DARK STORES
AMERICA'S DAIRYLAND
CEO SURVEY
SUPREME COURT
WMC Fights Tax Hikes
Milk's Economic Impact
WI Business Leaders Speak
What's at Stake?
WISCONSIN
Winter 2018 Issue 27
JAY SMITH Incoming WMC Chairman Shares Goals on Statesmanship
Featured Stor y:
What Makes Wisconsin? wisconsinbusinessvoice.org
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In This Issue...
WISCONSIN
Winter 2018 Issue 27
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What Makes Wisconsin?
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F RO M T H E P R E S I D E N T Wisconsin's Second Biggest Economic Challenge N C O M I N G C H A I R : JAY S M I T H 1 2 INew WMC Chairman Calls for Statesmanship
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OUTGOING CHAIR: BOB KAMPHUIS PRIDE Sums Up Kamphuis Tenure X P O L I CY 1 8 TA Bill Would Raise Business Property Taxes STORY: W H AT M A K E S W I S C O N S I N ? 2 0 FEATURED An In-Depth Analysis of the Industries that Make Wisconsin’s Economy
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M E R I CA ' S DA I RY L A N D 2 7 AWisconsin's Impactful Ingredient M C F O U N DAT I O N 3 0 WA Special Thanks to Our 2017 Sponsors UDGE MICHAEL SCRENOCK 3 2 JRule of Law Should Drive Supreme Court E D E M O C RAT S : O U R E C O N O M I C AG E N DA 3 4 STAT Rep. Gordon Hintz (D-Oshkosh)
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STAT E R E P U B L I CA N S : O U R E C O N O M I C AG E N DA Sen. Scott Fitzgerald (R-Juneau) M C E C O N O M I C S U RV E Y R E S U LT S 4 0 WCEOs Concerned About Workforce Shortage
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F RO M T H E E D I TO R
We Can Do Better
WISCONSIN
President/Publisher Kurt R. Bauer
By Nick Novak WMC Director of Communications and Marketing
Managing Editor Nick Novak
Art Direction/Production Kyle Pankow
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t was one year ago in this exact column that I was introduced as the new face at Wisconsin Manufacturers & Commerce (WMC)—and the new managing editor of Wisconsin Business Voice. In the last year we have updated the look and feel of the magazine, and we even added a new special feature, Wisconsin Safety Voice (see the insert on page 13). As I write this column, it has been just over 365 days since I was hired, and it was one heck of a year. In case you missed it in 2017, WMC hosted nearly 1,000 business leaders at our annual Business Day in Madison program and our first ever Policy Day was held in August with a couple hundred attendees. Wisconsin Safety Council held countless trainings around the state in addition to its annual conference with 1,500 people. WMC Foundation hosted multiple couldn’t-miss events, including the State of Wisconsin Business & Industry Luncheon where Oshkosh Corporation’s Joint Light Tactical Vehicle was crowned the Coolest Thing Made in Wisconsin. Hundreds of students participated in two Wisconsin Business World summer programs. Plus, even more Business World “mini” programs took place around the state. And that is just to mention a couple of our events! WMC’s government relations team successfully defended policies that have improved Wisconsin’s business climate and helped pass additional tax cuts and regulatory reforms.
Contributing Writers Kurt R. Bauer, Nick Novak, Scott Manley, Chris Reader, Lucas Vebber, Cory Fish, Jack Orton, Louis Gentine, Jim Ostrom, Jim Pugh, Kari Hofer, Michael Screnock, Gordon Hintz, Scott Fitzgerald, Russ Cain
Advertising Sales Nick Novak, nnovak@wmc.org
WMC helped eliminate the decades-old mining moratorium, advocated to bring Foxconn to Wisconsin, pushed through the REINS Act that gives more regulatory oversight of Madison bureaucrats and encouraged Gov. Scott Walker to launch a paid marketing campaign to attract talented workers to our great state. This is only a small part of what WMC has accomplished in the last year on behalf of you, our members. But—trust me— we can do better. We are always looking for new and innovative ways to better serve our members. Since 1911, WMC has constantly been improving, and we are going to make 2018 the best year yet. We need your help, though. Get more involved in our committees. Attend and sponsor our events. Help us recruit new members so our voice will ring even louder. The more involved you are as a member, the more we can accomplish together.n
Wisconsin Business Voice is published quarterly by Wisconsin Manufacturers & Commerce. WMC is Wisconsin’s chamber of commerce, manufacturers’ association, and safety council representing businesses of all sizes and from every sector of the economy. WMC 501 E. Washington Avenue Madison, WI 53703 tel.: 608.258.3400 Follow us:
WisconsinMC Wisconsin Manufacturers and Commerce WMC501
Looking to advertise in WI Business Voice? Contact Nick at nnovak@wmc.org. @WisconsinMC
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Winter 2018
wisconsinbusinessvoice.org | From the Editor
PRIORITIZING PEOPLE At First Business, we support people with financial needs, not the financial needs of people. So when I heard that a long term client who built a successful business retired in style in Florida, I was both thrilled to hear how happy he was – and grateful to have been able to help him along the way. And when I heard he actually retired early? Well, that made my day. JERRY SMITH Co-Founder & Chairman, First Business
WE ARE BANKING. FOCUSED. firstbusiness.com/learnmore
Member FDIC
Governor Walker at the Future Wisconsin Summit
Wisconsin’s Second Biggest Economic Challenge By Kurt R. Bauer “Workforce, workforce, workforce.”
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hat is how Gov. Scott Walker began his remarks at the Future Wisconsin Summit late last year in Madison (see page 37). He said that with the state unemployment rate at a near record low and with more Wisconsinites working than at any other time in state history, his attention has shifted away from economic development toward workforce development because, as he put it, “that’s what I hear from employers across the state, big and small alike.” WMC hears it, too. In fact, our most recent economic survey (see page 40) shows that 80 percent of Wisconsin employers are having trouble finding
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workers, up from 77 percent six months ago and 53 percent four years ago. Walker made news during his Future Wisconsin remarks by announcing plans to spend nearly $7 million on a
The only solution for an acute shortage of working age people is to attract more working age people. talent attraction marketing campaign targeting “Midwest Millennials” and alumni from Wisconsin public and private universities who currently live out-of-state. The very next day, WMC hosted a regularly scheduled bimonthly economic roundtable, which includes economists from the UW System, state
wisconsinbusinessvoice.org | From the President
government and the Federal Reserve Bank of Chicago. During the meeting I asked each participant to share what they thought were Wisconsin’s two biggest economic challenges. Given what I read in WMC’s economic survey and hear when I travel the state, I assumed the top concern would be workforce…and I was right. As I wrote in my October column, workforce is Wisconsin’s mega issue. But I was curious what other issues a bunch of economists, many of whom analyze Wisconsin’s economy for a living, would rate as our state’s second biggest economic challenge. There was no consensus. But, perhaps not surprisingly, two were related to workforce. The first is a misdiagnosis of the workforce shortage as a skills gap rather than a pure population or body gap,
Wisconsin’s opioid and methamphetamine epidemic shows that drugs are not just an urban problem. which means many have prescribed the wrong cure. If you have people who are willing to work, are drug free and have the ability to learn new skills, then you can bridge a skills gap with education and training. But the only solution for an acute shortage of working age people is to attract more working age people via migration and immigration, which is why I was so pleased by Walker’s call for a marketing campaign. The other workforce-related problem mentioned is the plight of rural Wisconsin. More than two decades of below replacement-level birthrates is hurting nearly every part of the state, but it is hitting rural areas particularly hard. K-12 enrollments are falling and school districts are having funding issues as well as trouble finding bus drivers, let alone teachers. Hospitals and clinics are also having difficulty finding health care professionals at a time the population is aging and in need of more care. Some communities have lost critical services like banking and even grocery stores. And Wisconsin’s opioid and methamphetamine epidemic shows that
drugs are not just an urban problem. Somewhat related to the above is infrastructure, specifically the lack of major highway arteries connecting certain parts of the state, particularly in the north. Also included in this category is the lack of broadband access in rural Wisconsin. The group largely agreed that Wisconsin can’t achieve its full economic potential without a strong Milwaukee. And while Milwaukee has a lot going for it, including the gleaming new Northwestern Mutual Life tower and the new Bucks Arena, the state’s largest city is also the most segregated in the nation, has underperforming public schools, a very high unemployment rate for working age African American males, high incarceration rates for African Americans, above average illegitimacy rates, pockets of generational poverty and per capita crime that rivals Chicago. Parochialism also came up in the discussion, namely that for every problem Wisconsin faces, there are multiple groups working to solve it and sadly they are not communicating with
each other, let alone cooperating or collaborating. Wisconsin also has the 10th most units of local government, according to the U.S. Census Bureau, including more police departments than California, which has 39.5 million people versus Wisconsin’s 5.7 million. A 2002 study showed that Dane County alone has 60 governmental entities and 25 law enforcement agencies. There was some disagreement about the last issue mentioned; business startups. National surveys and rankings consistently list Wisconsin at or near the bottom in business startup activity. But the problem may not be as bad as reported. Since 2010, Wisconsin has gained businesses. In fact, Wisconsin grew new businesses faster than Minnesota between 2014 and 2016. Further, during that same period, most Wisconsin counties boarding Illinois, Iowa and Minnesota saw more startup growth than their out-of-state next door neighbor. n Follow Kurt on Twitter @Kurt_R_Bauer
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From the President | wisconsinbusinessvoice.org
Winter 2018
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Reform Agenda at Stake in Supreme Court Election By Scott Manley WMC Senior Vice President of Government Relations
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ith the announcement that conservative Supreme Court Justice Michael Gableman is not seeking reelection this spring, the race to fill his vacant seat is in full swing. Court observers rightfully view the upcoming election to fill his seat as pivotal to the philosophical balance of the Court. Three candidates have already emerged, and the differences in their approach to the role of the judiciary could not be starker. Take for example Madison attorney Tim Burns. It’s very unusual for a Supreme Court candidate to publicly criticize a law enacted by the legislature, yet Mr. Burns is doing just that. He has been vocally critical of Act 10, Gov. Scott Walker’s signature collective bargaining reforms for government workers, and Wisconsin’s voter ID law. Judicial candidates generally refrain from these types of statements because it’s a violation of the Wisconsin Judicial Code of Ethics to commit a position on an issue that is likely to come before the Court. Doing so demonstrates a bias that clouds the judge’s impartiality. That Mr. Burns would make these comments, and send such blatant virtue signals to far-left voters by describing himself as a “progressive” and “the most nakedly liberal candidate to run for the court in years” is indicative of his activist approach to the judiciary. He appears to view a seat on the
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Supreme Court as a vehicle to overturn policy reforms with which he disagrees. One of his two primary opponents, Milwaukee County Judge Rebecca Dallet, has avoided taking public positions on issues, and is attempting to portray herself as more moderate than the unabashedly liberal Tim Burns. However, she was a featured speaker at the Democratic Party of Wisconsin’s state convention last summer—a good indication of her partisan affiliation. In addition, the list of endorsements on Judge Dallet’s web site reads like a “who’s who” of liberal politicians and activists. Perhaps tellingly, she is endorsed by Judges Maryann Sumi and Juan Colas—the Dane County Judges who overturned Gov. Walker’s Act 10 collective bargaining reforms. She is also endorsed by former Dane County Judge William Foust, who overturned Wisconsin’s Right to Work law just before retiring in 2016. As candidates for the state’s highest court, Tim Burns and Rebecca Dallet are either openly hostile to the Walker-Era reforms, or are endorsed by judges who have actively attempted to undo them through acts of rank judicial activism. The stakes couldn’t be higher. We find ourselves in a situation where the numerous pro-growth reforms enacted during the last seven years are at risk of being overturned because of the election of activist judges. Wisconsin voters must decide between judges who wish to assume the role of a lawmaker and legislate from the
wisconsinbusinessvoice.org | Government Relations
bench, or judges who understand the limited role of the judiciary to interpret the law as written by the Legislature. Sauk County Judge Michael Screnock, the third candidate running for the open seat, provides a stark philosophical difference from Mr. Burns and Judge Dallet. Judge Screnock believes in the rule of law, and has said “When a court is asked to interpret a law, its role is to declare what the law is, based on what the legislative and executive branches have done, and not what the court thinks it should be.” The Wisconsin Supreme Court would be well-served by judge Screnock’s refreshing approach to judicial philosophy. We need more judges like him who respect the different roles of the three branches of government, and who understand that lawmaking should be done by the legislative branch—not the judiciary. Justice Gableman has served the Supreme Court with honor and distinction, and he definitely will be missed. He authored many important decisions upholding the rule of law and curtailing abuses of power by government. It will be difficult to fill the void on the Court created by the departure of Justice Gableman. Voters will have a clear choice between two candidate who are aligned with liberal activists bent on overturning Gov. Walker’s reforms, and Judge Screnock, who has promised to respect the rule of law as enacted by the legislature. n Follow Scott on Twitter @ManleyWMC
BUSINESS DAY IN MADISON FEBRUARY 28, 2018 Monona Terrace Community & Convention Center, Madison, WI Welcome Reception: February 27, 2018, The Madison Club Register today for Business Day in Madison! This event brings business leaders from all over the state together to meet with policymakers and discuss important issues facing the business community and our state. The program features lunch keynote GREG GUTFELD, a libertarian political satirist, humorist, magazine editor and blogger. Greg is perhaps best known as the co-host of the Fox News Channel program “The Five” and “The Greg Gutfeld Show” on Sunday evenings. He covers a variety of topics, including news, entertainment, and sports with special guests. Other featured speakers include SHARYL ATTKISSON, five-time Emmy Awardwinning investigative journalist; and GUY BENSON, political editor of Townhall. com, Fox News contributor and author; and GOVERNOR SCOTT WALKER (invited).
