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Buying Loyalty

It’s a good thing that Gehl company has decided to stay and expand in West Bend.

Gehl will receive an incentives package worth $7 million to help with the expansion. The company, which makes construction and farming equipment, says it will retain 191 jobs and add another 87 over the next four years. Gehl has manufacturing operations in South Dakota; it closed a West Bend manufacturing plant in 2006.

[...]

One carrot offered to Gehl was the creation of a new four-year engineering program at UW-Washington County to funnel engineers to the company.

But let’s look at the larger picture.  The taxpayers are investing $25,180 per job that Gehl is committing to keeping in Wisconsin.  Furthermore, only 87 of those jobs are new.  The rest are just staying here.  So, the taxpayers are investing $80,460 per new job at Gehl. 

Why does it take this much to keep jobs in Wisconsin?  Why should the taxpayers have to shell out $80k+ for each new job?  Wouldn’t it make more sense to create a tax and legal climate where companies WANT to locate and expand in Wisconsin?  I sure think so. 

As for the engineering program at UWWC, why weren’t we already doing that?  Does it take the threat of a company leaving to get UW to respond?

As I see it, the taxpayers are having to pay Gehl $7 million to stay in Wisconsin because the State of Wisconsin can’t get its act together.  We shouldn’t have to pay businesses to operate here.  We should create a climate that attracts them.

Posted by Owen at 2208 hrs
Politics + Politics - Wisconsin

1. I look at the engineering program expansion as additional taxpayer cost as well. I believe the UW system already offers engineering degrees at many campuses. Is there a compelling reason to duplicate that at every one? There are also two other pretty good schools (MSOE and Marquette) only 40 miles away.

   The extension campuses, like UWWC, were intended to be a place for students to take care of two years of core curriculum classes while living at home to save money. The continued addition of courses, and degree programs, at these centers is only serving to expand the already bloated system. Sure it’s more convenient for some students, but at what yearly cost?

   All that said, the constant drumbeat for public subsidy is getting sickening…as are the Doyle photo-ops as he hands over our money with a smile.

   Posted by .(JavaScript must be enabled to view this email address) on August 26, 2007 at 2336 hrs
   
   
   

2. Why does it cost $7,000,000 to keep a couple hundred jobs in WI?  They need to to because of the sick WI economy.  I had to move to Nevada to figure that out.  In Nevada, they encourage businesses to either locate here or expand here.  Our school district just opened up 12 brand new schools and have 12,000 new students.  How about WI?  The parents aren’t coming here for the welfare, thats for sure.  We have no state income tax, less regulation and our property taxes are sooo much lower than WI.  Yes, we have casinos, but we have so much more including manufacturing, sales, professional and they are moving here instead of leaving.
   WI has so much potential- a stable work force, good schools, natural resources and for the most part, low crime.  About the only reason companies don’t move to WI is the business climate and government plays a huge role in that. 
   And what company would want to move here?  With the Dem’s in charge, they want to raise taxes, provide socialized medicine and increase regulation.  Yup, who would want to come here?

   Posted by .(JavaScript must be enabled to view this email address) on August 26, 2007 at 2339 hrs
   
   
   

3. That’s all well and good, but someone SERIOUSLY should look in to how they are paying their corporate taxes…I mean, we shouldn’t let Wal-Mart take the fall alone, right?

   <sarcasm mode off>

   Posted by Pete Fanning on August 27, 2007 at 0437 hrs
   
   
   

4. Wow, Owen - you must be gearing up for elected office.  Very careful use of the word “investing” instead of the word “spending.”  Politicians never spend, they always invest the taxpayer’s money. 

   So which is more futile, as judged by the free-market playbook - trying to “create a climate” or engaging in pork-payouts like this?  You think you can stick a finger in the equation and magically tilt the employment market for engineers, the cost of production in Wisconsin versus Illinois, SD, Alabama or China?  You won’t be happy until we’re the least-common-denominator on every measurement that some itchy company claims is the reason they need to leave Wisconsin?

   Look at their stock history, read their PR.  Think they’re broke, that they needed a $7M favor to stay afloat?  Good thing they have the money to buy the naming rights to that new club at Miller Park.  (Terms not disclosed.) How much will it take to keep them from leaving next time?

   Posted by John Foust on August 27, 2007 at 0841 hrs
   
   
   

5. In all fairness to the State of Wisconsin (which I admit to knowing next to nothing about), I think this whole thing has much more to do with a sense of corporate entitlement than it does with any perceived friendly climate in which to do business.

   Texas is supposedly one of the “friendliest” places for a corporation to do business. There’s no income tax, it’s a right-to-work state with lots of cheap labor, and one of the big uproars this last legislative session was over the fact that loopholes were removed that required some corporations that hadn’t payed taxes in years to actually pay some for a change.

