March 2017 IBAW Business Magazine

MARCH 2017 March 13

March 17

Sales Roundtable

Monthly Meeting

The Corners of Brookfield

Are You Chasing A Parked Car?

Inside This Issue:

SEARING: THE GOVERNOR’S STATE BUDGET ACT

KEATING: SMALL BUSINESS POLICY RANKING : WHERE DOES WISCONSIN COME IN?

Business Behind the Scenes: Carmex Registration now open!

Special Report:

Audit Finds Serious Problems With DOT Management

Networking matters

At AT&T, we know that making connections is critical to success. In Wisconsin and across the nation, we link businesses with their customers and the world through our wireless network with access to the nation’s largest Wi-fi network. It’s just another way we help our customers stay connected.

AT&T is proud to support the Independent Business Association of Wisconsin.

© 2014 AT&T Intellectual Property. All rights reserved.

IBAW thanks AT&T for it’s continued sponsorship.

IBAW MEDIA LINK Lawmakers Consider How to Get DOT In Line _________________________________________________________

Executive Director Steve Kohlmann President Jim Leef ITU AbsorbTech Secretary Dan Hansen Waukesha State Bank President Elect 2016-17 Craig Coursin Stier Construction VP. State & National Programs Charles Fry Baird Treasurer Casey Malek Sikich

To watch, click here.

Video courtesy of MacIver Institute.

Directors Ann Barry Hanneman Simandl Law Group S.C John Weber Hypneumat Jeff Hoffman Boerke Co. Richard Blomquist Blomquist Benefits Lisa Mauer Rickert Industries Tom Boelkow BSI Design, Build, Furnish Robert Gross Gross Automation Scott Seroka Seroka Brand Development

IBAW Mission: To advance business prosperity through insightful programming, executive networking and member-driven public policy and advocacy.

Independent Business Association of Wisconsin

MONTHLY MEETING

Exclusive First Look!

March 17th at IBAW You’ve seen it from I-94, now hear the inside story and get a first look of the largest private construction project in Wisconsin.

The Corners of Brookfield, at I-94 and Barker Road, is a premier lifestyle center undertaken

by Brookfield Corners, LLC, an affiliate of IM Properties and Bradford Real Estate.

The Corners features...

• 400,000-square-feet of retail and restaurant space.

• 140,000-square-foot Von Maur Department Store

David Olson, General Manager

Robert Gould,

VP of U.S. Operations, IM Property Investments

• 30,000-sq. ft. Sendik’s Grocery Store • 244 luxury apartment homes • Parking for more than 1,900 cars.

The Corners opens next month.

PLUS...

10 MINUTES WITH

Rep. Dale Kooyenga Assembly District 14

LOCATION

THE WISCONSIN CLUB 900 W. WISCONSIN AVE. MILWAUKEE

7:00 AM

REGISTRATION & NETWORKING

7:30 AM

BREAKFAST & PROGRAM

9:00 AM

PROGRAM ENDS

Register at IBAW.com

Fast and Flu rious Steve Kohlmann, IBAW Executive Director

For those of you with small businesses I’m sure you understand what happens when the flu bug runs through your shop or office. During those times there are two types of employees; the ones that have the flu, and the ones that are going to get the flu. And so it is with the IBAW office. I’m just getting back to normal(?) after five days very brutal flu bug. Combine that with a shorter than usual month like February and I’m way behind in everything including getting this magazine ready for the first of the month. So rather than come up with a thought provoking column where I have to be clever and witty, I’m going to give you an update on some pretty cool things are happening here at IBAW. Our topic for our March 17 monthly meeting is going to be The Corners of Brookfield project. No doubt you seen this large retail project from I-94 and Goerke’s Corners in the Town of Brookfield. This is one of the largest private construction projects in the state of Wisconsin. We’ll be getting an exclusive first look of this project. Robert Gould of IM Properties will be coming in from Chicago to share a great story of perseverance and success that finally got this project off the ground and the exciting things coming from this project. Before the meeting we’ll be getting an update from State Representative Dale Kooyenga on what’s happening in Madison and his thoughts on a possible U.S. Senate bid.

On April 4th, we’ll be doing a Business Behind-the-Scenes tour of Carmex. The story of Carmex goes back to the 1930s when it’s founding father, Alfred Woebling, was developing his lip balm formula in the family kitchen. Now, Carmex is selling nationwide and beginning its global reach. Alfred’s grandson Paul, is the present CEO and will be or tour guide. Registration is now open and limited to 30 people. This event is only open to IBAW members.

Also in April our monthly meeting will feature Congressman Glenn Grothman. I’m sure many of you are curious as to what Washington is doing to help small business succeed and grow. Congressman Grothman has been in office for a few years now and he has a knack of speaking his mind so it will be interesting to hear his perspective. More importantly, it will give YOU the opportunity to tell him what’s on your mind.

