Thursday, May 19, 2011

Trash Talking - Governor Walker's in Illinois' Face. Boo-yah!

Governor Walker, branding fanatic, erecting an "Open For Business" sign at the Illinois border.

Ever since the Republicans in the legislature's special session early this year passed a number of tax breaks (and tort reform measures) with the goal of letting the Governor stand in front of the Capitol with his "Open for Business" sign (well prior to the announcement of the Budget Repair Bill, which would have made staging the event more than a little iffy), the Governor has done all he can to rankle the folks down in Illinois for not having the good judgment he has had to encourage business development.

I posted yesterday about Governor Walker using the Chief Executive Magazine's "Best States for Business" poll results to crow over Wisconsin's dramatic climb in the poll, and what he later agreed to on "Fox and Friends" was Illinois' supposed "death spiral" in terms of attracting new and keeping existing companies. (I described why I felt he couldn't really claim that his "hard choices" in recent legislation had been recognized by the CEO's surveyed in the Chief Executive poll, since the survey was concluded two weeks before he made his "hard choices."  But hey, that's what good politicians do, cut ribbons and claim undue credit for market forces they don't understand.)

The competitive juices have flowed beyond simply dissing Illinois on national cable news over the CEO poll.  Jack Schultz at NBC News15's blog described what happened shortly after Illinois elected to address its own budget problems by raising taxes:
Since his election, Governor Scott Walker has stuck to his core economic theme - Wisconsin is Open For Business. Wednesday he got an assist from the Illinois state legislature when they voted to increase personal and corporate income taxes.
"We dug up a slogan from the past, Escape To Wisconsin, which was the tourist slogan back in the '80's and we've adapted it as the message we're very clearly sending to employers in the state of Illinois," says Walker.
Walker was all over Chicago radio and TV Wednesday, and plans to visit Illinois businesses to show them the different direction the states are heading. "We're looking to cut taxes and reduce the overall tax burden on individuals and employers long term."
But the sell may not be so easy. For one, even with the increase, Wisconsin taxes are still higher.
Second, UW Economics Professor Andrew Reschovsky says taxes are only one factor in where a company sets up shop. "There are lots of other things that are much more important." Reschovsky says supply networks, labor costs and utility costs are all factors. "On the margin, some businesses may choose to move to Wisconsin who wouldn't otherwise move."
Walker says he's already heard from some companies. "Yesterday we already had some businesses contacting us and the Department of Commerce. I assume the more we get this message out, the better off it's going to be in our efforts to try and attract more jobs from the state of Illinois."
But Reschovsky doesn't think this will lead to a flood of companies moving north. "The question is, are there going to be many of those? I don't think there are going to be very many." 
Governor Walker (and Jeff Fitzgerald) also had an Op-Ed piece in the Chicago Tribune where he called Illinois Governor Quinn out by name:
Wisconsin and Illinois are two very different states (and we are not just talking about Green Bay Packers and Chicago Bears fans).
In Springfield, Gov. Pat Quinn and lawmakers approved massive tax increases on individuals and employers. They put off difficult decisions, like reining in public-sector benefits and reducing the growth of government, for another day. 
While Illinois legislators may call those tax increases temporary, the reality is that by avoiding the hard decisions now, they are creating larger budget problems for the future. Illinois leaders have made it clear that they do not have the will to solve the state's budget problems except through greater tax increases.
Tuesday, on the road signs along our state borders, we unveiled a different message aimed squarely at our neighbors. In place of the name of our state's governor, the signs announce that Wisconsin is "Open for Business." 

Let me say I am a little uncomfortable about the Governor's continuing to trash-talk to Illinois, since its economy is pretty huge compared to ours.  I would guess that with the increased revenue the State of Illinois is going to be receiving by raising its taxes to a new level that is still lower than Wisconsin's, it can afford to offer some pretty nice incentives to have Wisconsin businesses move south.  It puts me in mind of what Admiral Yamamoto gloomily said after pulling off the attack on Pearl Harbor.  While all his subordinates were slapping one another on the back, and swilling those little cups of sake, his response to news of his success against the U.S. Pacific fleet was to moan:  "Now we have awakened a sleeping giant."

There is another problem with all the effort that Wisconsin may put into getting Illinois business owners to begin thinking about relocating over small differences in taxes and small relocation incentives.   Indiana is: (a) just as close to Illinois as we are, (b) has substantially lower taxes than Wisconsin, (c) is considering a right-to-work law,  (d) has been under consistent Republican control for many more years than Wisconsin, and (e) doesn't have massive recall efforts underway that may completely shift the current political landscape in the next eight to ten months.  I hope we don't end up just carrying Indiana's water.

1 comment:

  1. Kim: Enjoy reading this stuff, but have you considered approaching one of our local newspapers to publish this occasionally? What a great letter to the editor. Just saying.