   Yet Samsung wouldn’t come to Austin without tens of millions of dollars in property tax abatements. You’d think Samsung of all people would want the educated work force that the property tax pays for. It’s the same story all over the state; companies want cash payments and tax abatements for a set period of time, and at the end of that time, they go looking for the next municipality that will give them a better deal.

   The corporations play state against state and city against city to get the best deal for themselves. In some quarters, that’s called blackmail. In others, corporate welfare. In corporate America, business as usual.

   Posted by .(JavaScript must be enabled to view this email address) on August 27, 2007 at 1009 hrs
   
   
   

6. No, APC, here on B+S it’s called “creating a climate.” 

   Not to be confused with actually doing something to change the climate, which might be construed as Al Gore-ish.

   Posted by John Foust on August 27, 2007 at 1028 hrs
   
   
   

7. 1) Though the tax climate in Wisconsin is a legitamate separate issue, I doubt seriously that Gehl’s demands would have been different if Wisconsin’s tax climate were different…they simply wanted a hand-out, and they got it.
   2) UW-Washington County is a two-year campus.  The purpose of Wisconsin’s 13 two-year campuses is to allow students the opportunity to take core classes closer to home (and more affordably) before transferring to a four-year campus to earn their degree.  Creating a four-year engineering program at UW-Washington County is thus a waste of taxpayer money when so many quality four-year engineering programs are available in our state.  What’s next?  All Wisconsin two-year campuses are going to become defacto four-year campuses with massive increases in cost because some other companies demand four-year accounting, finance, human resource, mathematics, nursing, chemistry, etc. programs close to home?  Horrible, horrible precedent with massive cost implications.

   Posted by .(JavaScript must be enabled to view this email address) on August 27, 2007 at 1139 hrs
   
   
   

8. I’ll bet Gehl is spending more than a few dollars to sponsor their Indy car as well. Are we going to pay for that now, too?

   Posted by .(JavaScript must be enabled to view this email address) on August 27, 2007 at 1155 hrs
   
   
   

9. If they decided they wanted the biggest, flappy-est American flag in front of their building, I’m sure they could’ve gone for 8 or 9 million in subsidy.

   Posted by John Foust on August 27, 2007 at 1220 hrs
   
   
   

10. The purpose of Wisconsin’s 13 two-year campuses is to allow students the opportunity to take core classes closer to home (and more affordably) before transferring to a four-year campus to earn their degree.

    That certainly was the case when those campuses were built 40 years ago (Washington County opened in 1968).  Back then the typical student was a full-time student, got a 4-year degree, got a job somewhere, and then kept that job until retirement.  Since then, there are more “non-traditional” students.  Some students have to work full-time, and take classes part-time, and some have to continue their education to respond to changes in their current occupations, or are forced to make career changes.  They need to do this while working full-time and attending to family responsibilities. I don’t know the exact figures, but I know that the percentage of nontraditional students has grown since the campuses were established 40 years ago.  I suspect some of the expansion of programs at these local campuses is being driven by those changes.

    Not saying that expanding campus offerings in response to changing needs is right or wrong, I’m just offering a reason why things might be different than they were 40 years ago.

    Professor M Peterson, where are you today?  You give a more in-depth explanation of this.

    Posted by .(JavaScript must be enabled to view this email address) on August 27, 2007 at 1441 hrs
    
    
    

11. Hi folks,

    A day late. 

    I’ve been at administrivial meetings and preparing new classes this week at my “bloated and trough hugging” segment of the UW System—a part nonetheless buckling under increasing demand for baccalaureate programming.  Students are voting with their feet and their pocketbooks and, nation wide, people are starting off at feeder/satellite campuses before finishing their degrees.

    And Owen’s right—we already offer courses for an engineering degree program.  We’ve had people come through here on their way to Madison and Platteville for years.  This would simply expand the current offerings—something, incidentally, we couldn’t do unless there was, like, demand.??

    Which there is.  A lot.  As Tx suggested.

    We have student demand for a number of reasons, the most compelling market driven one is price.  We’re cheaper than anyone else in the state and our courses transfer seamlessly almost anywhere in the US… plus, students get real professors with real PhDs in relatively small classes.  They like that.  So do those of us who take the pay hit to teach here. :^)  [500 students in a lecture hall is a kind of rush but, after a while, snore… I thought about just putting myself on CD.  I moved here instead.]

    We have an increasing mission to non-traditional students—people coming back to school to improve their education so that they can move out of jobs headed for China and into jobs that will provide for them and their families.  For a lot of them the alternative, down the road, would be welfare.  They come through, pick up nursing or finance or IT and whump, their earning power climbs dramatically higher than machinist or welder—although maybe not diesel mechanic (my fall back!) or, of course, plumber. :^)

    And I’m not going to go back through the effects Ireland’s reinvestment in educational infrastructure had on their political-economy, tax profile, and trade surplus… but that model was partially involved in Gehl’s decision to bring nearly 32million a year to the local economy here.

    Best
    Mp

    Posted by Mpeterson on August 28, 2007 at 2325 hrs
    
    
    

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