Coming up on May 12th is our annual Sporting Clay Shoot at the Waukesha Gun Club. This is going to be our third year for this event and it promises to be our best one yet. More fun. More food. More door prizes and this year we’ve put in a special request for better weather. We are looking for sponsors for this event so get your team together and contact me directly.

Our speaker for our monthly meeting on May 19 is Scott VanderSanden, President of AT&T Wisconsin. Scott will be giving us an update on what we can expect on new technology in the next few years. Scott last spoke to us four years ago and told us of WiFi in our cars, smarter phones, drone deliveries and driverless cars. What’s ahead in the next four years? Join us and find out.

Jumping way ahead, the IBAW has become a sponsor for the Global Leadership Summit which will be hosting a two-day Business leadership event in mid August of this year. This event will feature high profile National speakers and promises to be a world class event. We’ll be bringing you more details about this event and the speakers in the upcoming months. To learn more about it now, go to MKELeaders.com.

Finally in closing, I would like to welcome several of our members who are new to the IBAW Membership Committee: Katie Ross of Xorbix Technologies, Jeanie Brown of Quality Resource Group, and Mike Poludniak of Merrill Lynch. Thank you for volunteering your time! If you would like to become involved in the IBAW somehow, please contact me. We always are thankful for your involvement!

That’s about it for right now. Thank you all for your support of the IBAW and Wisconsin business!

To The IBAW

Audit Finds Serious Problems With DOT Management The Department of Transportation’s new Secretary Dave Ross fully understands the legislature’s frustration with the department he took over in early January, he told the legislature’s Joint Legislative Audit Committee in a hearing on Tuesday.

Ross, who has been in the job less than two months, also acknowledged the department has deep-seated cultural issues that need to be corrected in order to fix many of the problems identified in a scathing Legislative Audit Bureau report on the department.

At Tuesday’s hearing, state auditors went through a litany of problems uncovered by their investigation. One major concern was massive cost overruns - on 16 major highway projects ongoing as of August 2016, the cost estimates at enumeration totaled $2.7 billion. By August, those costs had ballooned to $5.8 billion because the DOT did not adequately plan for inflation or potential cost increases, the audit found.

The auditors also cited poor management of the department’s five regions, including the DOT failing to consistently use its own performance measures to manage and improve its operations. Four of five regions reported that they didn’t even use the results to improve future project selection.

One of the auditors’ biggest concerns was the department’s shoddy record keeping practices and a lack of centralized information, especially information on project cost overruns.

“What you would expect from the department is a centrality of information so that DOT could authoritatively respond to your questions about why have costs changed,” auditor Joe Chrisman told the committee. Instead, auditors had to scour each of the DOT’s five regional offices for necessary information.

One of the recommendations the auditors made was for the DOT to centralize key information and use it to report more frequently to the legislature.

Accountability to the legislature was a concern of Senator Kathleen Vinehout (D-Alma), who questioned why the Joint Finance Committee didn’t take a more active role scrutinizing massive cost overruns and major expansions to projects that had already been enumerated.

Vinehout also said many roads in her district had deteriorated significantly over the years, a sentiment echoed throughout the state’s rural areas. This is despite state highway expenditures increasing from $739.7 million in 1996-97 to $2.1 billion in 2015-16.

The auditors also recommended a series of new rules and modifications to state statutes to correct some of the problems the audit found. However, Rep. Melissa Sargent (D-Madison) questioned whether introducing a raft of new rules would make any difference.

“The DOT already has its own rules and procedures in place, and one of the problems identified by the audit was that in many cases, the department wasn’t following them,” she contended.

The audit throws cold water on the prospect of raising taxes or fees in order to increase the DOT’s funding, long a contentious battle between Governor Walker and legislative leaders. Walker’s budget sticks by his campaign pledge not to raise the gas tax or vehicle registration fee, while legislative leaders are insisting these and other revenue increasing measures should remain on the table to fully fund all ongoing projects.

Legislative leaders have also expressed concern about the cost of bonding to fund transportation. “Wisconsin will spend roughly 20 cents on every transportation dollar on debt service for this fiscal year. It is projected to increase under this proposal,” Assembly Speaker Robin Vos (R-Burlington) said in a December statement.

While Walker's budget proposes an increase of more than $522 million from the DOT’s base funding, it holds the line on the gas tax and registration fee. The budget shifts the state’s transportation spending priorities from several southeastern megaprojects to infrastructure maintenance throughout the rest of the state.

Walker’s budget includes nearly $15.9 million in increased transportation aid to counties, more than $30 million in increased aid to municipalities, $14 million more for the Local Roads Improvement Program, and $5 million for the Local Bridge Improvement Assistance program.

In all, Walker increases aid to a variety of local transportation funds by $77 million.

