cc >> Jeff Mayers: This is the
sixth year for this event, and it's the third year in a row
for a sell out crowd. That's attributed to all of you
of course and to the high profile guest speakers and the
organizers who help make this happen.
They are primarily the Wisconsin Bankers Association, the
Wisconsin Realtors Association and the Greater Madison
Chamber of Commerce. Now before I introduce our
special guest, allow me to recognize our presenters for
this year, the Wisconsin Bankers Association.
And Kurt Bauer, the president, is over here to the right.
Wave, Kurt. [APPLAUSE]
We also want to thank all the other sponsors.
In addition to the Greater Madison Chamber of Commerce,
the Realtors Association, the Boardman Law Firm,
News/Talk 1310 WIBA, WisBusiness.com,
American Family Insurance, the Capital Region Business
Journal, RSM McGladrey, MG&E and
Wisconsin Business Development. [APPLAUSE]
Now you may already know this, but just last week
our first speaker was sworn in as Wisconsin's 45th governor.
In his inauguration speech, Scott Walker proclaimed
once again that Wisconsin is open for business.
I think you're going to hear that phrase every once in a
while. And he's here to tell us about
his plans to grow the state economy.
So welcome Governor Scott walker.
[APPLAUSE]
Governor Scott Walker: Thank you.
[APPLAUSE]
Thank you, Jeff, for that introduction.
It's good to be back here. Last time I was at Monona
Terrace you might have saw, at least one of the papers had
Tonette and I on the front page dancing.
I had to laugh, that night Alberta Darling, my good friend
state senator, sent me a text, and she said, where in the world
did you find time to learn how to dance?
I said, it was Monday nights at 8:30 on the way back from budget
briefings. So you can squeeze just about
anything in. And thank you to the Wisconsin
Bankers Association not only for being the lead sponsor and
putting this on and all the other groups that are here
today, but thank you for Kurt and the team and the board's
leadership. We're pleased today, I know
we've got a wide representation of business interest, but
particularly from a banking standpoint, I'm proud to have
selected a great cabinet but particularly when it comes to
the Department of Financial Institutions and the Department
of Revenue, two outstanding secretaries who I think are
going to be a great asset to our financial institutions here in
the state of Wisconsin. I appreciate your recognizing
them as well. We know that when it comes to
financial institutions in this state, Peter and I were talking
about this before he came and joined our team, but if we're
going to help businesses grow in this state, if we're going to
truly show that Wisconsin is open for business, one of most
important things is to have a healthy financial environment so
that our banks and other institutions can loan to our
small businesses, to our family farmers, to others who want to
expand in this state. And so we're going to be working
very hard through both DFI and making sure the Department of
Revenue as well works hand-in-hand with our financial
institutions to make sure our state can grow.
Jeff alluded to this, I said it last Monday, many of you saw it
the night of election, but I had a plaque up on the front of the
podium, kind of like the one up here right now, and I said to my
staff in the days leading up to it, they said should we put a
brown bag plaque up there, should we put a Scott Walker
believe in Wisconsin again sign? I said, no, the election will be
over as of November 2nd, we need to start sending a clear
message. So I literally asked them to
make up a sign that you saw that night, November 2nd, that said
Wisconsin is open for business. Now that was a symbolic change
but starting last Monday, and you've seen it even today with
some of the hearings that are being held in the state assembly
and the state Senate, we're showing that that was more than
a symbolic change, that is a substantive change to show all
the people and all the employers in this state, and even more so
these days all the employers and people in other states, that
Wisconsin is indeed open for business.
And I want to talk to you about that because we've got some
great plans to get Wisconsin working again.
It starts with our special session jobs plan, and it
continues in about a month as we introduce our budget for the
next biennium and then we continue working on with our
friends and colleagues in the state assembly and the state
senate, with all of you across the state helping us get that
message out. When it comes to special
session, now couldn't be a better time than ever.
You look at what they're doing in Springfield in contrast to
what we're doing here in Madison, and there couldn't be a
better contrast. I mean think about it.
They're talking about a 75% increase.
At first I thought I was reading "The Onion" the other day
when I saw that. I thought a 7.5% would be
a pretty bad increase. They're talking about a 75%
increase at a time when even in facing tough, difficult
challenges we're trying to show that we're going the opposite
direction. We're going to start sending a
message, a slow but steady message that we're lowering the
tax burden. As times get better in terms of
this budget process we're going to be even more aggressive in
terms of changing the tax climate here in the state.