Register: www.businessdayinmadison.com Early Bird Pricing (through January 26, 2018): $145 per person; $1,100 table of 8 After January 26, 2018: $175 per person; $1,300 table of 8
SHARYL ATTKISSON
Five-time Emmy Award-winning Investigative Journalist
GUY BENSON
Political Editor of Townhall.com, Fox News Contributor, and Author
GREG GUTFELD
Co-host of Fox News “The Five” and New York Times Bestselling Author
For sponsorship opportunities, contact Brittany Rockwell wisconsinbusinessvoice.org at WMC, brockwell@wmc.org or 608.661.6917.
GOVERNOR SCOTT WALKER (Invited)
Winter 2018
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W M C B OA R D O F D I R E C TO R S
WMC Officers CHAIR Robert Kamphuis Mayville Engineering Company, Inc. VICE CHAIR Jay Smith Teel Plastics, Inc. SECRETARY Tod Linstroth Michael Best & Friedrich LLP TREASURER Gina Peter Wells Fargo Bank
WMC Board of Directors
James Leef ITU AbsorbTech, Inc.
Nicholas Pinchuk* Snap-on Inc.
WMC Past Chairs
Nate Cunniff BMO Harris Bank
Allen Leverett* WEC Energy Group
Aaron Powell* Flexion, Inc.
Thomas Boldt The Boldt Company
Brad Denoyer, CPA* Baker Tilly Virchow Krause, LLP
Stephen Loehr* Kwik Trip, Inc.
Joseph Pregont Prent Corporation
John Dykema Campbell Wrapper Corporation
Scott Mayer QPS Employment Group
Michael Salsieder Kolbe & Kolbe Millwork Co., Inc.
Rockne Flowers The Edwin E. and Janet L. Bryant Foundation, Inc.
Peter Engel* Johnson Financial Group
James McIntyre The Greenheck Group
Eric Sauey* Seats, Inc.
Philip Flynn* Associated Banc-Corp
J.R. Menard Menard, Inc.
Karl Schmidt Belmark, Inc.
James Friedman Quarles & Brady LLP
Robert Moses* Prairie du Chien Area Chamber of Commerce
Rajan Sheth Mead & Hunt, Inc.
Philip Fritsche Beaver Dam Area Chamber of Commerce
Daryl Adel Kerry Sidney Bliss Bliss Communications, Inc. Damond Boatwright* SSM Health - Wisconsin Steven Booth Robert W. Baird & Co., Inc. David Bretting* C. G. Bretting Manufacturing Co., Inc.
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Thomas Burke* Modine Manufacturing Company
Robert Gerbitz* Hendricks Commercial Properties
Karen Nichols* The Chamber of Manitowoc County Michael Nikolai Waupaca Foundry, Inc.
Steven Johnson John Deere Horicon Works
James Ostrom* Milk Source LLC
Patricia Kampling* Alliant Energy Corporation
Paul Palmby Seneca Foods Corporation
Robert Keller* J.J. Keller & Associates, Inc.
Rick Parks Society Insurance
Clifford King Skyward, Inc.
John Pfeifer* Mercury Marine
wisconsinbusinessvoice.org | WMC Board of Directors
Glen Tellock* Lakeside Foods, Inc. S. Mark Tyler* OEM Fabricators, Inc. Donald Wahlin* Stoughton Trailers, LLC Michael Wallace Fort HealthCare Todd Wanek* Ashley Furniture Industries, Inc. Raymond Wilson PricewaterhouseCoopers LLP
(pictured)
Arthur Nesbitt AWNWARD, LLC
WMC Executive Staff Kurt Bauer President & CEO Scott Manley Senior Vice President of Government Relations Katie Yeutter Vice President of Operations & Finance
*not pictured
State of Wisconsin Business is Strong U nemployment is hovering just above three percent. The latest data shows Wisconsin created 42,900 total private sector jobs from November 2016 to November 2017—16,900 of those being familysupporting manufacturing jobs. And more people are working in Wisconsin than ever before. It is safe to say the state of Wisconsin business is strong—if not very strong. Add on major economic developments like German candy maker, Haribo, building its first North American plant in Wisconsin and the now well-known facilities being built by Foxconn in the state and all arrows are pointing up. The one wrinkle in Wisconsin's economic resurgence is the need for more workers, which is what Wisconsin Manufacturers & Commerce (WMC) President & CEO Kurt Bauer
said at October’s State of Wisconsin Business & Industry Luncheon. Available workers are increasingly hard to find, and it will only get more difficult as companies like Haribo and Foxconn expand in Wisconsin. Bauer spelled out his ideas for how to find workers including a targeted marketing campaign, which Gov. Scott Walker proposed one month later at WMC Foundation’s Future Wisconsin Summit (read more on page 37). In addition to workforce issues, House Speaker Paul Ryan delivered the keynote address about the comprehensive federal tax reform package the was moving through Congress. That bill was eventually passed by both the House and Senate, and it was signed by President Donald Trump. Ryan said at the event that tax
reform would help deliver even more economic growth, creating even more opportunity in Wisconsin and across the country. While serious issues like Wisconsin's workforce and tax reform were the focus of the Luncheon, folks from Oshkosh Corporation would say the event saved the best for last. After multiple rounds of voting and nearly 200,000 ballots cast, Oshkosh’s Joint Light Tactical Vehicle was named the Coolest Thing Made in Wisconsin. “There are so many cool things made in Wisconsin,” said Oshkosh CEO Wilson Jones at the event. “To have this recognition, and just to be nominated to be part of the process, has been phenomenal.” n To find out more about the State of Wisconsin Business & Industry Luncheon, visit wmc.org.
State of Wisconsin Business & Industry | wisconsinbusinessvoice.org
Winter 2018 11
New WMC Chairman Calls for Statesmanship
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ay Smith will openly tell you that he at times can have a cynical view on things. However, a short conversation in the halls of Teel Plastics—a company he purchased with his children in 1999—will leave you about as optimistic as you can be. A Madison native, Smith finds his optimism rooted in the State of Wisconsin. After graduating from the University of Wisconsin-Madison in 1963, Smith began his career with Fordem Company, a family owned packaging business. A few short years later, he was named President of the company and started to focus on medical packaging. In 1982, after becoming the North American market leader for sterializable medical packaging, Smith negotiated the sale of Fordem to the British conglomerate DRG PLC—the largest manufacturer of medical packaging outside of America. This created the world’s largest international business in the market segment. By the late eighties, he was named President and he and his wife began living overseas, as well as in Madison. However, in 1993, it was time to retire and get back to Wisconsin. Back in the Badger State—with his family by his side—Smith put another notch on a wildly successful career by acquiring Teel Plastics in Baraboo. Not only has Teel grown dramatically under Smith—including a brand new 150,000 square foot headquarters that was built in 2007—the Baraboo community has flourished in part thanks to the success.
