Walker to continue development programs in next state budget

As part of his biennial budget proposal, Gov. Scott Walker has announced the proposed continuation and expansion of several economic development initiatives aimed at improving the business climate, promoting entrepreneurship, and fostering innovation.

The measures are designed to address some of Wisconsin’s long-term economic weaknesses, particularly the comparative lack of new business formation and the state’s inability to attract more capital investment. While the announcement does not include mention of a state-funded venture capital program, Walker said he is still weighing the design of such a program and whether to incorporate it in the state budget or consider it in a separate piece of legislation.

The programs he is committed to continuing and expanding exist across a number of government agencies, including the Wisconsin Economic Development Corp., the Wisconsin Department of Veterans Affairs, and the Wisconsin Department of Tourism.

"Continually improving our economic environment will foster small business growth and encourage the creation of new businesses," Walker said in a press release. "The majority of jobs created in Wisconsin will come from small businesses or employers who are just getting started. The initiatives contained in my budget proposal will support entrepreneurship and innovation."

Walker, who also has committed $29 million in additional funding for mental health services, wants the following economic development programs funded in his next budget:

Seed Accelerator and Capital Catalyst Programs: Through the WEDC, the state would commit nearly $6 million in Seed Accelerator and Capital Catalyst Programs for high-potential entrepreneurs and businesses.

Seed Accelerator Program: This program is aimed at increasing the number of start ups in the state by providing matching funds to communities and partners to establish business model programs to assist entrepreneurs in taking ideas to company formation. The local entrepreneurship programs provide mentorship, business planning, and networking with key contacts and potential investors.

Capital Catalyst Program: The CPP provides access to financing for entrepreneurs who have successfully completed an accelerator program. Through this program, the WEDC has already made investments with two local partners, including the Innovation Fund of Western Wisconsin in Eau Claire and the Whitewater Community Development Authority.

WEDC Marketing Program: Walker proposes $10.9 million over the biennium to support WEDC’s marketing program, which promotes Wisconsin as a great place to do business. The program concentrates on attracting businesses, promoting investment opportunities, and changing the negative perceptions that may still exist about doing business in Wisconsin.

VETransfer Grant: The state would allocate an additional $500,000 grant to VETransfer through the Department of Veterans Affairs’ Veterans Trust Fund. VETransfer is a business accelerator for veterans looking to start their own businesses.

Economic Development Tax Credit: An additional $75 million in available credits would be budgeted for the Economic Development Tax Credit Program. The tax credit encourages businesses to make capital investments, expand and retain jobs, invest in job training, and locate or retain their corporate headquarters in Wisconsin.

Angel Investment Tax Credit: Walker proposes to lift the cap on the tax credit program, also known as Act 255, focused on encouraging private investment in start-up companies. The new budget would remove the maximum cap, which is currently set at $47.5 million, but retains the annual limit, effectively allowing this program to continue into the future. The proposal to lift the cap drew praise from the Wisconsin Technology Council and its Wisconsin Angel Network program. The Tech Council felt the cap was at odds with the legislative intent to expand the program to $20 million per year and with the 2009 repeal of the statutory cap for fund-based investments. “This is welcome news for Wisconsin’s angel investor community and for the many emerging companies that grow through angel investment dollars,” said Tom Still, president of the Wisconsin Technology Council. “Retention of the cap was an oversight that diminished the programmatic certainty needed to ensure uninterrupted investment in Wisconsin companies.”

Department of Tourism: In 2011, tourism in Wisconsin had a $16 billion impact, an increase of 8% from 2010, as more than 95 million people visited the state, supporting 181,000 jobs and approximately $1.3 billion in state and local revenue. The Governor’s budget would expand the Department of Tourism’s marketing campaign by allowing the department to keep over $1 million in funds previously contained in a budget lapse. It also would implement a strategic marketing plan to grow international travel, and enable the department to use $100,000 each year to attract international visitors.

Grant Programs for National Meetings, Conventions, and Sporting Events: Walker would allocate $75,000 per year for grants to programs aimed at attracting national meetings, conventions, and sporting events.

The 2013-15 state budget will be formed over the next several months, with enactment due by June 30.