But right off the bat, particularly for small
businesses, we're working with our allies in the legislature to
move forward a series of changes, not the least of which
is lowering the tax burden on small businesses, improving
adding an incentive so that as we go to Rockford and Chicago
and Springfield and other places and tell employers to come up to
Wisconsin we're also going to have a tax incentive for them to
bring their corporate interest out of Illinois and other states
and into the state of Wisconsin to put more people to work here.
We're talking about working with the legislature to put in place
a change that says that to those employers looking to grow that
are here as well as others coming in from other states that
we're going to send a message that not just in this current
administration but into the future there's some degree of
protection against tax increases with the super-majority
requirement for future tax increases so we can keep a
steady keel on where taxes are in this state.
And we're looking to enhance our economic development tax credit
program so we can attract even more businesses to grow in this
state. A good example, I won't mention
their name because the deal is not done, but I had a
significant employer, a good mid-sized manufacturer here in
the state of Wisconsin come and meet with us yesterday.
She was so excited after the election and after the
inauguration last week. They've got a facility with
about 135,000 square feet. They've got a good customer base
out there that wants them to grow, and so they're going to
more than double the size of their operations.
They want to add another 200,000 square feet facility next to the
one they have right now. And they're facing the same
sorts of challenges. They want to know the state is
going to be a partner with them and that long-term it's going to
be stable to do business here. They also mention as an aside,
they're probably looking at a number of you here, they want to
have a good bank partner with them to help them finance the
deal along with the state and with their local community and
the bid that they're looking to have in place.
But that's part of the excitement out there.
So one of the things I mentioned last week in the inauguration
is that while there are certainly plenty of people
and plenty of employers in this state hurting, and we by no mean
overlook that, but the reality is that there's an awful lot of
employers like the ones I met with yesterday who would like
to add more jobs in the state. They just needed a clear and
consistent message that things were going in the right
direction. You see, up and before the
election they were worried seeing these numbers about the
budget deficit that we faced, over $3 billion.
They were worried about some of the regulations and standards
that were being imposed on them that it would be more difficult
to do business in this state. And instead, even in this past
week, they've seen it's just the contrary, that we're moving in
the right direction. So we want to cut the tax
burden, particularly for small businesses.
Secondly, today we introduce the official legislation that's part
of this special session package, but it's about specifically
reforming the regulatory climate here in the state of Wisconsin.
One of the things I hear repeatedly from small
businesses, from many of you here, as well as for those of
you in the financial industry know from many of your clients,
as much as the tax burden, it's the cost of regulations,
compliance with regulations and litigation costs in this state
that are having a devastating impact, particularly in our
small businesses. We're putting forth legislation
today, we've talked about but the actual draft comes out
today, that will change the administrative code process in
the state. We have one of the broadest in
the country. It needs to be reigned in.
We need to make sure it not only empowers the executive branch of
the governor but the members of the legislature to say if they
pass laws, the administration should be administering those
laws. The bureaucracy shouldn't be
expanding beyond what those laws were in the first place.
Instead it should be honed in on fulfilling the legislative
intent of the statutes as they were defined through the
legislative process. And to make sure that happens,
before anything gets through its final phase it's going to have
to come to the governor's office under our proposal.
To me that's one of those insurers that you don't get
administrative rules that really have not had the ability to have
the elected branch, both in the executive and the legislative
branch, the elected officials of this state ultimately
responsible to all of you to make sure there's a balance.
A balance between protecting public safety and public health
but also making sure we protect the economy and the people of
this state, and that's exactly what these changes in the
administrative code process are going to be about.
We also added another element that's maybe a little foreign
or at least has been foreign in Madison and the
capitol for some time, we put in place a cost benefit analysis.
We actually believe there should be an analysis to how much this
is actually going to cost the private sector and whether that
outweighs whatever other public safety, public health interest
there is out there so that we're only putting forward things that
have a vested interest for the entire state, not just for the
state government. So we're making changes in the
tax burden, we're making changes in the regulatory burden, we're
making changes, today there was a hearing held on our proposed
changes in the litigation, the lawsuit abuse burden in this
state. We want to pass aggressive tort
reform that says if somebody does wrong, certainly they
should be held liable for that. But there shouldn't be this
situation where our small businesses across this state
under a position where they're constantly playing defense
against frivolous lawsuits. If this legislation passes,
we're going to change, remember five years ago when the "Wall
Street Journal" ran an editorial that called us "Alabama North."
We're going to be the opposite. We're going to show that we got
the message, we woke up and it's about time we start sending a
clear message that you can afford to do business in
Wisconsin. To me, passing this legislation
is one of the clearest ways we can send a message that's better
than just a sign board but a message to employers, about
two-thirds of whom when surveyed said the litigation environment
in a state has a significant impact as to whether or not
they're going to place their jobs there or not.