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Being a leader in business is just the first part of the story, though. From 1995 to 2001, Smith served on the UW System Board of Regents, including a two-year stint as President in 2000 and 2001 where he co-chaired Wisconsin’s first Economic Summit. “UW, government and the business community need to work together,” Smith said in an interview. “It is a necessity” Bringing together his experience in business and his experience in higher education, Smith sees a bright future for Wisconsin. But, he also sees roadblocks. “What is the definition of a statesman?” Smith asked somewhat rhetorically when talking about the direction of the state. He thinks there are too few statesman in government roles anymore, and thinks individuals from both sides of the aisle should be able to come together for the betterment of the state. In his new role as WMC Chairman of the Board, Smith intends to both drive policies that will help move Wisconsin forward and encourage more stately discourse in Madison. To answer Smith’s earlier question, the definition of a statesman is “a
wisconsinbusinessvoice.org | Cover Story: WMC Incoming Chairman
skilled, experienced and respected political leader.” There is no question about it, while Smith has never sought political office, he is the definition of a statesman. The third prong of his biography will be written over the next two years as Smith leads the largest and likely most impactful business association in Wisconsin. Smith’s goals include specifics like solving the state’s high workers’ compensation medical costs by implementing a fee schedule and supporting individuals for public office that understand the importance of the business community. Looking more broadly at Wisconsin’s future, Smith believes that business must come together with those in higher education and government to help each other grow a more symbiotic relationship. Having led both successful businesses and the UW Board of Regents, Smith wants to ensure a collaborative relationship moving forward. Last, but certainly not least, Smith is direly concerned with Wisconsin youths’ poor understanding of the free market system and their economic literacy. He believes the next generation of workers must have a broad understanding of history and the principles of our founding fathers to ensure success moving forward. One thing is certain. Smith has high hopes for the next two years. “WMC can have an impact,” Smith concluded. “We can do a lot.” n
Legislation Would Give HR Departments Certainty By Chris Reader WMC Director of Health and Human Resources Policy
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n Philadelphia, city ordinances prohibit employers from discussing salary history with a job applicant. In New York and San Francisco, employers are mandated to provide a transportation benefit to workers. In San Francisco and Seattle, employers must follow local mandates on how to schedule workers’ hours and shifts. In Minneapolis, city ordinances mandate paid “sick and safe” leave for employees. In New York City, certain private employers in the food service and retail industries are now required to sign “labor peace agreements,” which force employers to not oppose efforts by labor unions to unionize their workforce if the employer wants to do business in the city. The same is true for hotels in the state of New York. In Madison, city ordinances create several protected classes of workers beyond what state law sets. These efforts by local officials to micromanage human resources departments and dictate employee benefit packages increase costs for employers and create confusion for employers and workers alike. They also make the communities that enact the ordinances less desirable for job growth, pushing potential developments and investments to surrounding communities that aren’t micromanaging HR decisions of private employers. Luckily the issue is not yet pervasive in Wisconsin, and there is an opportunity for lawmakers to make sure it never is. Sen. Chris Kapenga (R-Delafield)
and Rep. Rob Hutton (R-Brookfield) have introduced legislation to ensure local municipalities in Wisconsin don’t interfere with the relationships between employers and employees as it relates to employment benefits. Their legislation would prevent local officials from
Their legislation would prevent local officials from interfering with private employers in a number of employment law areas. interfering with private employers in a number of employment law areas. With 1,923 different towns, villages, cities and counties in Wisconsin potentially freelancing with mandates on employers, it is important that the Kapenga/ Hutton legislation becomes law. Imagine the disarray for employers and workers alike to keep up with different employment benefit mandates in 1,923 units of government. Specifically, the Kapenga/Hutton legislation does the following: • Stops local governments from dictating what benefits must be offered to employees • Stops local governments from creating their own employment discrimination ordinances • Prohibits local governments and the state from mandating Labor Peace Agreements • Restricts local governments from
duplicating occupational licenses already required by the state • Prohibits local governments from regulating employment hours and schedules • Gives employers the right to ask salary information from prospective employees • Eliminates mandated pay scales for employers that contract with local governments • Sets a statewide standard and prohibits local ordinances regarding wage claims Such a local pre-emption wouldn’t be new in Wisconsin, making the path to legislative success viable. In 2011, Gov. Scott Walker signed a local preemption stopping a costly sick leave mandate from taking hold in the City of Milwaukee. Similarly, in 2005, Gov. Jim Doyle signed a law to prevent cities and other local governments from setting minimum wages that differ from state law. In both instances the two governors, one a Republican and one a Democrat, understood the importance of having statewide employment standards rather than a patchwork of ordinances that are expensive to comply with and cause confusion for employers and workers alike. Hopefully, the legislature will follow those past actions and pass the Kapenga/Hutton legislation in 2018. n
Follow Chris on Twitter @ReaderWMC
Human Resources | wisconsinbusinessvoice.org
Winter 2018 13
Laws Apply to Bureaucrats, Too By Lucas Vebber WMC Director of Environmental & Energy Policy and General Counsel
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ince 2011, Wisconsin has led the nation on regulatory reform and WMC has been at the forefront of those reform efforts. A series of WMCbacked regulatory reforms have been signed into law to increase transparency, improve public involvement, give legislators new oversight powers and ultimately hold bureaucrats accountable. Changing the law, however, is only half the fight. To ultimately improve Wisconsin’s massive regulatory system, we need to ensure those reforms are being enforced. Since 2011 Act 21 was signed into law, agencies have been prohibited from relying on “implied” authority when they take regulatory actions. Specifically, Act 21 created Wis. Stat. § 227.10(2m) stating, “[n]o agency may implement or enforce any standard, requirement, or threshold, including as a term or condition of any license issued by the agency, unless that standard, requirement, or threshold is explicitly required or explicitly permitted by statute or by a rule that has been promulgated in accordance with this subchapter…” That is, all agency regulatory actions must be explicitly required or explicitly permitted by statute or by rule. No state agency can “imply” that they have the power to take action any longer. This past summer Gov. Scott Walker signed 2017 Wisconsin Act 57 into law—also known as the REINS act, which made a number of changes. This legislation increases oversight over administrative agencies by providing
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that any rule expected to cost more than $10 million to implement over a two-year period must first be approved by the legislature before being promulgated. The legislature is also given new tools to ensure the accuracy of cost estimates. This legislation also affords the regulated community the opportunity to weigh in on proposed administrative rules before the agency
To ultimately improve Wisconsin’s massive regulatory system, we need to ensure those reforms are being enforced. begins drafting them—an important opportunity to stake out issues at the front end of the process. Previously, we could only weigh in after the rule had been completely drafted, limiting our ability to impact the ultimate regulation.
wisconsinbusinessvoice.org | Environmental and Energy Policy
Act 57 also requires the Department of Administration to make certain that any proposed regulation is based on actual statutory authority (as required by Act 21). These reforms are great and will improve our state’s regulatory climate going forward. Those improvements will depend, however, on our ability to enforce them. We have to make sure that administrative agencies correctly understand and interpret the law, and follow all the steps along the way. Gov. Walker’s legal team has been going to great lengths to educate agency attorneys, and we are already seeing positive results. Attorney General Brad Schimel and his team have been doing the same. In fact, A.G. Schimel issued a formal opinion, at the request of the State Assembly, which helped interpret Act 21 and made clear that agencies could not take actions like including a new permit condition, unless those actions were explicitly permitted by statute or rule. WMC is proud of the reforms we have helped bring about, but there is more work to do. We will continue to review new regulations and permits for compliance with state law. You can help—as you see proposals come forward, please reach out. Get involved in WMC committees and make your voice heard. The laws are in place to improve our state, now we just have to make sure they are abided by. n
Follow Lucas on Twitter @VebberWMC
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PRIDE Sums Up Kamphuis Tenure
W
hen Bob Kamphuis became Chairman of the WMC Board two years ago, he set his sights on some pretty hefty goals: support business-minded candidates for elected office, pass legislation to reduce Wisconsin’s tax and regulatory burden and protect the business climate gains made over the previous five years. Now that his tenure as Chairman is coming to an end, Kamphuis is proud of his accomplishments. One of the biggest reasons many of the goals Kamphuis had in January 2015 were met comes from the mission he pushes everyday as Chairman, President and CEO of Mayville Engineering Company (MEC). That mission is customer success, value creation, continuous improvement and PRIDE. PRIDE is not just the feeling you get after succeeding in Kamphuis’ book. PRIDE is how you get to success in the first place. It stands for Personal Responsibility in Daily Excellence. Kamphuis often says that “every success story is a people story,” and he thinks the same is true of WMC the last two years. Under Kamphuis’ leadership, WMC has not only protected the improving business climate Wisconsin has seen since 2011, the state has cut taxes even more and Gov. Scott Walker signed into law the REINS Act, which will dramatically improve understanding of the impact surrounding the state’s proposed
Kamphuis at the Future Wisconsin Summit.
regulatory changes. The REINS Act was a signature reform pushed by WMC during the last legislation session that requires any agency rule that will have an economic impact of more than $10 million to be approved by the legislature—giving the business community more say in how regulations impact them and greater oversight of bureaucrats in Madison. “WMC continues to be the best advocacy group in Wisconsin,” Kamphuis said of the last two years. “I am
“I am most proud of the people in the WMC organization." most proud of the people in the WMC organization. We have the right people in the right positions and there is a renewed energy that will position WMC for future success.” He continued, “couple the strong WMC organization with a membership
and board of directors that represent the Who’s Who of Wisconsin businesses and you have a force to be reckoned with.” Even though he will be handing over his title to incoming WMC Chairman Jay Smith, Kamphuis says there is still a lot to do. Two priorities Kamphuis hopes the legislature will accomplish in the near future are streamlining Wisconsin Family and Medical Leave Act (FMLA) with the federal FMLA law and reforming the state’s workers’ compensation law by implementing a medical fee schedule like 44 other states have already done. As Kamphuis readies to leave his post at WMC, he is excited for the organization’s future and is looking forward to one event in particular. The last few years in Wisconsin politics has been divisive to say the least, and Kamphuis wants to bring both sides of the aisle back together. To do that, WMC is partnering with the Wisconsin Education Association Council (WEAC)—the state’s teachers’ union—to host the Wisconsin Statesmanship Reception on January 30. This will be an annual event that both Kamphuis and Smith feel is important to continue for years to come. Kamphuis wants WMC to continue growing and will stay active in the business community even though he is leaving as WMC Chairman. From his point of view, PRIDE will only lead to more successes in the future. n
Outgoing WMC Chairman | wisconsinbusinessvoice.org
Winter 2018 17
Bill Would Raise Business Property Taxes By Cory Fish WMC Director of Tax, Transportation and Legal Affairs
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isconsin’s tax climate has improved, however the Tax Foundation still ranks the Badger State as 38th worst in the nation for its business tax climate. Unfortunately, the “dark stores” bills, Senate Bill 291 and Senate Bill 292, would only make this ranking worse by increasing property tax assessments on local businesses. SB 291 would allow tax assessors to value a property based on assets that are inseparably intertwined with the property. The authors are generally trying to target above market rent leases, which numerous businesses have when using non-traditional investment arrangements. Many businesses that utilize these types of arrangements are those with small profit margins like family restaurants that cannot receive favorable financing elsewhere. This bill could rope in other assets including other types of financial agreements tied to the property, other types of leases, franchise agreements and even mineral deposits that are not being mined. Further, this bill would require a property to be taxed its highest and best use. In practice, this means even if your business does not have one of these assets, your assessment may still increase because your property’s highest and best use could have one. SB 292 would introduce the concept of "market segmentation" into state law. Market segmentation would place limits on what properties could be used
18 Winter 2018
as comparables, and eliminate the ability to use a vacant store as a comparable if it is vacant for longer than is normal for that market segment. This language muddies the definition of what is a comparable property leading to more litigation as both businesses and municipalities try to determine what constitutes a market segment. Proponents of the bills argue that retailers are shifting the tax burden to residential property owners. However,
SB 291 and 292 will increase taxes, create litigation and introduce more uncertainty into Wisconsin's business climate. this is a myth. Statewide, there has been a property tax shift in the opposite direction, from residential property owners to businesses. Businesses statewide already pay an effective tax rate 15 percent higher than residential property owners. In a time of quick technological change and increased competition, raising taxes on brick and mortar businesses is simply bad policy. Proponents of the bills also argue there is a “loophole” in the law that needs to be closed. This concept that a vacant building can be used as a comparable property for assessment purposes has been settled by the courts. Tax assessors now ignore the
wisconsinbusinessvoice.org | Tax Policy
law, forcing businesses to challenge their unlawful assessments. Now assessors have spun a narrative that greatly exaggerates this nationally accepted practice by claiming dilapidated vacant buildings are being compared to new stores. However, assessors cannot show a single court case where a judge used the assessment of a vacant dilapidated property as a comparable for a running business. In reality, comparisons are made between currently occupied buildings and buildings that were occupied at the time of sale or that had been recently vacated. Closing this “loophole” is really just a justification to raise property taxes. Supporters also claim these bills will only affect "big box retailers," but businesses from manufacturers to restaurants will also be impacted. Additionally, the Wisconsin constitution's "Uniformity Clause" requires that taxes apply to all classes of property in a uniform manner, meaning taxing two identical properties differently based solely on the method of financing or other contractual agreements applied to one of the properties is unconstitutional. A significant amount of litigation will likely ensue to determine the constitutionality of these bills. SB 291 and 292 will increase taxes, create litigation and introduce more uncertainty into Wisconsin's business climate. This is not the way to keep Wisconsin open for business. n
Follow Cory on Twitter @FishWMC
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What Makes Wisconsin? An In-Depth Analysis of the Industries that Make Wisconsin’s Economy By Nick Novak WMC Director of Communications and Marketing
S
urvey after survey of how people perceive Wisconsin over the last couple of years have all turned up the same results. Wisconsin is known for a lot of things, but a lot of the things done in Wisconsin are not what our state is known for. The obvious stereotypes of America’s Dairyland mostly hold true. As Wisconsin Economic Development Corporation Chief Operating Officer Tricia Braun said at the recent WMC Foundation Future Wisconsin Summit, “We had comments from people that
20 Winter 2018
[Wisconsin] was mostly farms. It is, we have a lot of great farms, but we have a lot of great things too that people just don’t think about.” Braun discussed this during her presentation for a multi-million campaign to attract new workers to the state that will start in Chicago, but is expected to expand to other cities across the country. Her point that we have a lot of other great things that people don’t think about is one of the main reasons Gov. Scott Walker is asking the legislature to approve the marketing
wisconsinbusinessvoice.org | Featured Story
campaign. People are simply unaware of the economic opportunity in Wisconsin, and even more unaware of what makes up the state’s economy.