Walker also wants to transfer $30 million from the petroleum inspection fund (PIF) into the transportation fund. The PIF is funded by 2 cents of the state's 32.9-cents-per-gallon gas tax.

The governor says all active major projects would stay on schedule under his plan. However, certain mega projects will be delayed. The Zoo Interchange "North Leg" would remain on hold, and the state would not enumerate the East-West I-94 expansion project. The core of the Zoo Interchange will be completed on schedule.

Walker's plan also leaves $31 million for the North-South I-94 project, although work on that will not be finished on time.

New bonding levels in the governor’s budget are $500 million over the biennium, the lowest amount since the 2001-03 budget and a 41 percent decrease from the previous budget, which borrowed $850 million for transportation projects.

The budget’s re-prioritization of funding from mega projects to safety and maintenance of existing infrastructure is an acknowledgment that the DOT lowballed project cost estimates when proposing the projects to the legislature years ago. As it turns out, the state can’t afford the actual inflated costs without massive revenue increases.

A memo from the nonpartisan Legislative Fiscal Bureau late last year found that a 28-cent-per-gallon gas tax hike would be required to fully fund all the DOT’s ongoing projects while maintaining existing infrastructure. That’s a 91 percent increase over the current gas tax.

The state unknowingly bit off more than it could chew when it embarked on its transportation spending spree in the previous decade, a fact the recent audit revealed in stark black and white. Walker’s proposal funds needed maintenance while holding back on giving DOT any more blank checks while much needed changes are undertaken at the department— a process Secretary Ross admitted could take a long time.

ABOUT THE MACIVER INSTITUTE The John K. MacIver Institute for Public Policy is a Wisconsin-based think tank that promotes free markets, individual freedom, personal responsibility and limited government.

John K. MacIver pursued the notion that ideas are the most powerful force in politics. Though he never held a government post, few Wisconsinites have had a greater impact on the public affairs of this state and the nation. John either founded or led many of the most effective business, civic, cultural and political organizations in Milwaukee and Wisconsin.

An advisor to Presidents, college interns and business titans, John MacIver believed that good government could be good politics. In John's honor, The MacIver Institute will produce a new generation of ideas to make Wisconsin great again. www.maciverinstitute.com

MESSAGE FROM THE BOARD

“Animal Spirits” Construction Looming?

Early planning Charles Fryand communication is critical.

Since joining the IBAW initially as a member in 2013, looking to expand my network of pro business free market oriented advocates with a local focus, and then as a board member in the Summer of 2014, I would have described sentiment amongst the business community during that time, particularly that of small, independent business people as largely cautious. There was no doubt that business conditions had been improving since the depths of the 2007-2009 Recession, but the economic recovery consistently “felt” precarious in its nature.

Sentiment or confidence measurements are an indicator of future hiring plans, worker availability, and capital spending, the true drivers of sustainable economic growth. A quick glance at the small business confidence index since 2000 paints a very clear picture: confidence and sentiment since 2007-2008 has been consistently weak on main street. The reasons for this have been well documented by the IBAW. For all the noise surrounding the election, there is no mistaking the air of optimism that has taken the business community, particularly the small business community by storm. I recently asked an investment banking executive what he was hearing and seeing from his perspective, and what he said was profound. For the first time in close to a decade, business leaders feel like they no longer have to play defense around the clock, and feel like they have an all clear to play offense. An associate of mine who heads up strategic development for a large local diversified manufacturer, when asked the same question reported “we have been sitting on a mountain of cash for the past five years and finally feel like its time to deploy that cash into existing or new business lines”. You need only to glance at the National Federation of Independent Business Confidence Index over the past three months for more broad based evidence of this trend.

Board Stats Name: Charles Fry Company: Cefalu/Fry Group Robert W.Baird Management Member Since: 2013 Joined Board: 2014

Deep rooted, broad optimism within the business community can be contagious, and can lead to the kind of consistent economic growth that works for all Americans. If the past six to nine months is any indication, we are well on our head to better times for all in the years ahead.

Charles Fry

The aforementioned is not an investment recommendation, and should not be relied upon as anything other than the general business opinion of the author. Robert W. Baird & Company does not endorse any of these statements.

The

Governor’s Proposed State Budget

Act An Analysis for IBAW Members

On Wednesday, February 8th, Wisconsin Governor Scott Walker unveiled his proposed $76 billion two-year biennial budget to a joint session of the State Legislature.

Leading up to the address, there had been a great deal of speculation about what the Governor’s budget would look like – especially as it pertains to areas like transportation. Given the sheer volume of what is all included in the budget, I will try to touch on some of the major areas of interest to IBAW members.

Eric Searing, Special Consultant for the IBAW

K-12 Education & Higher Ed Touting what he calls a “Reform Dividend,” made possible by his administration’s common sense reforms and prudent fiscal management the Governor announced that this budget will continue to cut taxes while making “historic investments” in K-12 education and the UW System.