We want to be one of the states where we say through our
legislation, through our administrative code and through
our litigation environment that Wisconsin is indeed open for
business. On top of that, a couple other
quick changes. We want to change and make it
more affordable for workers and for family farmers and others to
afford access to quality healthcare.
And so one of those options amongst others we'll pursue in
the budget, but one of those options in the special session
package is to change, right now we're one of about four states
in the country that still taxes health savings accounts.
We need to change that. We need to get in line with
where nearly everybody else is at.
We need to say it's affordable for you to access health savings
accounts. If you want to control your own
destiny, if you want to do that for your employees and others
you work with, you should be able to have that option
without the burden of the state income tax imposing an added
burden on you doing that. So we're going to change that as
well. And finally in this special
session package we're going to repeal what's currently in place
as the Department of Commerce, and take the Department of
Commerce, which now spends a fair amount of its time
regulating commerce, and instead transform that into the
Wisconsin Economic Development Corporation, an entity whose
sole purpose is to promote commerce in the state
of Wisconsin. We're going to do that in a
public/private partnership that still has accountability to the
legislature and to the governor and still has accountability to
the taxpayers of this state but is nimble enough to act on
economic development interests as they devolve and not months
and years down the way after it's happened.
We need to be more aggressive in pursuing economic development
interests right here in this state as well as attracting
those in from other states out there.
We do that, the first step is passing this legislation to
create the corporation in the budget will fully enact the
changes, and then you'll see as part of that one of the things
we're looking to do is take the regulatory elements that are
left in the Department of Commerce and put them into
what's now the Department of Regulation and Licensing.
We put a new secretary in place who's devoted to customer
service to actually working with the consumers of this state.
We're working with the businesses and professionals of
this state to make sure we've got an agency that actually
responds to your needs and interests and doesn't stand in
the way of progress there as well, but to take commerce and
make it solely focused to this economic development corporation
on pushing the creation of more jobs in the private sector, not
in the public sector but in the private sector, for the years to
come. That's an exciting agenda that
it's hard to believe just a weekend I was talking with
John Fund from the "Wall Street Journal" the other day and he
said, wow, how do you get that all going in one week?
Well we didn't start doing it last week, we started doing it
the day after the election. And many of you here have helped
us throughout the process and we thank you.
We're going to need your help to continue to push for that.
The good news is our friends in the Assembly and the Senate are
eager to act on that. They're eager to move forward.
We've been talking with them even in this past week about
some tweaks and a few adjustments out there, but I
think if everything works out right we might even have the
majority, if not all the package by the time we give our
State of the State address at the end of this month.
That would be a compelling time to send a clear message here and
to other parts of this country and around the globe that
Wisconsin is indeed open for business.
The other thing we need to do to get Wisconsin working again is
not only in the creation of jobs in the private sector but to get
the state government working again.
Because stability in our government will help us move
forward as well. And that's something, I'll give
you just a little preview of some of the things we're working
on for the state budget and I'll be working on it again this
afternoon. We're facing a little over
a $3 billion deficit going into the next two-year budget
starting July 1 of this year. Now that's a pretty formidable
obstacle. We talked about that in the
past. We're not going to use raids on
things like the transportation fund or the patient compensation
fund. We're certainly not going to
rely on a federal stimulus package because that certainly
is not there nor do I think that's good prudent policy from
a fiscal standpoint. So we're going to move forward
on doing things the old fashioned way.
We're going to adjust things just like you do in your
businesses and your homes. We're going to make some tough
but compassionate decisions about moving this state forward
not only to balance the current budget but to ensure that we
don't just keep kicking the can down in the future and pushing
those decisions off to future governors and future
legislatures. That's why we're facing the
trouble we face today. Frankly that's why not only
Wisconsin but the vast majority of states across this country
are facing these same sorts of challenges.
In case you missed it yesterday, Jerry Brown, the new governor,
well new again, I guess you would say, governor.
He was governor back when I was in kindergarten in California.
Don't laugh you probably think that was just a couple years
ago, right? But he's back again.
Well Jerry Brown actually went ahead and if you didn't notice
it yesterday, he ended up passing or proposing a budget
that cuts spending in California by $12.5 billion.
$12.5 billion. He cut about $1.4 billion
out of the University of California system out there.
Social services, other programs, he took and imposed for just
about every state employee in the state of California about a
10% net reduction in terms of take-home pay.