Wisconsin’s Economic Makeup If you were to ask 100 people on the street what Wisconsin’s top industry was, you would get all kinds of different answers. From agriculture and manufacturing to retail and finance, there is an abundant variety of different industry sectors in the state.
But, what are the biggest industries that really drive our economy? It turns out there is quite a difference between what people perceive and what makes up Wisconsin. By Gross Domestic Product (GDP), the top five might surprise you. Producing 18 percent of Wisconsin’s total GDP, the top industry in the state is manufacturing. According to the Bureau of Economic Analysis (BEA), manufacturers include, “establishments engaged in the mechanical, physical or chemical transformation of materials, substances or components into new products.” This can include producing parts for a tractor or processing food for consumption. "Wisconsin's manufacturing industry drives our economy,” said Department of Workforce Development Secretary Ray Allen. “In 2016, Wisconsin manufacturing's 9,400 establishments and more than 461,000 workers produced more than $56 billion worth of output.” In total, Wisconsin economic output accounted for $313.1 billion in 2016, according to the latest annual data from BEA. The total U.S. GDP in 2016 was $18.5 trillion. Back to Wisconsin, however. While manufacturing is the largest economic sector by GDP, the rest of the top five are not as obvious. The second largest industry in Wisconsin is Real Estate, Rental and Leasing, accounting for $38.3 billion or 12.2 percent of the state’s GDP. “The major portion of this sector comprises establishments that rent, lease or otherwise allow the use of their own assets by others,” according to BEA. Government is the third largest sector—$34.0 billion or 10.9 percent—followed by Finance and Insurance ($27.4 Billion or 8.7 percent) and Health Care and Social Assistance ($26.7 billion or 8.5 percent). At this point, you might be wondering, where is agriculture and dairy? This is what Wisconsin is known for. But, according to BEA, Agriculture, Forestry,
Manufacturing's Impact on Wisconsin 9,400 manufacturing facilities
461,000 workers
$56,000,000,000
Fishing and Hunting—which includes traditional farming and dairy—only makes up 1.7 percent of GDP and creates $5.4 billion of direct economic output. Now, as you will read on page 27, agriculture—and dairy specifically—has a huge impact on Wisconsin and the story goes beyond just direct economic output. Milk and other dairy products go into thousands of different food products that are manufactured in Wisconsin. Manufacturing is made up of two different sub-sectors, durable and non-durable goods. Non-durable goods, which includes food and beverage manufacturing, makes up about 43 percent of the manufacturing sector. Also included in non-durable goods are products like paper, chemicals and plastics. This is important to point out because part of the economic impact of agriculture and dairy is measured by a portion of the manufacturing output that is dependent on these products.
Badger State Employment When it comes to total employment in Wisconsin, more than 2.8 million people worked in the state in 2016, according to the Bureau of Labor Statistics 2016 annual average of its Quarterly Census
on Employment and Wages (QCEW). Those 2.8 million workers earned a combined income of over $130 billion, working at 169,000 establishments— both in the private sector and government. Looking at the top five industries based solely on employment paint a somewhat different picture than when
2.8 million workers earned a combined income of over $130 billion, working at 169,000 establishments. looking at GDP. Manufacturing is still the number one sector with 463,065 people employed in 2016, making up 16.4 percent of the workforce. However, Health Care and Social Assistance jumps to second place with 386,895 workers—13.7 percent of the total. Based on employment, government is the third largest sector in Wisconsin, employing 380,333 people, and Retail comes in fourth at 308,338. Rounding out the top five is Accommodation and Food Service—which includes establishments like hotels and
Featured Story | wisconsinbusinessvoice.org
Winter 2018 21
Average Total Employment in Wisconsin 1. Manufacturing 16.37% 2. Health Care 13.68% 3. Government 13.45% 4. Retail Trade 10.90% 5. Accomodation and Food Services 8.32% 6. Administrative and Waste services 5.16% 7. Wholesale Trade 4.36% 8. Finance and Insurance 4.30% 9. Construction 3.97% 10. Professional and Technical Services 3.79% 11. Transportation and Warehousing 3.35% 12. Other Services 2.96% 13. Management 2.42% 14. Information 1.73% 15. Arts, Entertainment and Recreation 1.40% 16. Educational Services 1.24% 17. Agriculture, Forestry Fishing and Hunting 0.99% 18. Real Estate, Rental And Leasing 0.90% 19. Utilities 0.34% 20. Unclassified 0.24% 21. Mining, Quarrying, Oil and Gas Extraction 0.11% Source: U.S. Bureau of Labor Statistics
22 Winter 2018
wisconsinbusinessvoice.org | Featured Story
restaurants. This sector has 235,418 workers that make up 8.3 percent of the Wisconsin workforce.
Economic Multiplication Accounting for 18 percent of the GDP and 16 percent of the state’s workforce, manufacturing is clearly an important piece of the state’s economy. In fact, many of the jobs in other sectors can be linked back to the state’s top industry. “Manufacturing has a very high value,” said Steve Johnson, Factory Manager at John Deere Horicon Works. “For every dollar spent on manufacturing, it has a high multiplication effect. So, it creates jobs, income and value for many, many people down the chain.” In fact, according to the National Association of Manufacturers, for every dollar spent in manufacturing, another
Industries with large multiplier effects lead to local banks opening in small towns, grocery stores opening down the street and a variety of other sectors creating jobs. $1.89 is added to the economy. That is the largest multiplier effect of any sector in the U.S. The Manufacturers Alliance for Productivity and Innovation takes the research a step further and says the multiplier effect is even larger if you “take into consideration the entire manufacturing value chain plus manufacturing for other industries’ supply chains.” Then the impact grows to about $3.60 for every dollar spent on manufacturing and the creation of 3.4 workers elsewhere for every manufacturing job created. The second highest sector for this effect is agriculture—which explains why farming and dairy have such a big impact in the state. When accounting for dairy production, the manufacturing of products made with milk and the multiplier effect, dairy’s impact on Wisconsin
WIsconsin Workforce panel at the 2017 Future Wisconsin Summit.
adds up to $44 billion (Jim Ostrom and Louis Gentine explain this in more detail on page 27). Industries with large multiplier effects lead to local banks opening in small towns, grocery stores opening down the street and a variety of other sectors creating jobs. So, when the top five industries by GDP or employment are broken down, many of those jobs and that wealth can be linked back to Wisconsin’s heritage of manufacturing and agriculture.
Wisconsin’s Economic Future Ask anyone in business today, and they will be both excited and nervous about the future of Wisconsin’s economy. The state is growing jobs, more people are working in the state than ever before and according to the latest WMC survey of member CEOS, they are more and more confident on about every aspect of the economy. The one that takes the smile away from leaders in both business and gov-
ernment is the worker shortage. “The only big concern for me as I look out to the next six to 12 months is making sure we have the workforce available and trained,” said Johnson. “We need people who are ready to go in and take advantage of these opportunities that are going to continue to come as the economy improves.” One part of the solution is to train workers who are already here in Wisconsin, according to DWD. “Workers' skills must advance, and that is where innovative worker training programs like Wisconsin Fast Forward enter the picture,” added Allen. “Wisconsin companies, manufacturing and others, can provide on-the-job-training to new and incumbent workers to ‘upskill’ their workforce to increase productivity and implement and utilize new equipment and processes.” But another part of the solution is to attract workers to Wisconsin, which is why Gov. Walker is working with WEDC and the legislature to approve nearly $7
million for a talent attraction marketing campaign. As WMC President & CEO Kurt Bauer said recently, “more than three-quarters of our members are still struggling to hire for the positions they have available.” “Our unemployment rate is at historic lows and our labor force participation rate is one of the highest in the country,” he added. “Simply put, we need more people to move into Wisconsin. Our businesses are ready to expand, they just need more bodies.” Wisconsin’s economy is strong, vibrant and home to a diverse selection of industries. To continue to grow both jobs and wages, leaders from all sectors—both in the private sector and government—need to work together to find solutions to the worker shortage and the skills gap. There is not one silver bullet, unfortunately. However, when Wisconsin comes together, there is no place to go but up. n
Featured Story | wisconsinbusinessvoice.org
Winter 2018 23
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The Miracle of the Pencil By Jack Orton Director Business World and The Future Wisconsin Project
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orty years ago, Dr. Milton Friedman stepped up to a podium on national television and waved a yellow pencil in front of an audience of excited students. “You know it’s a funny thing,” he said, catching their attention, “but, no one in the world knows how to make a pencil.” Now, that’s a rather strange thing to say. How could that be? It’s the most basic, commonplace tool. No one knows how to make it? As looks of confusion shot across the lecture hall and feeling the eagerness of the crowd, Friedman began what is considered to be one of the most concise, yet profound lectures concerning the free market economic model. His speech details the life of an ordinary yellow pencil, breaking down every step of its production: from its yellow-painted wood harvested from the Pacific Northwest cut down by steel saws, to its eraser cap fashioned from natural growing rubber plants in Southeast Asia held in place by an aluminum bracket. He demonstrates that this, seemingly, simple and commonplace utensil is really the embodiment of a complex and highly-sophisticated process. And, that the miracle of the pencil is not that anyone knows how to make it. The miracle of the pencil is how did it get made? The miracle is that thousands of people, all across the world, each performing a small task, banded together to create the pencil. Thousands, maybe millions, of people were involved in this
"Mini" Business World in Marathon County
seemingly simple transaction. No one was forced to do it. It was all voluntary. Why did they do it? Because each one of them thinks he or she is better off from this transaction. Everyone benefits by thinking of themselves. Some individuals sold steel, lumber, rubber, aluminum or the graphite down the middle. Many of these people didn’t speak the same language, praise the same god, or live in the same country. They might, otherwise, hate and despise one another, and, yet, they all came together, peacefully, to create the pencil. That’s the miracle of the free market. The “Mini” Business World program couples Dr. Friedman’s message of the pencil with hands-on activities and competition for local Wisconsin high schools. The program is designed to put students in the driver’s seat and experience first-hand what opportunities are available to them through the free-market system. We teach the history of the free-market system and demonstrate Wisconsin’s role in the
global economy. Dr. Friedman’s speech is just one of many lessons taught over the course of the single-day event. This past fall, we have had a very successful season of “Mini” Business World events, hitting communities ranging from Mayville to Marathon, and we’re ready for a busy and exciting 2018. Our curriculum is designed to expose students to leadership roles and the lessons that go along with them. We want students to walk away from our program with a greater confidence in themselves and their talents. We want students to walk away with a greater appreciation for the big, beautiful world of business, and their role in it. At Business World, we want students to remember the lesson of the pencil. n Are you interested in supporting the “Mini” Business World Educational Program? Please contact the program’s director, Jack Orton, at jorton@wmc.org.
Business World | wisconsinbusinessvoice.org
Winter 2018 25
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WASHINGTON, DC FLY-IN February 13-14, 2018 | Washington, D.C.
Register at: wmc.org/dcflyin The annual WMC/WCCE Washington, D.C. Fly-In is a great opportunity to discuss federal policies that directly and indirectly impact our local and state economies. Included will be briefings from the U.S. Chamber of Commerce, the White House and more.
