A group of organizations called the Wisconsin Way has released a report on the future of the state's business and economic climate and proposes solutions to create new jobs and balance the state's budget. While there are a number of excellent suggestions within the report about such as eliminating the state's corporate tax and reducing our reliance on property taxes, I think that too much of the report focuses on government and what it can do to create jobs.
It goes without saying that state and local governments have a role in economic development and job creation, but we must focus that role as secondary to that of entrepreneurs and employers. It may sound like a minor distinction, but throughout all of the bailout debates and discussion of how to stimulate the economy, too few people recognize that government cannot replace private enterprise as the creator of jobs and wealth.
The role of government must be streamlined and reduced to that of a referee, it should make sure that everyone is playing fairly and "by the rules," but it should not be in the business of picking winners and losers. The free market does that, not government. I realize to many it sounds harsh but businesses that are run poorly must fail and reorganize so that they can become competitive again.
Back to the Blueprint for Change, I do like a lot of their recommendations that focus on streamlining government, such as restricting the use of property taxes to those services actually tied to property or location and having the state contract with counties and municipalities for services rather than the blank check of shared revenues. If local governments contracted many of their services funded by shared revenue it could increase transparency and eliminate the duplication of services as each service would be itemized.
I do have some problems with the blueprint. I feel that too often it relies on incentives that target only specific, high-demand jobs and industries. While we certainly should encourage businesses to fill needed jobs, we should also be focused on creating a tax and regulatory system that is fair to all industries and encourages job creation in all sectors of the economy.
The blueprint also focuses a great deal on the brain drain Wisconsin is experiencing. We know that a lot of college graduates are leaving the state to find jobs, but how do we get them to stay? The Wisconsin Way suggests giving tuition breaks and tax credits to those who stay and work for 5 years after graduation. It's an interesting idea, but why not simply create a tax climate that is competitive with states that are attracting new grads? Again, if we follow the Wisconsin Way's blueprint it seems as though the state is picking the winners and losers - if you have the skills we want you get a deal, if not, well too bad.
There are suggestions within the Blueprint for Change that are worth a second look, and worth implementing, but I think it focuses too much on trying to pick and choose what sectors and industries should be here in Wisconsin. That is not the job of the government. We need to let businesses and entrepreneurs make those decisions and create a regulatory and tax system that encourages all sectors to grow.