Specifically, the Governor’s proposed budget would boost funding for K-12 schools by $649 million to an all-time high of $11.5 billion in total education spending. In addition, the Governor has proposed creating an “Early College Credit Program” to help students earn college credit before graduating from high school. The budget also requires the Wisconsin Economic Development Corporation to allocate $1 million to support a “Fab Lab” grants program to public schools.

As for higher education, the UW System would receive $105 million in additional funding. The budget also provides $42.5 million to UW System schools that will be appropriated based on performance. There would also be a new requirement for system students to obtain an internship or other work

experience before graduating. In-state undergraduate UW System students would also see a 5% cut in tuition in 2018 and tuition for technical college students would be frozen.

Taxes Governor Walker has long championed reducing Wisconsin’s tax burden as a central theme of his tenure in office. Once again, he continues to make good on his promise by proposing to cut the statewide property tax burden in 2018 to below what it was in 2010. His budget also eliminates the only state property tax, the forestry tax.

The budget also proposes cutting income taxes by reducing the lowest income tax bracket from 4% to 3.9% and the second-lowest bracket from 5.84% to 5.74%. The Governor also expands the size of the second-lowest bracket by 25%. This budget also creates a sales tax holiday on schools supplies and clothing for two days in August in 2017 and 2018.

The Governor’s budget also simplifies contractor sales tax reporting, caps the use of historic rehabilitation tax credits to $10 million, delays the effective date of the bad debt sales tax deduction, and limits net business loss carry-forwards for those who did not report losses in a timely fashion.

Transportation The topic of transportation funding has been a contentious one between the Governor and key lawmakers in the State Assembly. Over the last several months the Governor has said repeatedly that he had no interest in raising the gas tax or vehicle registration fees. With this proposed budget, the Governor has followed through on that promise.

The Governor also calls for a repeal of the state prevailing wage law for highway projects and prohibits any unit of government from mandating project labor agreements for bidding on public works projects. The budget also allocates $31 million for work on Interstate 94 from the state line through Kenosha and Racine counties.

Welfare Reform The vast majority of funding for public assistance and welfare programs comes from the federal government. As such, states seeking to make changes to those programs are often required to seek permission or waivers from the federal government to do so. Here in Wisconsin, Governor Walker has reached out to the Trump Administration and Congress to gain approval for drug testing individuals seeking public assistance. The Governor has stated that those who fail the test will be provided with the option of treatment to get them healthy and back into the workforce.

The Governor is also proposing on a pilot basis, a requirement that able-bodied adults with school-age children work either 80 hours a month or participate in an employment and training program.

Other key items included in the budget are: • The REINS Act • The creation of a “Occupational License Review Council” charged with recommending what occupational licenses are unnecessary and should be eliminated in 2018 • $5 million in Wisconsin Fast Forward training grants for technical college workforce training programs in high-demand industries • Consolidation of various professional boards at the Department of Safety and Professional Services • Eliminating the Labor and Industry Review Commission (LIRC) and replacing their review of cases with a review by division administrators

The Budget Process Just to provide some background, the development of the Governor’s proposed biennial budget is an almost year long process. Agencies submit their requests to the Department of Administration (DOA) in the fall of even numbered years. These requests are then compiled by the State Budget Office and are later reviewed by the Governor for possible inclusion in his final budget proposal.

Now that the Governor’s budget has been formally introduced, members of the legislative Joint Committee on Finance (JFC) will review the proposed budget and agency requests. Over the next few months, the JFC will hold budget hearings around the state of Wisconsin.

Eventually the Committee will deliberate on making changes to the Governor’s proposed budget, which is almost a certainty in the process. From there the budget will then move on to both houses of the Legislature. If both houses approve the budget will then be sent to Governor Walker to either be signed, vetoed or in some portions of the bill, line item vetoed. For the purposes of meeting the state’s budgetary cycle, the budget should be signed and effective by July 1, 2017.

If you are interested in learning more about the Governor’s full budget, please go to www.walker.wi.gov/ wiworking.

UPCOMING EVENTS Sales Roundtable: Are You Chasing A Parked Car? Monday, March 13th 2017 | Time: 7:30 am - 9:00 am | Location: CT Access, 740 Pilgrim Parkway, Elm Grove

Are you chasing a parked car?

When to persist and when to give up.

There are two kinds of salespeople – those who are eternally optimistic, willing to put in the time to chase a lead for months, or even years in hopes of a big payday. And then there are those who kill off seemingly dead leads after repeated rejection, believing their time is better spent hunting new opportunities.

Presenter: Scott Seroka, Seroka Brand Development

If you find yourself stuck somewhere in the middle with some of your leads, come to the IBAW’s next sales roundtable where we will analyze numerous options, and dive deep into the best way to answer the question, How long do I want to chase a parked car?

Registration is required. Click here.