They're in trouble. They and Illinois are in a whole
different stratosphere when you look at their bond rating, when
you look at the chart and they're off on their own
category over there. But they have to make some
significant reductions. You look at New York state where
Andrew Cuomo, another guy whose father was governor when I was
in kindergarten I think, Mario Cuomo, but another Cuomo is
governor there. He's talking over a billion
dollar cut when it comes to Medicaid in that state.
In fact, Jason Helgerson, the former Wisconsin Medicaid
director, is now the leader of that initiative in the state of
New York as well. There are going to be governors
in nearly every state, over than maybe the Dakotas where they
have the value of some natural resources that are helping them
balance their budget, but short of that we're going to be in the
same boat as everybody else. The difference is we're not
going to punt it into the future.
We're going to resolve it now so that we don't have to keep
coming back and facing the same sorts of challenge from the next
budget and the next budget and the next budget after that.
That really means honing in on three core areas.
One you've already heard me talk about quite a bit.
This last month when the legislature, the lame duck
session of legislature talked about voting on a package for
state employees, we asked them, and thankfully were successful
in the fact that they did not pass them, because we have to be
given flexibility when it comes to wage and benefit reform.
What I mention as an example is if every state employee were to
make a 5% contribution to the pension system.
Not exactly a radical concept. That's still less than what the
average is out there for employees.
But a 5% contribution to the retirement system and a 12%
premium contribution for their healthcare.
Again, not exactly an out of line proposal.
That would save us for the first six months of 2011 $154 million.
You compound that by four over the two years, the four halves
that I'm talking about of the next biennial budget, and you
can see that quickly adds up to a lot of money.
That's just state employees. Imagine if local governments
were able to do the same sorts of things with county, city,
town, school district employees, what the kind of impact that
could have. That means, in turn, we also
have to partner with local governments because a good
chunk, the majority portion of discretionary budgeting from the
state standpoint is money that goes back to local government,
particularly to school districts but to others as well.
If we're going to make any adjustments there we've got to
make we sure we do so in a way that frees up those local
governments through age and benefit reforms there as well
so that in the end the product, whether it's classrooms, whether
it's plowing, whether it's police service or other things
like that, the core services that we all expect and demand
out of our local governments is something that can continue even
after the state budget is put in place as well.
And then finally, we've got to tackle big issues like Medicaid
and others and make sure that those elements of our budget
don't grow out of control. Now we're committed to doing
that. I literally started the
afternoon of November 3rd. We've been in just about every
day and every weekend since talking about that with the
budget. Again, so many of you from
across this room and across this state have been helping us
throughout this budget process. We're going to be aggressive
about that. We're going to be very ambitious
in how much we push the edge of the envelope when it comes to
this budget because we have to. But the good news is when we do,
we set a steady standard for, I think not only years, but
decades to come that Wisconsin's budget is going to be back in
control, and we're not just going to cut things, we're
looking to make things work better.
To me it's not just acceptable enough to balance a budget just
by cutting things. We've got to have a pro-growth
agenda that pushes us forward and puts more people to work
which long-term will bring more revenue into the state.
At the same time in the other areas where we make cuts that
reduce the size and scope of the government, we've got to make
sure the things that we do we do well and we do effectively and
that's our charge and that's my promise to you as part of our
administration. You can tell, and I spoke
quickly because they gave me about 15 minutes, so I apologize
if you had a hard time digesting that last of your dinner.
There's a lot to go through here today.
I get pretty excited about it. But for us, I feel positive
about the future of this state. There's no doubt, don't confuse
that for one minute that I don't recognize that people and
employers in this state are hurting.
But I know that the basis for our recovery is in place.
Our plan for renewal is based on not just some theory out there
but based on the fact that touring this state for nearly
two years leading up to this election, I've seen that
kind of will power out there and I've seen the fact that
what is failing us has not been our people or our places
in this state. What has been failing us, I
believe, for the last many years I can think of has been the
expanse of our government. We get that under control, we
move that state forward, we start focusing on creating jobs
not in the government but within the private sector and we're
going to get this state moving in the right direction.
The last thing I want to ask you and then I'll open it up to Jeff
moderating some questions is just this: remember nothing else
today, I've got one last request for you, and that is take a bit
of what we talked about here, take the contrast with Illinois,
take the contrast with California and other states out
there, take the agenda that we've talked about that we're
moving forward to send a very clear message about this state
being open for business and putting people back to work
again and share it. I look around the room and I see
a lot of business leaders, I see a lot of civic leaders in this
state and you might think okay you're preaching to the choir.
