Elections and jobs

Chris Wodke
http://www.summittrainingpublications.com/

Another reprint of an article I wrote after last year’s election.  We want to keep in mind the consequences of elections as the recall efforts against Governor Walker and other Republicans continue.

 Illinois voters elected Pat Quinn as Governor at the same time Wisconsin voters elected Scott Walker. That’s about all these two have in common beside a state border.

Democrat Quinn chose to raise taxes to balance the Illinois budget.   Walker has taken the route of cutting spending and holding the line on taxes to create a business friendly environment. Quinn doubled the corporate income tax in addition to raising personal income taxes. The business tax rate increased from 4.8 percent to 7 percent. Personal income tax rates went from 3 percent to 5 percent.

That decision  may cost 23,000 jobs as Caterpillar tells Quinn the tax hike may drive it from Illinois. In a story reported by the AP and by Chicago Business Caterpillar details its concerns about the unfavorable business climate in Illinois.  Doug Oberhelman, CEO of Caterpillar wrote a letter to Governor Quinn  on March 21^st.  In the letter he stated “I want to stay here, But as the leader of this business, I have to do what’s right for Caterpillar when making decisions about where to invest”.

Oberhelman went on to say he wanted to work with Quinn to change the business climate. Caterpillar has ties to Wisconsin. Late last year Caterpillar announced they were acquiring Bucyrus International of South Milwaukee. So jobs in Wisconsin may be at stake because of decisions made in Illinois.  Quinn took the route of raising taxes instead of taking on the unions like Scott Walker here in Wisconsin.

We all need to realize organizations like Caterpillar exist to make money. The tax increase in Illinois will cost Caterpillar about $40 million dollars.  

Four states have already reached out to try and lure Caterpillar from Illinois. Oberhelman has disclosed he has been contacted by governors from South Dakota, Nebraska, Texas and Virginia.  Caterpillar recently expanded by building plants in Texas and North Carolina. If we want to keep jobs in Wisconsin we must keep taxes low and create a business friendly environment. If we don’t we will lose jobs to states that do.

States must make the tough decisions to lower spending and balance budgets. Businesses and private citizens cannot afford more increases. Lowering costs means solving high labor and benefit costs. These are the major component of spending in any state budget. Illinois chose to ignore that they have one of the largest unfunded pension plans. Walker took the tough route, suggesting modest increases in pension and healthcare payments by state workers. The changes in collective bargaining are needed to insure these changes are permanent.

Business will simply pick up and move to states that have lower taxes and a better business climate.  The 23,000 employees cannot afford to be lost.

Our recent Wisconsin Supreme Court race was billed as a referendum on the Walker program.  The race is still too close to call.  Will we have a liberal justice that will thwart every reform effort?  Will we have a justice that kills every attempt to make Wisconsin business friendly?  We will have to wait to see which justice takes their seat on the court. Let’s hope it is a justice that will rule impartially and not on party lines. Walker was elected by a majority of Wisconsin voters.  Let’s hope his programs get a chance to create a business friendly environment for Wisconsin. We need the companies and we need the jobs.

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