Business Behind the Scenes: Carmex Tuesday, April 4 2017 | Time: 1:00 pm - 3:00 pm | Location: 9750 S. Franklin Drive, Franklin, WI. Alfred Woelbing, like many people, suffered from cold sores. Unlike many people, he had an entrepreneurial spirit and a knack for kitchen chemistry.

Alfred decided to solve his painful condition for himself, and concocted a remedy for his cold sores. In 1937, he began making Carmex® by hand, pouring the medicated lip balm into the familiar jars in his kitchen.

His sales method: visiting pharmacies one by one. If they weren’t interested, he gave them a dozen jars for free—along with a postcard to reorder. In no time, the pharmacies sold the free samples and the reorder forms started coming in.

Today, Alfred’s grandsons, Paul and Eric, run Carmex selling the product world wide.

We’ll tour both the Carmex laboratory and production facility. Join us for an afternoon for a great Wisconsin success story, inspiration and true entrepreneurship.

Cost: Free. Open only to IBAW members

Register now - Tour limited to 30 people!

: S E L A S

2nd Monday of the Month SALES ROUNDTABLE 7:30 am - 9:00 am Free & open to IBAW members only Register at IBAW.com

Sales can be a tough road of ups, downs, potholes and a few bumps.

But it can also be fast paced, exhilarating and rewarding.

If you’re in sales, you know there are things only other sales people understand; the thrill of scoring the big account, the uncertainty of “let me think about that.”, the frustration of phone calls or emails that don’t get returned. IBAW’s Sales Roundtable is a support and knowledge resource for sales professionals, business owners, marketing and branding experts who are charged with driving sales.

Join us to discuss the strategy, tactics, inspiration, and motivation to increase sales. It’s a FREE benefit of your membership!

Who should attend: • Sales professionals of any level.

• Business owners • Sales Managers • Marketing & P.R. Professionals

“For many years I ran sales meetings for as few as 3 and as many as 22 sales rep’s now I can go as a participant once a month to IBAW’s Sales Roundtable.

BONUS! Join the IBAW Sales Roundtable and get a compact disc with the BEST in Sales Survival Music. Play it to pump you up before that big meeting or to console you if you hit a sales slump. Guaranteed to make life better.

It’s a focused meeting and everyone wants the same thing – to be more effective at selling.”

- Jerry Wick, CEO, Custom Data Too Mail

3rd Annual...

Sporting Clay Shoot

Get Your Team Together!

Location: Waukehsa Gun Club * More Fun! * More Prizes! * More Food!

A Great Place To Network!

MAY 12

11:30 am - 4:00 pm

The Issues Impacting Wisconsin Business One of the hallmarks of the IBAW is to keep business owners informed on important topics coming out of Madison in Washington D.C..

The IBAW has released topics we feel are important to you and give you the challenges and opportunities for each.

Many of these issues can be complex. It’s IBAW’s job to distill down issues and present them in a manner that’s easy to understand and quick to read.

Read these White Paper Issues at our website: IBAW.com.

• REGULATIONS • TAXES • WORKFORCE • ENERGY • HEALTH CARE

Ranking the States for Small Business Policy Raymond J. Keating, SBC Council, Washington D.C. The “Small Business Policy Index 2017: Ranking the States on Policy Measures and Costs Impacting Entrepreneurship and Small Business Growth” ranks the 50 states according to 55 different policy measures, including a wide array of tax, regulatory and government spending measurements.

The most entrepreneur-friendly states under the “Small Business Policy Index 2017” are: 1) Nevada, 2) Texas, 3) South Dakota, 4) Wyoming, 5) Florida, 6) Washington, 7) Indiana, 8) Arizona, 9) Alabama, 10) Ohio In contrast, the policy environments that rank at the bottom include: 40) Rhode Island, 41) Oregon, 42) Iowa, 43) Connecticut, 44) Maine, 45) Hawaii, 46) Vermont, 47) Minnesota, 48) New York, 49) New Jersey, 50) California.

The “Small Business Policy Index 2017” can be read or downloaded here, with an interactive map that includes highlights and individual state summaries here.

Raymond J. Keating, SBE Council’s chief economist and author of the study, noted, “In the end, the greater the governmental burdens – via taxes, regulations, spending, debt, and failures to adequately execute the essential duties of government – the greater the negatives for economic risk taking, small businesses, and the state’s competitiveness and attractiveness.”

In the report, Keating explains why each measure is included, such as the economics regarding the effects on small business and the economy, along with an extensive section reviewing various studies relevant to the items included in the Index. Five new measurements were added within the 2017 Index including: annual fees on LLCs, health care open access, paid leave mandates and civil asset forfeiture.