Wisconsin's Impactful Ingredient By Louie Gentine, CEO, Sargento Foods, Inc. & Jim Ostrom, President/CEO, Milk Source Agricultural Holdings
A
single ingredient contributes $44 billion to Wisconsin’s economy every year. That product is milk. Dairy farming and dairy processing, the two specialties we proudly represent, often grab the headlines, but the sector is so much more diverse. Moving milk from Wisconsin “field-to-fork” impacts virtually every aspect of the state’s wealth. Architecture and construction companies like Miron, Scherrer and Wondra for instance, also carry the mantle of innovation when conceiving and building dairy operations both great and small. Within these newly built walls, specialist engineering firms such as BouMatic, DeLaval and GHD, create state-of-the-art milking parlors on farms as well as 21st Century refrigeration and cooling systems for processors like Johnson Controls, Bassett and many others. Feeding dairy livestock keeps thousands of Wisconsin crop farmers thriving. Our farmers reinforce the food chain with help from leading companies in agri-science and biochemistry, ranging from Elanco to Zoetis, DuPont and BASF. For decades, these companies have advanced animal health while simultaneously increasing milk production to meet growing demand for dairy products. A large part of that growing demand is fueled by natural cheese. Americans are eating the most natural cheese since the government
began tracking the data in 1975. The trend toward less-processed foods, without trans fats and with recognizable ingredients helps explain why natural cheese has the largest economic impact on Wisconsin’s dairy economy at more than $15 billion. Fleets of trucks and logistics specialists are needed at both ends of the process. They haul feed crops from the fields—think Vanderkinter
Milk has a greater economic impact in our state than citrus in Florida or potatoes in Idaho. and Van de Loo—and then send processed milk, cheese, butter and more throughout the state, nation and the globe. Wisconsin’s paper and packaging sector, wrap millions of frozen pizzas and bags of shredded cheese and gallons of drinking milk each year. Those packaged goods are destined for every grocer—from Festival and Pick ‘n Save to the corner Kwik Trip. Behind the scenes, production relies on Wisconsin utilities, including WE Energies and Alliant, to power Wisconsin’s dairy industry. The banking sector, like Greenstone and Farm Credit banks, finance thousands of projects annually. Meanwhile, insurance companies such as Secura and Hastings Mutual are protecting innumerable assets. Millions of tons of byproducts— once considered waste, have found
a sustainable, viable new life as nutritious dairy feed. This includes leftovers from ethanol production and canning plants. Even leftover rubber from tire sidewalls, can be repurposed as ballast for feed piles on Wisconsin farms. All of which has contributed to the lowest-carbonfootprint farming in our state’s and nation’s history. There isn’t a mom-or-pop diner or fast-food restaurant located near one of the state’s 9,520 dairy farms or 203 dairy plants that hasn’t benefited from the daily lunch rush. That economic effect ripples to every corner gas station that pumps diesel to the dairy transport trucks and unleaded to the 215,000 workers employed directly and indirectly by the dairy industry in Wisconsin. To put all this into the simplest terms, milk has a greater economic impact in our state than citrus in Florida or potatoes in Idaho, according to the University of Wisconsin. We should keep investing in our products, processes and, most importantly, our people. While Dairy is our core, we must also leverage our natural resources and the strong Wisconsin work ethic to foster innovation in other industries like Tech and Manufacturing. If we shield the entrepreneurial flame from the winds of doubt and uncertainty, and stay true to our dairy roots, Wisconsin families and our economy will thrive and we will forever be known as ‘America’s Dairyland.’ n
America's Dairyland | wisconsinbusinessvoice.org
Winter 2018 27
Wisconsin Reforms Need Defending in 2018 By Jim Pugh Senior Director of Membership & Advocacy “It is time to act in bold ways to improve Wisconsin’s business climate and create jobs! The quality of life we enjoy in Wisconsin hinges on assuring a strong economy with a growing job base.” WMC Jobs 2010 Agenda Approved by WMC Board of Directors in 2009
I
n July last year, Wisconsin made national news with the announcement that Foxconn would be creating nearly 13,000 jobs in southeastern Wisconsin. Simply unthinkable a decade ago. The electronics manufacturer announced it would make the largest foreign investment in American history in the heart of our state’s industrial corridor in the Kenosha and Racine area just north of Illinois. They cited our manufacturing legacy as a key factor in their decision, and our improving business climate played a major role. But long before Foxconn 2017 there was “Wisconsin Job 2010,” a WMC blueprint for job creation passed unanimously by the WMC Board in the depths of a recession. The plan today seems visionary. At the time it seemed like a pipe dream. In 2018, the Wisconsin elections should be a referendum on jobs, growth, an improved business climate and the new direction for our state. Wisconsin voters have elected a pro-growth governor, a pro-growth legislature, and a rule-of-law Supreme Court majority
28 Winter 2018
and Attorney General. Will voters stay the course or go back? None of our victories happened by accident. In 2009, the Wisconsin Jobs 2010 Agenda called for three simple changes to our business climate that would lead to increased job creation and make us one of the most competitive states in the nation.
WMC’s issue advocacy will take the business message to the public to educate them about jobs and the economy. The plan called for tax relief, regulatory relief and an end to predatory lawsuits. The simple, three-legged stool of job creation was needed in Wisconsin and the WMC Board made a clarion call for reform that was taken to the voters
wisconsinbusinessvoice.org | Advocacy
with issue ads. “We need to be a state that controls government spending, limits taxes, streamlines regulations and holds the line on predatory lawsuits. That’s why I am strongly supporting the Wisconsin Jobs 2010 agenda,” said Thomas J. Howatt, WMC Chairman and President & CEO of Wausau Paper. WMC’s issue advocacy program commenced a public education campaign, and the public heard the call for jobs. In 2010, the voters elected Gov. Scott Walker, who stood before cheering supporters on election night with a sign on the podium that read: “Wisconsin is Open for Business.” That may have been one of the greatest understatements ever. Under Gov. Scott Walker and the pro-jobs legislative majorities, WMC successfully worked to pass the entire WMC Jobs 2010 Agenda, and much more. WMC’s team of lobbyists spent hundreds of hours at the Capitol fighting for reforms to improve our business climate. Our members contributed, too, with time and money. It was a remarkable team effort that has brought jobs for the families in our state. Gov. Walker, of course, took the lead to control government spending and taxes by passing Act 10, which reformed government unions to get taxes and spending under control. WMC supported, and the legislature passed, comprehensive lawsuit reform to cap non-economic damages on
medical malpractice, and to put limits on punitive damages. Those reforms were needed because an activist Supreme Court had overturned those reforms in 2005. WMC supported and Gov. Walker signed the Manufacturer and Agriculture Income Tax Credit, a $300 million tax cut that has stimulated job creation throughout our state. On the regulatory front, WMC backed a series of reforms aimed at cutting red tape and putting accountability into our regulations. At WMC’s suggestion, the legislature passed a law that gives the governor veto authority over rules before and after they are approved by a state agency. Recently, the legislature passed the state REINS Act that requires the legislature to approve any rule that costs more than $10 million. And, of course, there was the passage of the historic Right to Work legislation at the behest of WMC. None of this went without a fight from anti-business forces—unions, radical environmentalists and personal injury lawyers—who tried to recall Gov. Walker and the legislature. WMC and our issue advocacy program took our case to the public again, and again. And, again and again the public has decided that jobs are their top priority. All told, the WMC Issues Mobilization Council, Inc., has spent $43 million on issue advocacy since 2005. And we can’t stop now. WMC’s issue advocacy will take the business message to the public to educate them about jobs and the economy regarding the Supreme Court, governor, attorney general and the legislature. The problem for the business community is that national political winds could blow into our state and turn back our policy gains. That’s why the business community needs to commit the resources needed to win the debate this fall with public on TV and other media. n
WISCONSIN'S MAJOR MILESTONES 2011
Act 10 Becomes Law
2012
Gov. Walker Wins Recall Election
2013
Manufacturing & Agriculture Tax Credit First Implemented
2014
Gov. Walker Re-Elected to a Second Term
2015
Right to Work Becomes Law
2016
Manufacturing & Agriculture Tax Credit Fully Implemented
2017
Foxconn Announces Plans to Invest in Wisconsin
Advocacy | wisconsinbusinessvoice.org
Winter 2018 29
A Special Thanks to Our 2017 Sponsors By Kari Hofer WMC Foundation Executive Director
W
MC Foundation’s mission is to provide business and economics education, promote the value of the free enterprise system and ensure a high quality of life for our citizens. None of that happens without the generous and caring support of our donors. In 2017, we had companies and individuals from all corners of Wisconsin and a wide variety of industries
who believed in what we do each day. I cannot begin to express my gratitude to all of our donors and sponsors. From support of Wisconsin Safety Council and all of its programming to Wisconsin Business World and the Future Wisconsin Project, WMC Foundation supporters have helped make the state better for all who live and work here. n
Thank you to all of our donors and sponsors from 2017:
Foundation
30 Winter 2018
wisconsinbusinessvoice.org | WMC Foundation
WMC Foundation Executive Director Kari Hofer speaking at the Future Wisconsin Summit.
Gov. Scott Walker delivering remarks at a WMC Foundation event in Madison.
4 Imprint Inc
Elmbrook Rotary Foundation
Meijer
Southwest Airlines
A. O. Smith Foundation
Enbridge Energy Co., Inc.
Mercury Marine
Sparta Area Chamber of Commerce
ABB Inc
Enbridge Energy Co., Inc.
Stantec Consulting Services Inc
Aetna Life Insurance Company
Energis High Voltage Resources Inc.
Metals Service Center Institute Ryerson
Agropur Inc Aladdin Engineering & Mfg., Inc. Amerhart Ltd. American Council of Engineering Companies of Wisconsin
Michael Best & Friedrich LLP
Enviro-Safe Resource Recovery
Middleton Chamber of Commerce
Evan & Marion Helfaer Foundation
Miron Construction Company, Inc
EVCO Plastics
Nextera Energy Point Beach Nuclear Plant
Expera Specialty Solutions LLC
State Farm Insurance Stevens Construction Corp. Suttner Accounting, Inc. T K Group On-Site Mobile Medical Ted & Grace Bachhuber Foundation
Nichols Paper Products Company
Teel Plastics, Inc.
Oconomowoc Area Chamber of Commerce
The Chamber o Manitowoc County The George Kress Foundation Inc.
OEM Fabricators, Inc.
The Phelps Group at Morgan Stanley
American Transmission Company
Fearings Audio Video Security
Ameriprise Auto & Home Insurance
Flexion Inc
Angus-Young Associates
Foremost Farms USA
Aon Risk Services Central, Inc.
Generac Corporation
Apache Stainless Equipment Corp.
Georgia-Pacific
Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
Associated General Contractors of Wisconsin Inc.
Grassland Dairy Products Inc.
Old National Bank
Grzeca Law Group, S.C.
Omro Thrift Store
Guardian Pipeline
On Track Communications
Herbert H. Kohl Charities Inc.
Orthopaedic Associates of Wausau
Heritage - Crystal Clean
Oshkosh Corporation
HNi Risk Services, LLC
Packaging Corporation of America
Hydrite Chemical Co.
Pearl Engineering Corp
Hy-Test Safety Shoe Service
Plumbers Union Local 75
UW Madison School of Business Weinert Center for Entrepreneurship
InSinkErator
PricewaterhouseCoopers LLP
Vogel Bros. Building Co.
ITU AbsorbTech Inc
Primex, Inc.
Walmart Stores, Inc.
J. F. Ahern Co.
Red Wing Shoes
We Energies Foundation
J. H. Findorff & Son Inc.
RGL
Wegner CPAs
J. J. Keller & Associates, Inc.
Rockford Systems, LLC
Johnsonville Sausage, LLC
Rockline Industries
West Bend Area Chamber of Commerce
Juneau County Economic Development Corp.
