run plan.  The penalties are severe and can increase in the following years. Is this what we want in Wisconsin?

If there is no mandate, there is no government-run "universal" health care. If there is, you have to enforce it. Do we really want the Wisconsin Department of Revenue telling low-income families to choose between their home and a government-run health care plan with no cost ceiling? Or tell young singles that might not want to participate that they have to pay a huge fine?

We often talk about the need to attract young people to Wisconsin while keeping our kids home. We talk about the importance of providing an educated workforce for Wisconsin businesses. Do we really want to threaten young people with fines for not buying a mandated health care plan? Won't it be more attractive for them to go to neighboring states where they can pay lower taxes and choose their own health care plan in the free market?

The answers to these questions are obvious and anyone who tells you that these "something for nothing" plans will attract workers and taxpayers to our state are attempting to sell you something. Hold on to your wallets.

There is a solution to this problem, but it won't be found in the Capitol in Madison. It will be found in the open market. As legislators, we can use legislation to open up the marketplace and make it more competitive. We can make those markets more transparent and easier for consumers to understand. We should be focusing our efforts on this and not on pie in the sky promises we will not be able to deliver.

State Sen. Ted Kanavas (R-Brookfield) represents the 33rd District in the Wisconsin State Senate.

The Senate Democrats' budget is an all-out assault on Wisconsin's families and small businesses.

The Senate Democrats raise taxes by over $3 billion on Wisconsin families and retain the Governor's job killing tax increases.

The Senate Democratic budget is a business killer, a job killer and reverses the progress Wisconsin's economy has made recently.

Wisconsin's economy is currently growing at the paltry rate of 1.8 percent. Rather than encouraging an increase in our growth rate, Senate Democrats want to slow it down by proposing a budget that expands state government at a rate of 4.5 percent per year. 

Taxpayers simply cannot afford this out of control spending.
Included in the Senate Democrat plan to kill Wisconsin's economy is the largest tax increase in state history which is designed to fund a universal health care proposal. An independent study commissioned by the special interests that are backing this universal health plan says that the Senate Democrats have under-funded their own plan, despite imposing the largest tax increase in state history on taxpayers.

In addition to doubling our taxes with their universal health care plan, the Senate Democrats:

• Eliminate the angel investment tax credit expansion, a successful program that was helping to keep Wisconsin investment dollars in Wisconsin.
• Bring back the combined reporting system which imposes a $130 million tax on businesses in our state, slowing down or reversing economic growth in Wisconsin.
• Eliminate the expansion of the Zoo Interchange in southeast Wisconsin, making it impossible for southeast Wisconsin businesses to expand operations and reducing any incentive that an outside or start up business might have to locate in southeast Wisconsin.

The Senate Democratic budget is a failure. People in Wisconsin are asking for lower taxes, smaller state government and more economic growth, but this budget provides the exact opposite on all three counts. Hopefully, the Senate Democrats will stop placating special interests and call off their assault on businesses and families in Wisconsin.

State Sen. Ted Kanavas (R-Brookfield) represents the 33rd District in the Wisconsin State Senate.