Keating also observed, “Economic growth and population growth are faster in the top half of the states ranked on the Index compared to the bottom half. In terms of people moving among the states, those ranking in the bottom half on the Index lose significant population to the states ranked in the top half.” Consider: • Real annual economic growth from 2011 to 2014 among the top 25 states ranked on the 2016 “Small Business Policy Index” averaged 1.68 percent, which was 29.2 percent faster than the 1.30 percent average rate for the bottom 25 states.

• Also, the top 25 states averaged state population growth of 4.9 percent from 2010 to 2015 versus only 2.5 percent for the bottom 25 states. That is, the average growth rate was basically double among the top 25 states versus the bottom 25 states.

And in terms of total population numbers, the top 25 states saw an increase in state populations of 8.44 million from 2010 to 2015 versus a gain of 4.15 million in the bottom 25 states. That is, again, the growth among the top 25 states was more than double (103.3 percent higher) than in the bottom 25 states.

• Perhaps most telling is net domestic or internal migration, or the movement of people between the states (that is, excluding births, deaths and international migration). It captures people voting with their feet. From 2010 to 2015, the top 25 states on the “Small Business Policy Index” netted a 2.00 million increase in population at the expense of the bottom 25 states, which lost 2.03 million (with the District of Columbia’s gain explaining the difference). It also is worth noting that among the top 10 states on this year’s Index, 8 gained population from other states, while among the bottom 10 states, 9 lost population to other states.

SBE Council President and CEO Karen Kerrigan said: “As we have been saying over the course of our organization’s nearly 25 year history, policy matters when it comes to starting up, operating and investing in a small business. That is the case at all levels of government – federal, state and local. Getting policy right makes a big difference in terms of boosting a state’s economy, job creation and competitiveness. Many governors and state legislatures have taken this reality very seriously, and have implemented policies that reduce the burden of taxes and regulations on small business. These policy doers have reaped the rewards. The best states understand that doing nothing can lead to an erosion in their competitiveness, and have also acted accordingly.”

Small Business Policy Index 2017 Rankings Rank State SBPI 1 Nevada 44.789 2 Texas 46.014 3 South Dakota 48.445 4 Wyoming 51.862 5 Florida 54.751 6 Washington 64.175 7 Indiana 66.852 8 Arizona 67.263 9 Alabama 10 Ohio 11 Utah 12 Michigan 13 Colorado

67.799 69.250 69.269 69.852 72.053

14 North Carolina 15 Mississippi 16 South Carolina 17 Virginia 18 Tennessee

73.715 74.597 75.112 76.550 77.804

19 Oklahoma 20 Missouri 21 North Dakota 22 Louisiana 23 Georgia

78.956 79.128 79.299 79.525 80.229

24 New Mexico 80.597 25 Kansas 81.067 26 Alaska 84.313 27 Idaho 84.566 28 Wisconsin 87.720

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29 Illinois 88.134 30 West Virginia 88.674 31 Pennsylvania 89.552 32 Montana 89.771 33 New Hampshire 90.069 34 Delaware 97.906 35 Nebraska 98.238 36 Kentucky 98.264 37 Massachusetts 99.405 38 Arkansas 100.886 39 Maryland 101.859 40 Rhode Island 102.332 41 Oregon 107.593 42 Iowa 107.933 43 Connecticut 113.828 44 Maine 115.285 45 Hawaii 117.008 46 Vermont 117.226 47 Minnesota 118.602 48 New York 118.735 49 New Jersey 127.892 50 California 138.376

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The Hidden Cost of Having a Noisy Culture Scott Seroka, Seroka Brand Development All of us are faced with judgment calls every day – hundreds of them, if not thousands.

Most are insignificant, such as where to go to lunch or whether or not to wear a tie to a meeting. However, there are other judgment calls of great significance your employees make every day that could make or break a customer relationship, strengthen or damage the reputation of your brand, or ones that could profoundly impact your productivity and output.

According to an article in Harvard Business Review, Noise: How to Overcome the High, Hidden Cost of Inconsistent Decision Making, one global firm measured noise in the billions of dollars due to large gaps and variances in judgment calls made by people in identical roles or functions. Noise is most prevalent in any industry where trained professionals are placed in positions to make judgment calls, such as appraisers, credit-rating agencies, financial planners, accountants, underwriters of loans and insurance, service technicians and physicians in emergency rooms.

Examples of Noise Assume for a moment that Marriott International contracted with a manufacturer of large, industrial dehumidification units to install them into four of its latest developments. Marriott would have a right to expect that all installations would be completed in near identical fashion, to exacting specifications. In other words, none of the installers would take any shortcuts or do anything outside of spec in the process because s/he thought s/he had a better way of doing the install. Or, taking an example from the financial industry, if an identical loan application was submitted to two different underwriters at the same lender, management would have a right to expect that both underwriters would arrive at a similar outcome. Whenever there is a variance to an outcome, there is noise, and not only is there always a dollar amount that can be tied to it, any exposure to, or evidence of noise will have an impact on a brand’s performance and credibility.