Rockwell Automation/Control Systems
Colony Brands Inc.
Kalahari Resort & Convention Center
Royle Printing Company
Wisco Boxes LLC
Conney Safety Products LLC
Kikkoman Foods, Inc.
RPB Safety LLC
Wisco Investment Management LLC
Constellation Energy
Kohler Co.
Rusk County Economic Development
Cranberry Creek Cranberries, Inc
Kramer Business Service, Inc.
SafeStart SafeTrack
Cristo Rey Jesuit High School
Kriete Truck Centers
Schenck S.C.
Culver's of Rhinelander
Kudick Chevrolet Buick
Schneider National Inc.
Dirty Ducts Cleaning, Environmental & Insulation
L & S Electric Inc.
Schreiber Foods Inc.
Wisconsin Department of Workforce Development
Lakeside Foods, Inc.
Seats Incorporated
Wisconsin Insurance Alliance
Madison Gas and Electric Company
Sentry Equipment Corp.
Wisconsin Lift Truck Corp.
Magid
Sentry Insurance
Manpower Inc.
Skana Aluminum Co
Wisconsin Public Service Foundation, Inc.
Marshfield Area Chamber of Commerce & Industry
Skyward, Inc.
Master Lock Company
Society Insurance, a Mutual Company
Badger Meter, Inc. Bank Mutual Bank of Mauston BDO USA, LLP Blankenheim Services LLC Border States Brooks Safety Solutions LLC Bulwark Protective Apparel/VF Imagewear Cardinal FG Carhartt CenturyLink Certco Inc. Charity Golf International Clasen Quality Chocolate
Documation, L.L.C. Donaldson Company Dr. Makeba and Damond Williams Boatwright Charitable Fund Eau Claire Area Chamber of Commerce EHS Managment LLC
MasterMold, Inc.
Smith & Gesteland
The Toro Company Tweet Garot Mechanical Contractors Tyndale Company Tyson Foods Uline Shipping Supply Specialists Uncle Mike's Bake Shoppe
West Bend Mutual Insurance Co. Wipfli LLP
Wisconsin Bricklayers & Allied Craftworkers Wisconsin Center for Manufacturing & Productivity Inc
WPPI Energy Xcel Energy Zero Zone, Inc.
WMC Foundation | wisconsinbusinessvoice.org
Winter 2018 31
Rule of Law Should Drive Supreme Court By Judge Michael Screnock Candidate for Wisconsin Supreme Court
I
n early 2016, the United States Supreme Court lost one of the brightest legal minds to ever don the black robe when Justice Antonin Scalia, a personal and professional hero of mine, passed away. The loss of Justice Scalia left an unmistakable void on the nation’s highest court in more ways than one, and his untimely passing underscored the importance of an independent judiciary beholden to nothing but the rule of law—a position ‘Nino’ never strayed from during his nearly 30 years of service. The judicial philosophy embodied by the late Justice Scalia—fidelity to the Constitution, the rule of law and the separation of powers—is the same philosophy that has guided me throughout my career. Far too often, we see a tendency from judges at all levels to rule with an activist bent, ultimately legislating from the bench by allowing their own personal biases to determine what is and isn’t good public policy. What these judges either fail to realize or just plain ignore when they make these decisions is that doing so couldn’t be further from the job they’ve all sworn an oath to do. Judges are not legislators, nor are we executives. It is up to duly elected representatives in state legislatures and in Congress to pass the laws that govern us, and it is up to governors and the President to veto or enforce those laws. Our job as judges is to interpret and apply the law, based not on our personal or political beliefs, but by relying
32 Winter 2018
on statutes and the Constitution. Simply put, our job is to be arbiters of the law; not policy analysts or political activists. Having an independent judiciary comprised of justices with an unwavering commitment to upholding the rule of law, to recognizing and respecting the separation of powers, and to interpreting the Constitution as it was intended is critical to preserving and maintaining our democracy and our republic. As a lifelong Wisconsin resident who has committed my life to public service—both as a judge and a local government official—I would consider it a tremendous honor to serve the people of our state as a member of the Wisconsin Supreme Court by adhering to the judicial principles outlined above. Citizens across the Badger State deserve the security and predictability of an independent, nonpartisan judicial branch, made up of justices who under no circumstances legislate from the bench and who rely solely on statutes, the Constitution and the rule of law when presiding over each and every
wisconsinbusinessvoice.org | State Supreme Court
case that comes before them. By electing me to the bench next spring, that is exactly what they will get. n Judge Michael Screnock was appointed to the Sauk County Circuit court in 2015 and ran unopposed for election in 2016. He has enjoyed the privilege of serving his hometown in this capacity, and is particularly proud of the work Sauk County's Drug Court has accomplished since its inception last year. He earned his undergraduate degree in mathematics from the University of Wisconsin-Madison, and received an MBA from Eastern College in Pennsylvania. He worked as a city administrator and as a finance director in the cities of Reedsburg, Washburn, and Ashland, before deciding to go back to the University of Wisconsin-Madison to pursue his Juris Doctor. He worked at Michael Best & Friedrich prior to becoming a judge. Judge Screnock and his wife Karen live in Reedsburg, and they have three adult children.
STA F F N E W S Cory Fish Director of Tax, Transportation and Legal Affairs Cory joined WMC in October 2017. Prior to joining WMC, he worked in state government. Most recently he worked for State Sen. Alberta Darling, Co-Chair of the powerful Joint Committee on Finance, serving as her Legal Counsel. Cory works with the legislature and state agencies to improve Wisconsin’s business climate by advocating for sensible tax policies, strong infrastructure and a fair civil justice system. He earned a B.A. from UW-Eau Claire, Summa Cum Laude, and a J.D. from the University of Wisconsin Law School, where he graduated Cum Laude. He is a licensed attorney in Wisconsin.
Staff News | wisconsinbusinessvoice.org
Winter 2018 33
Smart Investments Will Attract Talent By Gordon Hintz (D-Oshkosh) Assembly Minority Leader
R
ecently, Gov. Scott Walker announced a $6.8 million marketing campaign to attract Chicago millennials to Wisconsin. This shows that the governor understands a key economic problem our state is facing, but has no clue how to solve it. Wisconsin has a people shortage. We don’t have enough working age people to fill the jobs available in our economy. Recent data suggests that our state is expected to need 45,000 additional workers in seven years but lacks the people to fill this need. As we move into the latter half of the 2017-18 legislative session, Assembly Democrats will pursue economic policies which recognize the fact that jobs follow people. Young people increasingly want to live where there are good schools, strong transportation infrastructure and public amenities, such as attractive parks. And they want to live in a place with clean air and water. To that end, Democrats in Wisconsin support policies that move beyond the idea of subsidizing foreign corporations or spending millions of dollars to promote shorter commute times. To get our economy truly moving again, here are just a few of our ideas to draw young people to our state and to keep recent graduates here.
1. Build communities that will attract millennials Part of the misplaced logic behind Gov. Walker’s advertising campaign is
34 Winter 2018
than any other part of the state. We can support these areas through the expansion of broadband, more K-12 funding and support for innovative organic farming practices.
3. Think towards the techfocused future
that shorter commutes are simply not a desired enough outcome to bring people to Wisconsin. Young workers want bike paths, public transport, parks, vibrant downtown areas and more. The thick irony of Gov. Walker
We can invest money in tech startups and other homegrown businesses that will attract and maintain talent. promoting commuter trains after turning down $800 million in federal money for high-speed commuter rail should not be lost on any Wisconsinite.
2. Provide More State Support for Rural Communities Our rural communities are facing a higher rate of young people leaving
wisconsinbusinessvoice.org | Legislative Voice - Democrats
Tech jobs are a driving force in the economy now and moving forward. We can honor our manufacturing traditions while still keeping an eye on the future. To do this we can invest money in tech startups and other homegrown businesses that will attract and maintain talent. We see how successful this can be in areas full of local tech businesses like Eau Claire.
4. Continue Pushing Policies that help Wisconsin Families Young families want to live in a state where public policies help them thrive. Assembly Democrats support expanded Family Leave, an increase in the child care tax credit, student loan refinancing and a fully funded public education system. It makes sense that young families will move to places that are supportive of young families. Wisconsin doesn't need a short-term advertising campaign. Everything our state government does should market our state, from the strength of our cities to the beauty of our natural spaces. To put our best foot forward, we must invest in our state today and long into the future. n
Economic Opportunity Will Drive Wisconsin Forward By Sen. Scott Fitzgerald (R-Juneau) Senate Majority Leader
H
eading into our eighth consecutive year of holding majorities in both legislative chambers, Republicans in Madison can point to another year in which we stayed focused on our primary objective: increasing opportunities for Wisconsin residents and businesses. As elected officials, we recognize that our role in keeping our state’s economy vibrant is not to try to legislate prosperity, but rather to create an environment for increased opportunity. Republicans have made great strides in improving our state’s business climate over the last seven years. We have lowered the tax burden by billions, reined in excessive regulation, reformed our legal climate and invested in education and infrastructure. The unemployment rate is at a historic low, companies are hiring and expanding again, and jobs are moving in from other less business-friendly states. With that foundation, we have been able to shift our focus to creating new opportunities. The financing package approved to lure Foxconn to the state is a great example. The tech manufacturing giant will create thousands of jobs, but just as important, there will be abundant opportunities for companies along its supply chain. From shipping, logistics and tech applications to software and hardware development, the sky is the limit for startups as well as existing companies looking to diversify their products and operations. There will also be an
unprecedented demand for skilled trade workers to build and maintain Foxconn’s large campus. The repeal of the mining moratorium is another example of legislative priorities this session. Mining is one of our state’s oldest industries, but one cannot overlook its importance to today’s economy. We are blessed with an abundance of natural resources
We recognize that our role in keeping our state’s economy vibrant is not to try to legislate prosperity, but rather to create an environment for increased opportunity. that support our manufacturing sector, and advances in technology allow them to be utilized with minimal impact to our pristine northwoods environment. Removing the moratorium
was a necessary step to create the opportunity for mining jobs to return to the northern part of our state. The juxtaposition of these two legislative initiatives - attracting a type of manufacturer that is the first of its kind in the state and reviving an industry that has been around for hundreds of years - is an illustration of how Republicans in Madison will pursue any opportunity to expand economic diversity. Looking ahead to the future, we will have more jobs than we have skilled workers to fill them. Working with Gov. Scott Walker and the Wisconsin Economic Development Commission (WEDC), I expect we will increase out-of-state marketing efforts that sell Wisconsin as a destination workplace. By emphasizing our diverse workforce from biomedical and manufacturing to now LCD, our state’s high quality of life, and beautiful outdoor amenities, we need to work harder to keep Wisconsin graduates and attract skilled workers. Second, we will continue to review our regulatory climate to ensure that roadblocks are eliminated or, at the very least, streamlined to improve efficiency. We must ensure that government doesn’t stand in the way of growth and progress. By staying vigilant, state legislative Republicans will continue to serve as a catalyst for increased economic diversity and new opportunities for workers of all ages. n
Legislative Voice - Republicans | wisconsinbusinessvoice.org
Winter 2018 35
Activity: Industry: Widgets: Soils: Method: Material: Product: Key Features:
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wisconsinbusinessvoice.org
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Training, Talent and Technology J obs... check. Great K-16 schools... check. Workers…well, we can't check that box just yet. But thanks to a talent attraction marketing campaign announced in November at the Fourth Annual Future Wisconsin Summit by Gov. Scott Walker, Wisconsin could soon have enough people to take full advantage of the state's world class K-16 educational system, diverse career options and high quality of life. The plan is to spend nearly $7 million to convince Midwestern millennials, many with Wisconsin ties, to live and work in America’s Dairyland. The campaign is the result of several years of extensive research by the Wisconsin Economic Development Corporation (WEDC) and will highlight Wisconsin’s low cost of living, short commute times and outdoor recreation options. Gov. Walker’s talent attraction campaign announcement made statewide news, but so did a panel featuring Foxconn executive Dr. Louis Woo who joined WEDC Secretary Mark Hogan and Department of Administration Secretary Scott Neitzel in discussing how the Taiwanese technology company’s
plan to build a massive manufacturing facility in Southeastern Wisconsin can help develop a high tech eco-system that can draw investment and talent from all around the world. Dr. Woo said the Foxconn plant, which will include an assembly line, as well as high precision molding, tool and die and packaging facilities, won’t just build televisions, although it will eventually produce seven million units per year. He said for him, the most exciting part of the investment will be to use the ‘8K-5G’ high resolution imaging technology for medical uses, such as nanosurgery. Rockwell Automation President/CEO Blake Moret gave a keynote presentation on preparing the pipeline of workers. He talked about a joint program Rockwell created with Manpower to help veterans get trained for in-demand positions in advanced manufacturing. Moret also talked about making sure workers today understand that what they do is important, that they have the support to do a good job and believe they have a chance to advance in their chosen field.
