Too bad Governor-elect Scott Walker was not in attendance to hear Mac Holladay address Madison-region leaders at Thrive’s annual meeting. (Thrive is the eight-county regional economic development effort paralleling Milwaukee 7.)
Holladay led successful state-level economic development efforts for Georgia, Mississippi and South Carolina. His firm, Market Street, has helped cities from Austin to Nashville to Sioux City successfully accelerate economic growth.
“It all starts with talent attraction,” Holladay shared in listing key economic development factors. Indeed, Site Selection’s annual survey of corporate real estate executives reveals that the No. 1 location factor is workforce skills.
This is why the Milwaukee-Madison (and eventually Minneapolis/St. Paul) train is the lowest hanging, juiciest economic development fruit within our reach.
It’s a once-in-a-lifetime-game changer that would dramatically and positively expand the size of our cities’ labor sheds as well as bring more people to our state to live, play, vacation, work and start a business.
If you reject my argument, here’s a different argument. Sit down with your CFO and do the cash flow math related to Walker’s decision:
- Cancel the train and Wisconsin is in the red for $14.25 million (cancelled contracts) plus $83.4 million (upgrades to Milwaukee line the state must now pay for which would have been financed by the federal government).
- What do we save by canceling the train? A $7.5 million annual state subsidy, according to Walker; $750,000 according the Wisconsin DOT.
- Without discounting and using Walker’s estimate, it will take 13 years before saving the subsidy works to Wisconsin’s benefit. Use the Wisconsin DOT estimate, and payback on canceling the train runs to 130 years.
- In other words, Walker’s refusal to accept federal funds for the train puts us in the red for at least seven years based solely on cash flow. If I added in the economic impact of the 415 jobs lost immediately and the 5,500 jobs that will never be created during the train’s construction and the economic impact of larger labor pools, Walker’s math never pays off.
The election is over. We got the “pro-business” guy into office. Do the math. Finally, think about how you’ll find a workforce to replace all your retiring skilled and professional workers.
Tell Walker to get on the jobs train. Otherwise, the rest of the Midwest is leaving the station without Wisconsin.
Kay Plantes is an MIT-trained economist, business strategy consultant, columnist and author. She served as chief economist for former Wisconsin Republican Gov. Lee Dreyfus. Plantes provides expertise in business model innovation, strategic leadership and smart economic policies. She resides in Madison, Wis., and Oslo, Norway.