When an organization lacks a strong brand of purpose, values and culture, judgment calls are perilously driven by mood, temperament, prejudices, experiences and quite literally, whether or not someone commenced their day with a halfway decent cup of coffee.

How to reduce Noise in your organization The first thing you’ll need to establish is a benchmark (or reference point) of how management and employees should make decisions along the analysis journey, and provide supporting explanations for each. (This will likely require an enhancement and/or modification to your training programs.) Of course, this can only be done if your brand is well-defined and supported by distinct values. And, the reason is because noise can only be kept to a minimum when everyone throughout the organization is trained to think, act and believe in the same way, and subscribe to the same philosophies of thought at each stage of the decision-making process. This is what is referred to as “culture.”

An ideal example can be taken from the vehicle rental industry when Avis boasted the tagline, We Try Harder. In this case, assume for another moment that you just landed at the airport and briskly walked to the Avis counter with your rental confirmation number in hand. When you speak with the Avis rep, you are very disappointed to learn, along with other customers, that Avis ran out of cars. Now, based on their tagline We try harder, which happens to be staring at you from the counter and the wall behind it, you would expect that Avis reps would have been directed to offer identical and equitable solutions to all affected customers - arrange for an Uber to take customers to their destinations while searches are made for vehicles in the network to be delivered to customers’ hotels, all free of charge.

In a “noisy” environment, reps would not be given such guidance and each would treat the crisis differently, based on their individual judgment calls. One rep may simply decide to apologize to all customers, issue each a refund and refer them to other rental agencies at the airport. Another may also apologize and tell customers that “all he can do” is take their number and call them when more cars arrive. And yet another rep, who is a senior manager, exercises her authority to have Avis shuttles take affected customers to their destinations and have cars delivered to each as they arrive. In other words, in a noisy environment, the way the customer is treated is based on who they happen to deal with – not on how Avis trained its employees to handle the crisis. In the first two scenarios, Avis would suffer a major blow to its brand, likely losing customers forever. In the third, Avis would have a greater chance of retaining customers who are appreciative of the rep’s efforts, understanding that sometimes sh*t really does happen.

Question: How much noise exists in your organization? Consider that the noisier it is, the more expensive it will be to your bottom line, reputation and credibility.

Scott Seroka is one of 29 Certified Brand Strategists in the U.S., and is a Principal of Seroka Brand Development and Strategic Communications.

More information at MKELeaders.com

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2017 Membership Committee welcomes Jeanie Brown, Katie Ross and Mike Poludniak as new committee members!

Craig Coursin Stier Construction

Scott Seroka Seroka Branding

Charles Fry Robert W. Baird

Mary Stark Waddell & Reed

Dan Hansen Waukesha State Bank

Legislative Fix Moving Ahead for Wisconsin’s New Manufacturing & Agricultural Credit Jim Brandenburg, CPA, MST - Sikich LLP

In IBAW meetings and publications in recent years we have introduced you to Wisconsin’s new tax incentive - the Wisconsin Manufacturing and Agriculture Credit (referred to as the “MAC”). The MAC came about in 2011 to provide an incentive for Wisconsin manufacturers and agricultural companies to remain and grow here, and also perhaps to have out-of-state companies move here. It was scheduled to begin in 2013, and when fully phased-in by 2016 it would essentially exempt any Wisconsin manufacturing and agricultural income from Wisconsin income tax. The MAC was championed by Representative Dale Kooyenga and Senator Glenn Grothman in the legislature.

Magazine Content Needed Consider Submitting an Article!

The MAC, however, had some problems for individual taxpayers when it was drafted and this glitch was recently identified. Here is the issue in a nutshell: the MAC would reduce a taxpayer’s Wisconsin individual income tax, but then would trigger a Wisconsin minimum tax for nearly the same amount. Thus, there may be little, if any, net savings for the MAC in 2013 (a “MAC Attack?”). The legislature is trying to remedy this situation now so that taxpayers can realize the proper tax savings with the MAC on their 2013 Wisconsin individual tax returns.

The IBAW magazine is in need of content, we rely on our members and sponsors to supply us informative articles. The digital magazine is sent out to over 650 contacts statewide and the magazine is parked on the web where, on average, it gets over 1100 views.

Legislative Update: It seems that all key legislative leaders are now on board to correct this issue. It was approved by the legislature’s Joint Finance Committee last week. The Senate and Assembly will be in session in March and voting on final passage for several bills, one of which is this tax bill with the MAC correction. It looks like the legislative timetable will have the bill passed near the middle of the March, before going to the Governor.

Thus, a best guess now is that the bill would be enacted into law somewhere in the latter half of March, 2014.