My father was a pastor and I heard not too long ago somebody,
a pastor, say, when asked why do you preach to the choir,
he said, it's real simple, I preach to the choir because
I want the choir to the sing. I'm asking all of you to sing.
I'm asking you to go back to your own communities, I'm asking
you to go back to the rotary and the Kiwanis and to your chambers
and anywhere else where you can spread that message and
start singing about the changes even in this past week that are
happening here in the state of Wisconsin and the impact that's
going to have on employers like yours and others that you
represent all across the state and then spread it to other
friends that you have outside of our state's borders.
That Wisconsin is indeed open for business.
When we do that I have no doubt we can get this state working
again both when it comes to jobs and when it comes to our state
government, and I look forward to your help in doing it each
and every day. With that, Jeff, I can take some
questions if you like. [APPLAUSE]
Stay right there. Okay, we have time for a few
questions. So Mike and few others are going
to have a microphone here. If you have a question, raise
your hand and they'll come over to you and you can ask a
question of the governor. Don't be shy.
Raise your hand if you've got a question.
I don't see any out there. >> They're just so happy with
what I've said, they're ready to go sing.
That's it. >> They're tuning up right now.
There's one over here. >> We got a question right over
here. Mike, over here.
Right over here. >> David, stand up.
I'll repeat it for you too if you want.
All right, David Locke of McFarland Bank.
Governor, welcome. Thanks for being here today.
My honor. >> I just read recently in one
of the periodicals that there's a bill idea being floated around
in the capitol to over time eliminate capital gains tax.
And Wisconsin, of course, having to compete with other states on
the tax issue, I'd like your comments on that.
Yeah, I think it's a great idea.
I believe that Senator Randy Hopper is talking about
repealing the changes that were made in the past budget.
I support that. Figuring out the right way and
the right method to do that. He's got the bill, we'll have to
look at other ways of doing that but I think that makes sense.
And frankly long-term, I don't know if this component could be
done right away in this budget but I'd love to eliminate it
outright for investments made here in the state of Wisconsin.
Right, another question?
Governor, I'd like to also congratulate you on the
election. >> Thank you.
I'd like to know your position on the voter ID.
I've read about it. I'd like to ask you elaborate on
it a little bit and the E-Verify for the illegal immigrants
situation. >> Sure.
Two different parts. One, it's pretty simple on voter
ID. I was the author of the bill
10 years ago when I was in the legislature so no great surprise
I'd sign that presuming it gets to our desk.
And my guess would be it will come up relatively soon through
the legislature just because I think there's a fair number of
people that would like to have that in place by the spring
elections of this year having an impact on a number of key local
races as well as the State Supreme Court.
The other part is on immigration.
To me, I've said in the past I would support an Arizona type
law in terms of immigration and believe, short of that as well,
that in terms of enforcing immigration we shouldn't be
providing public assistance or other things that encourage
those individuals who are not here legally in the state of
Wisconsin. Now having said that, and I
support both of those, my focal point right off the bat has been
and will continue to be on jobs. Those other issues are
important. They'll come up as part of the
spring session, but the reason I honed in on a special session
right off the bat on jobs was I think we need to send a clear
message on the economic issues of this state, the others will
come along shortly there after early on in the spring session
and we'll be willing to act on those as well.
My name is Matt Younkle. I'm a start-up technology
entrepreneur here in Madison. I, in the last couple of months,
have actually added about 10 people.
So I've been hiring, which is great.
One of the things that's allowed me to do that has been the angel
investor tax credits, and I know you're looking to make some
changes to the Department of Commerce, that's the part of the
department that I really like. What are you going to do with
respect to that and helping bring investment to start-up
companies? >> We're going to continue that.
Former Senator Ted Kanavas is very active in that,
and I supported him in the past when he did that.
We'd like to take that a step further and not only continue
those credits as part of the new economic development corporation
but work, as you saw the other day, SWIB, in terms of state
investment board, potentially working with our partners with
WARF and with others, as well as helping private sector venture
capital firms evolve in this state and continue to hone in.
A lot of the investment up until now has been focused largely in
California and places like Boston.
We want to make sure more of that is in the Midwest and
particularly here in the state of Wisconsin, and we can help
build a fund that partners with those other elements to make
sure businesses like yours can continue to not only start up
but grow here in the state of Wisconsin.
It's a shy group. >> We covered all the bases.
You told them everything they wanted to hear.
I went so rapid-fire through everything.
Don't forget to sing. We'll hand out hymnals
on the way out. Thanks, everybody.
[APPLAUSE]