Preparing people for Wisconsin’s current and future careers was the topic of an all-star panel, which included the heads of Gateway and Waukesha County Technical Colleges, UW-Parkside and -Milwaukee and Marquette University. The discussion covered a wide range of education topics, including how to prepare workers for rapidly evolving and advancing technology that characterizes the jobs of the future. The summit finished strong with the premiere of a WMC produced video showcasing Wisconsin as a great place to raise a family. The video, Wisconsin: You Know You’re Home, features two Wisconsinites who met while studying and working in Chicago and decided to return to the state of their birth to raise their family. The video compliments one WMC produced for last year’s summit, which focused on Wisconsin as a great place to start a business as well as a great place for a millennial to start their career. n Find out more about the Future Wisconsin Summit at FutureWI.org.
Future Wisconsin Summit | wisconsinbusinessvoice.org
Winter 2018 37
Oshkosh Corporation’s Joint Light Tactic Vehicle edged out three other fantastic Wisconsin manufactured products to win the title Coolest Thing Made In Wisconsin in 2017. The contest was created in 2016 as a way to educate people about Wisconsin’s formidable manufacturing sector. Special thanks to Johnson Financial Group for sponsoring the contest and to Fall River-based E.K. Machine for making the trophy proudly held above by Oshkosh Corp. CEO Wilson Jones.
COOLEST
THING
MADE IN
OSHKOSH CORPORATION OSHKOSH JOINT LIGHT TACTICAL VEHICLE
WISCONSIN
The Joint Light Tactical Vehicle is built based on decades of tactical wheeled vehicle engineering and manufacturing experience. Only the Oshkosh JLTV delivers next generation performance to protect military personnel and serve the mission. Sponsored By:
ARIENS COMPANY
GENERAC
WAUKESHA XC GENERATOR
FOND DU LAC JOYSTICK PILOTING SYSTEM
The Ariens Sno-Thro is a snow thrower that delivers a minimum 50-foot throwing distance, a must for Wisconsin winters. Designed and built for extreme durability with all-steel construction, cast-iron gear case and high output impeller. The brightorange machine will easily power through Wisconsin's snow.
XC Professional Series Portable Generators are engineered specifically for construction sites. Featuring Generac’s G-Force engine - the only pressurelubed engine designed exclusively for generator use, providing reliable and durable best-in-class power on any job site.
Mercury’s Joystick Piloting System uses innovative technology to take control of up to 1,400 horsepower worth of engines on a boat to move it sideways, diagonally or spin the boat on its own axis. Additionally the Skyhook feature can keep the boat in the same exact spot without using an anchor.
BRILLION SNO-THRO
38 Winter 2018
wisconsinbusinessvoice.org | Coolest Thing Made in Wisconsin
MERCURY MARINE
Employee Benefits Key to Retention By Russ Cain WMC Group Benefits Director
I
n today’s tightening labor market, employers are constantly looking for creative ways to attract and retain talent, according to numerous employer surveys this past year. A recently released Hays Companies survey of 2,000 employees found that 71 percent of respondents would be willing to take a cut in pay for their ideal job.
A popular recommendation is that employers need to look beyond base salary to attract and retain top talent. The Society of Human Resource Management’s (SHRM) 2017 Employee Benefits survey reported that one-third of responding companies have increased their employee benefits in the battle for talent. “Most companies are now using benefits as a strategic tool for recruiting and retaining talent in this competitive environment,” said Shonna Waters, Vice President of Research for SHRM. While health and wellness offerings are frequently cited as the most likely to increase, low or no cost changes are also being employed quite often. Flexible work arrangements are also becoming more common in today’s workplace. The aforementioned SHRM survey indicates that 62 percent of responding organizations allowed some type of telecommuting, and 57percent offered flextime—allowing employees to choose their work hours within limits established by the employer. There has also been a marked
increase within our participating employers in WMC’s group life and disability plans enhancing both employer-paid benefits and adding voluntary benefit offerings. It’s commonplace for employers to annually tweak their health insurance plan, but all too often their life and/or disability plans haven’t been updated in years. As you consider benefit changes in 2018, disability coverage deserves more attention. In a survey conducted by LIMRA, an association of financial services and insurance companies, 65 percent of respondents said that
A popular recommendation is that employers need to look beyond base salary to attract and retain top talent.
most people need disability insurance. Of those respondents, 48 percent said they personally need disability coverage and only 20 percent actually had disability coverage. The greatest financial weakness all too often is little or no income protection. While benefits alone will not attract workers, the quality of benefit programs contributes to overall employee satisfaction and retention. As employers consider plan changes they should also seek out some benchmarking data to compare what
other similar firms are offering their employees. Benefit advisors are a good source for such data and the recently released National Compensation Survey published by the Bureau of Labor Statics is an excellent free source for benefits data (bls. gov/ebs/benefits). Some care should also be taken in providing benefits that your employees value. Employers with a broad mix of workers will find that perceptions of benefits vary widely from older boomers to younger generation X , Y and Z employees. We also commonly see differing perceptions between hourly versus salaried employees. A one size fits all approach will not work in today’s day and age. That does not mean you need to throw out the playbook and start over, but looking at the benefits package you offer employees is a great place to start. Not only can it be a great way to retain top talent, it can also be good for your bottom line. In many cases, WMC Group Benefits can find ways for you to save money on either administrative costs or your premiums for life and disability insurance. There is no better time than now to see if the same can be said for your company. n For more information, contact Russ Cain at 608.258.3400.
Group Benefits | wisconsinbusinessvoice.org
Winter 2018 39
W M C E C O N O M I C S U RV E Y R E S U LT S
CEOs Concerned About Workforce Shortage
W
isconsin’s business leaders are concerned about finding labor and the rising cost of health care, but also say the state and national economies are strong, according to the latest economic survey conducted by WMC. Nearly every question about the current state and direction of the Wisconsin and U.S. economies in the semi-annual survey, completed by 210 C-suite level executives, shows improvement from six months ago. For example, more businesses plan to hire, more were profitable during the last six months and expect to be in the next six months, more rate the economy as strong or very strong and more believe Wisconsin is headed in the right direction. On the down side, the number of businesses that report difficulty finding workers rose to 80 percent, up from 77 percent six months ago, 70 percent a year ago and 53 percent in 2014. That
explains why 81 percent of respondents said they either strongly support (31 percent) or somewhat support (50 percent) Gov. Scott Walker’s plan to spend $6.8 million on a campaign to attract workers to Wisconsin. “The fact that our workforce is dominated by Baby Boomers who are at or nearing retirement with far fewer Gen Xers and Millennials coming in behind is causing a worker crisis in Wisconsin,” said WMC President & CEO Kurt Bauer. He applauded Gov. Walker’s recently announced marketing campaign to attract talent to Wisconsin, saying it is the only logical response. “The lone solution for an acute shortage of working age people is to attract more working age people,” Bauer added. The governor’s marketing campaign is designed to help businesses moving to the state like Foxconn—which plans to build a massive factory in Southeastern Wisconsin—and other companies al-
ready in the state struggling to find workers. Speaking of Foxconn, 73 percent of survey respondents support the incentive package for the Taiwan-based technology company. In addition, more executives list rising health care costs as the top concern facing their business. In fact, when asked “what is the number one thing state government could do to help your business,” 34 percent said “make healthcare more affordable,” up from 20 percent in June. Reduce taxes and regulations were tied for second at 20 percent each. “Healthcare costs are clearly a burden on Wisconsin businesses,” said Bauer. “Obviously, the state legislature can’t reform or repeal the federal Affordable Care Act, but they can answer the cry for help from businesses by joining 44 other states in enacting legislation to create a fee schedule to contain workers compensation medical costs.” n
Other findings: • Businesses reporting difficulty finding workers rose to 80%, up from 77% in June, 70% a year ago and 53% in 2014.
profitable during the past six months.
• 72% of respondents support the incentive package for Foxconn.
• 61% plan to add employees in the next six months, up from 59% in June and 58% a year ago.
• 34% said, "make healthcare more affordable," was the number one thing state government could do to help their business. Reduce taxes and regulations were tied for second at 20% each.
• 90% said Wisconsin is headed in the right direction, up from 86% in June.
• 91% of respondents say their business was
40 Winter 2018
• 93% say their business will be profitable during the next six months, up from 90%
• 77% of those surveyed either strongly (34%) or somewhat supports (43%) the federal tax reform plan recently signed into law.
wisconsinbusinessvoice.org | WMC Economic Survey Results
W I S C O N S I N L I K E LY VOT E R P O L L
Wisconsin Voters Think Economy Will Improve Wisconsinites are more optimistic
legislation. If passed, businesses of all
This poll of likely voters was
about the economy than they were
sizes and from all sectors would see
conducted by the Tarrance Group
last year according to a recent scien-
their property taxes increase.
from Dec. 5-7 and has a margin of
tific poll commissioned by Wisconsin
When asked, “if the state legislature
error of +/- 4.5%.
Manufacturers & Commerce (WMC).
was going to consider increasing prop-
To see the full poll results, please
Those surveyed also support lower
erty taxes on businesses, would you
taxes and reforming the state’s work-
favor or oppose this proposal?” only 24
ers’ compensation system, but voters
percent of Wisconsin voters said they
are still deadlocked on increasing the
would support the proposal, while 64
gas tax.
percent oppose. Additionally, a major-
“Wisconsin is on a roll and voters
ity of Republican voters (81%), Demo-
know it,” said WMC President & CEO
cratic voters (54%) and Independent
Kurt R. Bauer. “With near record-low
voters (58%) oppose raising property
unemployment and one of the highest
taxes on businesses.
labor force participation rates in the
A large plurality (49%) of voters also
country, it is no surprise that Wiscon-
support reforming Wisconsin’s workers’
sinites are optimistic about the state of
compensation system, while only 27
our economy.”
percent oppose reform.
The poll of 500 Wisconsin voters was
“It is a no-brainer to pass significant
taken December 5-7 and was con-
reforms to our workers’ compensation
ducted by the Washington, DC-based
system,” Bauer added. “Forty-four oth-
Tarrance Group. The margin of error is
er states have a medical fee schedule
plus or minus 4.5 percent.
that brings down costs for businesses,
According to the poll, 39 percent of voters believe the state’s economy will
visit wmc.org.