MAC Attack Options: For any of our individual taxpayers taking advantage of the MAC, this may present some filings logistics. Here are the possibilities:

1. Best case scenario - in some cases the taxpayer’s share of the MAC for 2013 will be used and not result in a Wisconsin Minimum Tax. A taxpayer in this situation could go ahead and claim the MAC and file their 2013 Wisconsin individual return. There would be no need to wait for the legislation to pass.

Consider writing an article on a timely business related topic to your particular field of business. This is an outstanding opportunity for you and your company to gain exposure and increase your brand awareness to a statewide audience. There is no cost to submitting an article.

2. Next, a taxpayer has generated a MAC for 2013, but it will trigger a Wisconsin Minimum Tax. The taxpayer in this case could wait until the law is changed (and then wait a little for the WDR to update its computer processing systems) and then file their Wisconsin tax return and claim the MAC, and not incur the Wisconsin Minimum Tax. This could present a tight timeline for the April 15 deadline, and you may need to file for an extension.

3. Similar case as #2, but this taxpayer could file their Wisconsin individual return with the MAC, but also incur and pay a Wisconsin Minimum Tax for 2013. Then, once the corrective law is enacted go back and file an amended 2013 Wisconsin tax return to obtain the proper tax benefit of the MAC. You would not need extend, but you would need to amend.

We’ll keep you posted as this legislation moves forward.

If you have any questions, please contact Jim Brandenburg or Brian Kelley at Sikich, LLP in Brookfield (262)754-9400.

Contact Steve Kohlmann for details.

Articles submitted by our members & sponsors.

Welcome New IBAW Members!

Meeting Recaps 2014 Wisconsin Manufacturing Knowledge Summit

Power Test

On June 20, 2014 the IBAW partnered with the Tool, Die & Machining Association of Wisconsin (TDMAW) to offer Wisconsin manufacturers and their suppliers a unique look at trends within the industry and to also report on some of the challenges the industry faces in the next 5 years.

Power Test, Inc. is an industry leader in the design, manufacture and implementation of dynamometers and control systems.

Special thanks to the event sponsor, First Business Bank for their efforts in helping organize this event.

For more than 37 years, Power Test has provided specialized test equipment to manufacturers, rebuilding facilities and distributors globally. Our products can be found in use at these facilities in nearly 100 countries on six continents.

Chris Halaska

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Our headquarters and manufacturing operations are located in Sussex, WI with sales representatives worldwide. Our unparalleled customer service is well known throughout the industry.

Power Test employs a dedicated staff of talented machinists, fabricators, electronic technicians, assemblers, designers, engineers, software developers, and administrative and customer service personnel.

Our exceptional product life and excellent customer service is well known throughout the industry and has made us one of the industryleading dynamometer manufacturers. Our dedication to the customer and to the advances in powertrain component testing keep us there.

Power Test N60 W22700 Silver Spring Drive Sussex, WI 53089 Phone: 262-252-4301

4 Advanced Waste Services Advanced Waste Services is an environmental services company that provides wastewater recycling and other waste and risk elimination services to manufacturers in all industries. Each day, AWS helps hundreds of businesses, both large and small, meet their community and environmental obligations. Annually, we collect, treat and recycle more than 50 million gallons of contaminated wastewater into clean, reusable water and other valuable resources like fuel, steam and electricity.

AWS is constantly helping our clients manage, reinvent and improve their sustainability successes. For example, we recently partnered with Forest County Advanced Waste Services Potawatomi Community to help Wisconsin food and beverage manufacturers convert 1126 South 76th Street food waste into clean, green renewable energy.

Suite N408B

West Allis, WI 53214 Founded in 1993, AWS employs 55 people in the Milwaukee area and a total of 150

people companywide in 5 states.

414-847-7100

Photo Key 1: A full house in the main ballroom of the Wisconsin Club as IBAW & TDMAW members prepare to hear about the state of manufacturing and the challenges the industry faces in the workforce.

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2: David Vetta of First Business Bank delivers opening remarks and highlights the importance of a strong relationship between banking and manufacturing working together for success.

3: New IBAW President, John Weber of Hypneumat addresses the change in IBAW Bylaws and calls for voting in new board officers.

4: Kent Lorenz of Acieta gives the main presentation on “Manufacturing Matters” pointing out the trends on manufacturing now and what to expect in the future.

5: Outgoing IBAW President, Steve Van Lieshout receives his award for his efforts as 2013 - 2014.

6 Photos courtesy of Tim Townsend.

6: IBAW Executive Director, Steve Kohlmann (Left) presents David Drumel with an award for his service on the IBAW board.

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Join us. “...the sales round table was very informative, Judson will be renewing our membership in the IBAW. Thank you and I look forward to more roundtables!”

Dominic Misasi, Judson and Associates s.c.

“ I almost always come away from an IBAW meeting with useable material that helps me with my business. Many times, a speaker will give me something that applies to ITU AbsorbTech. Other times, it is a conversation over breakfast that gives me value.”

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