Wisconsin offers business-friendly climate

Business climate

Wisconsin hasn’t been shy in its efforts to poach businesses from Illinois.

Weeks after he assumed office in 2011, Gov. Scott Walker revived the old state tourism slogan, “Escape to Wisconsin,” in an appeal to employers in Illinois. Seven years and several high-profile relocations later, Wisconsin’s eagerness to welcome companies relocating from south of the border is punctuated by pro-business policies and tax incentives at the state and local levels.

“We used to make regular outreach to Illinois and we could rarely even get our phone calls returned,” said Jim Paetsch, vice president of corporate relocation, expansion and attraction at the Milwaukee 7 regional economic development partnership. “Fast forward to 2018, I probably get four to five unsolicited calls from Illinois companies a month.”

Although Wisconsin competes with states like Indiana, Michigan and Iowa to recruit companies, Paetsch points to a few key factors that differentiate Wisconsin. For one, Wisconsin’s status as a right-to-work state separates it from neighboring Illinois and Minnesota, where unions remain relatively strong.

“When you’re talking about major labor investment in terms of payroll, big companies don’t like risk,” Paetsch said. “Right-to-work takes away some of that labor risk, which gets them a little more comfortable with the predictability of the environment that’s here.”

Tax incentives also help sweeten the deal for business owners, Paetsch said. The Wisconsin Economic Development Corp. is a public-private agency created by Walker in 2011 as part of his initiative to bring jobs to the state. The agency is responsible for administering tax credits, including the business development tax credit, which has been awarded to 79 companies in the two years since it was created. The credit is expected to create nearly 10,000 jobs and generate more than $900 million in capital investment, according to the WEDC. The agency also distributes the enterprise zone tax credit, a refundable credit available for businesses meeting certain requirements within designated enterprise zones.

Wisconsin’s 7.5 percent manufacturing and agriculture tax credit also reduces the corporate tax rate for entities in those industries to 0.4 percent, on top of an exemption for manufacturing equipment and machinery from the state’s personal property tax. A real-time market pricing program offered by We Energies helps reduce utility costs for large companies, and income tax cuts signed into law by Walker in 2013 have meant further savings for businesses.

“Wisconsin is known for its high-quality workforce, education system, quality of life and competitive tax climate, to name a few, and these are some of the reasons Foxconn is investing in one of the largest economic development projects in U.S. history here in Wisconsin,” said Amy Hasenberg, Walker press secretary, in an email.

Foxconn Technology Group made a splash when the company announced in 2017 that it would invest $10 billion to create up to 13,000 jobs at a plant in Mount Pleasant. The state is providing a $3 billion incentive for Foxconn. The move also put southeastern Wisconsin on the radar of business owners both in Illinois and further afield.

“Foxconn is not the be-all-end-all, but it’s a beacon to let everybody know what a few companies have realized and an awful lot more are starting to get,” said Wisconsin Assembly Speaker Robin Vos.

Walker also recently announced the formation of the Wisconsin Career Creator, a $20 million initiative that will support workforce development for electronics manufacturing jobs in conjunction with colleges and universities across the state.

In addition to a well-equipped workforce, Wisconsin’s financial stability is attractive to out-of-state business owners, Vos said. The state’s fully-funded pension program is a plus for Wisconsin, particularly in the eyes of business owners who are disillusioned with state pension and budget woes in Illinois.

“One of the biggest advantages Wisconsin has going is that we’re next to Illinois,” Vos said. “They’re so dysfunctional, any (business owner) who is reasonable will say Wisconsin is the obvious choice.”

Beyond statewide initiatives, Paetsch credits border towns in Kenosha and Racine counties for further incentivizing businesses to move north. Companies including Kenall Manufacturing Co., Colbert Flexographic Packaging Corp., Toolamation Services Inc., FNA Group Inc. and Vonco Products LLC have relocated from Illinois to Kenosha County in recent years, bringing new jobs to the region in their wake.

The Kenosha Area Business Alliance has been heavily involved in working to attract companies to Kenosha County. In Racine County, the Racine County Economic Development Corp. fills that role.

“(Kenosha and Racine) are really aggressive on the incentive side. They’re not bashful about deploying TIF when they see the benefits of having those companies in their counties,” Paetsch said. “They’re much more willing to look at putting money into the right deals to secure them in real time.”

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