Economic Improvement in 2018 43% see no change
39% see improvement
Worker’s Comp Reform 27% Oppose 49% Support
and voters agree that this reform is necessary.” n
improve, which is up from 35 percent last year and 22 percent in 2015.
Business Property Tax Increase
Forty-three percent think the Wisconsin economy will stay the same, up slightly
Oppose % by Party
from 42 percent last year.
100
The poll also asked about important
64% Oppose
policies that are being considered by the legislature. The first focused on business property taxes, which would be greatly impacted by so-called “dark store”
80
81%
60
24% Support
54%
58%
40 20 0
Wisconsin Likely Voter Poll | wisconsinbusinessvoice.org
Winter 2018 41
Focus on Energy Fuels Wisconsin’s Economy
S
aving energy saves money. As a result, many Wisconsin employers credit the state’s Focus on Energy program with making them more efficient and competitive on the global stage. “We are very fortunate to have this energy efficiency program in our state,” said Jeff Landin, Wisconsin Paper Council President. He credits Wisconsin’s statewide energy efficiency and renewable energy program with retaining good paying manufacturing jobs across rural Wisconsin. Each year more than 5,500 Wisconsin businesses reduce energy waste by working with Focus on Energy. Wisconsin utilities have partnered with Focus on Energy since 2001. Focus on Energy’s information, resources, and financial incentives help Badger State businesses and residents lower their costs and stimulate the local economy by completing cost-effective energy-related projects. These are projects that would often not otherwise get completed, or take years more to be scheduled. Focus on Energy offers technical engineering expertise that many businesses do not have in-house. By implementing new technologies and best practices, businesses improve their bottom lines by reducing one of their primary input costs. In the past five years, Focus on Energy has delivered nearly $800 million worth of net economic benefits
42 Winter 2018
to Wisconsin. Strategic Energy Management programs and integration of processrelated technologies are a few examples of how Focus on Energy fuels Wisconsin’s economy by helping
Focus on Energy offers technical engineering expertise that many businesses do not have inhouse. businesses large and small. The benefits of energy efficiency and renewable energy are greater than reduced energy consumption and cost savings. They support technology innovation, job creation, lowered environmental impacts, and reduced dependence on nonrenewable resources. Reducing energy waste also reduces the amount of coal and natural gas
wisconsinbusinessvoice.org | Paid Advertisement
needed from other states. When utilities can invest less money in infrastructure and out-of-state fuel purchases, all utility customers save with lower energy costs. An independent evaluation of Focus on Energy’s 2016 programs found that every dollar invested returned $3 in benefits to Wisconsin. Contributions from 108 of Wisconsin’s electric and natural gas utilities have funded Focus on Energy throughout its 16-year history. Their innovative approach promotes in-state economic development, manages energy costs, and controls demand for electricity and natural gas through a portfolio of energy efficiency and renewable energy programs and incentives for businesses, farms, residents, local governments and schools. Cost effective at delivering significant energy savings with high customer satisfaction, Focus on Energy remains one of the nation’s most cost-effective programs of its type. Participants rated their overall satisfaction at nine on a 10-point scale according to a third party evaluator. As Wisconsin’s business landscape expands and modernizes, Focus on Energy stands ready to help employers remain competitive by controlling their costs and reducing energy waste. n To learn more about how you can utilize this Focus on Energy can assist you, call 800.762.7077 or visit www. focusonenergy.com.
W M C STA F F
Kurt Bauer President & CEO
Chevon Cook* WSC Training Manager
Kay Kertz Senior Director of Finance
Scott Manley Sr. Vice President of Government Relations
Barb Deans WSC Associate Director
Rich Laufenberg Employee Benefits Administrative Manager
Katie Yeutter Vice President of Operations and Finance Jaime Allen Accounting Assistant Mary Anderson Administrative Assistant
Kim Drake Communications and Marketing Coordinator Cory Fish Director of Tax, Transportation and Legal Affairs
Janet Metzger WSC Executive Director Nick Novak Director of Communications and Marketing Susan Nyffenegger Executive Assistant
David Bartscher Video Production Manager
Colton Haas Membership Development Manager
Stephanie Blumer* WSC Administrative Assistant
Ana Hamil* WSC Customer Relations Specialist
Nancy Boehnen Assistant to the President/ Board
Lara Hart Director of Technology
Amanda Pavalec Human Resources Manager
Kari Hofer WMC Foundation Executive Director
Jim Pugh WMC IMC VP & Treasurer, Senior Director of Advocacy and Membership
Russ Cain Director of Group Insurance Services
Jack Orton Director of Business World and Future Wisconsin Project Kyle Pankow Graphic Designer
Chris Reader Director of Health & Human Resources Policy Brittany Rockwell Director of Small Business Advocacy Leah Supensky Associate Director of Public Relations Lucas Vebber General Counsel and Director of Environmental & Energy Policy Mallory Wipperman Member Relations Coordinator
WMC Staff | wisconsinbusinessvoice.org
*not pictured
Winter 2018 43
More Than Just Numbers for Jeff French
J
eff French has been the National Managing Partner for Consumer and Industrial Products at Grant Thornton LLP since early 2014, and even though he is a CPA, he will tell you his, “favorite thing is not debits and credits.” French prefers to get out of the office and work directly with his clients. He would much rather spend a day on a manufacturing floor learning all the ins and outs of how a product is made or understanding his client's strategy than sitting behind his desk looking at spreadsheets. He got his start in accounting with Arthur Andersen in Dallas, Tex., where he worked for 15 years. French then became a partner at PricewaterhouseCoopers in 2002, before joining Baker Tilly Virchow
French with his daughter Hannah at the U.S. Open.
Krause in late 2003, when he relocated to Green Bay. After nearly eight years with Baker Tilly, French joined Grant Thornton as an Audit Partner in 2011. French earned his BBA in Accounting from TCU. When he is not in the office, French
HELPING WISCONSIN BUSINESSES
is active in numerous sports. He enjoys cycling, swimming, running and downhill skiing. Currently, he serves on the boards of the National Association of Manufacturers and Oneida Country Club. In the past, French has been a board member of the Boys & Girls Clubs of Green Bay and the Green Bay Chamber of Commerce. He’s also been involved with the Friends of St. Mary’s Hospital Foundation, Holy Family School and St. Anne’s Parish Finance Committee. Originally from Texas, French now lives in Green Bay with his wife, a Green Bay native, youngest son, who is a junior in high school, and their family dog. They also have a son who is studying at TCU and a daughter who works in the fashion industry in New York City. n
• Retain manufacturing jobs • Reduce energy waste • Remain globally competitive
“Wisconsin is open for business thanks to programs like Focus on Energy. Their technical expertise and financial incentives have reduced our energy costs, which greatly impacts our bottom line.” Jeff Landin, President Wisconsin Paper Council
focusonenergy.com/business 44 Winter 2018
wisconsinbusinessvoice.org | Executive Profile
WMC SEEN & HEARD
WMC’s Kurt Bauer recently toured the UW-Stevens Point Paper Science lab, which boasts the only paper making machine in Wisconsin designed for teaching the craft. UWSP also has one of the two Chemical Engineering degree programs offered by UW campuses; the other being UWMadison. Pictured from left to right are Bauer; Karyn Biasca, Professor, Chair and ABET Liaison, UW-SP Paper Science & Chemical Engineering Department; Jerry Lazarski, Executive Director, UW-SP Paper Science Foundation and Todd Kuckkahn, Executive Director, Portage County Business Council.
WMC Foundation Executive Director Kari Hofer highlights a Business World “Mini” Program on WSAW-TV, Wausau’s CBS affiliate.
WMC Senior Vice President of Government Relations Scott Manley discusses the need for worker’s compensation reform on the statewide public affairs show, Capital City Sunday. WMC Director of Health and Human Resources Policy Chris Reader discusses Wisconsin’s worker shortage and what WMC is doing to solve it on Wisconsin Public Television’s weekly show, Here and Now.
The National Association of Manufacturers (NAM) helped celebrate Manufacturing Month in October with a program held in Milwaukee. Pictured (from left to right) is Chris Mapes, chairman/CEO/president of Lincoln Electric, WMC’s Kurt Bauer; Mark Schwabero, chairman/CEO of Brunswick Corporation; Jay Timmons, NAM president/CEO; Nick Pinchuk, chairman/CEO of Snap-On Incorporated; and Tom Riordon, president/CEO of Neenah Enterprises.
Metropolitan Milwaukee Association of Commerce President & CEO Tim Sheehy (left), U.S. Sen. Ron Johnson (middle) and WMC President & CEO Kurt Bauer (right) at a recent event in Milwaukee discussing the importance of NAFTA to Wisconsin.
WMC Seen & Heard | wisconsinbusinessvoice.org
Winter 2018 45
Promoting Local Business for Over 300 Years By John Beckord Forward Janesville, Inc. President In the latter part of the 17th century, French traders banded together in Marseilles, France, to form what is widely thought to be the first chamber of commerce. The traders were motivated by the need for protection against enemies, the desire from rules to govern the conduct of trade and the realization they could influence legislation that impacted commerce. While King George III chartered the first chamber of commerce in North America in 1773, it would take another 145 years for the Commercial Club of Janesville Wisconsin to be founded in 1918. The precursor of the Janesville Chamber of Commerce, which later became Forward Janesville in the 1990’s, was formed by a handful of business leaders to organize an effort to convince General Motors to buy the
Beckord speaking at the Future Wisconsin Summit.
Samson Tractor factory. Just like today, business leaders were doing what they could to promote economic development. Even more tethered to today’s circumstances, those leaders 100 years ago were advocating for the construction of what would become Wisconsin’s most expensive new high school on the banks of the Rock River. Again, just like today, the business community was trying to demonstrate to employers that the community could produce an adequate supply of educated workers to meet the needs of a growing industrial base. CHAMBER FACT We are celebrating our 100th Janesville anniversary as a chamber of commerce in 2018 here at Forward Janesville. It is interestJanesville is known as the City of Parks ing to learn both how we have and hosted Wisconsin’s first State changed and how our mission Fair. Janesville is also home to House remains the same. We are still Speaker Paul Ryan. promoting economic development, workforce development and community enrichment. And just like those French traders who
46 Winter 2018
wisconsinbusinessvoice.org | Chamber Voice
banded together in the 18th century, we are still trying to influence legislation that impacts commerce. This is the intersection where WMC and local chambers have a core foundational element in common. In the 19th century local chambers of commerce were principally focused on matters directly related to the conduct of commerce, initiatives like protecting goods in transit and enforcing rules of trade. But eventually local business leaders came to a transforming realization: they’re own prosperity depended on the development of a prosperous community. Thus, economic development – in all its various forms – seeped into the DNA of most chambers of commerce. Whatever the real or perceived strength or weakness in a local economy, a chamber program has been designed to meet the need. The founding element of the chamber mission to “promote” remains at the core of a typical chamber of commerce today. And while the notion of protection no longer means working together to ward off bandits who held up goods in transit, chambers still have the important role of protecting businesses from excessive taxation and regulation. So, while the words mean different things in today’s world of commerce, we are still promoting and protecting after more than 300 years of service.n
NOMINATION DEADLINE: March 30, 2018
2018 NOMINATIONS NOW OPEN! If you are a family business in Wisconsin doing great things like creating jobs and supporting your community, we want to hear your story. The Wisconsin Family Business of the Year Awards highlight the accomplishments and contributions of family businesses making an impact on the Wisconsin business community. Nomination deadline is March 30, 2018. Winners will be announced on May 3, 2018 at the award banquet at Madison’s Monona Terrace Community and Convention Center. For more information and nomination forms:
familybusinessaward.com
2017 WINNERS
Smith & Gesteland
LLP
accountants & consultants
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