Heading into the most challenging re-election race of his 25-year political career, Gov. Scott Walker sought to win working voters Wednesday by proposing a $100 per child tax credit and investments in schools and health care.
In his eighth state of the state address in the Assembly chamber, Walker spoke for more than an hour and called for the $122 million a year child tax credit that would be paid to parents even if they have no state income tax liability. It’s another step by Walker to rally fellow Republicans and move to the middle after the party’s recent loss in a Senate special election.
The credit would be paid for by using the state’s expected budget surplus, which was projected last month to come in $138 million better than previously thought.
“As promised, when we have a surplus, we will give it back to you, the hard-working taxpayers,” said Walker, who was joined on the rostrum by children and their parents. “You see, this is your reform dividend. You deserve it.”
Over the two-year budget, the tax credit as proposed by the governor would be paid out twice and cost about $244 million. Without the credit, the state is currently expected to end the current budget in June 2019 with $385 million in its main account.
If lawmakers approve the credit and other recent proposals by Walker, the state would be left with a budget cushion of less than $100 million—an amount that the state can run through in a matter of days.
Assembly Minority Leader Gordon Hintz, D-Oshkosh, said that he would need to review the child credit but that as a candidate Walker was too late in making his proposals.
“It sounded more like a going-out-of-business sale,” Hintz said of the speech. “After seven years, the governor is finally taking up some of these proposals in desperation because he knows he’s in the political fight of his life.”
Senate Majority Leader Scott Fitzgerald, R-Juneau, said he supported the child tax credit but wasn’t sure if other GOP senators would. Assembly Speaker Robin Vos, R-Rochester, said he backed a tax cut but stopped short of endorsing the child credit.
“I support the idea of sending the money back to the citizens who overpaid it,” Vos said.
This spring, the per child credit would be paid in the form of a sales tax rebate that parents would have to claim separately from the filing of their regular income tax return. The credit would be paid out for any child younger than 18 as of Dec. 31, 2017—about 671,000 families with 1.22 million children are expected to qualify.
Next year, the program would become an income tax credit that parents would claim on their regular state tax return.
Senate Minority Leader Jennifer Shilling, D-La Crosse, said Walker couldn’t erase his record.
“Every time we drive over a pothole or cast a ballot for a school referendum, voters see the underfunding of our roads and local schools. As other states have rebounded from the Great Recession, Republican policies have shrunk Wisconsin’s middle class, shifted more costs onto working families and created an 111,000 jobs deficit,” Shilling said, referring to a finding by the left-leaning group Center for American Progress that Wisconsin lagged in job creation.
Walker, 50, served nearly nine years in the Assembly and almost eight as Milwaukee County executive. He went on to win three campaigns for governor, including the 2012 recall.
The governor can tout a 3 percent unemployment rate in Wisconsin—a tie for the record low, which was last reached in the summer of 1999. He can point to a six-year freeze on in-state tuition in the UW System, property taxes below 2010 levels on the typical home and the up to 13,000 jobs that Foxconn Technology Group says it’s bringing to Racine County.
But he also has a field of nine Democratic challengers who are criticizing his record on education and questioning the up to $4 billion in public money for Foxconn’s flat-screen plant.
To help bridge a $3 billion budget shortfall in 2011, Walker and lawmakers cut state aid to schools but also cleared the way for cuts to teachers’ benefits to make up for that.
Since then, Walker has increased education funding and state aid to schools in this budget is just over $700 million higher than it was at its previous peak in the 2007-09 budget. But the school aid hasn’t kept pace with inflation over that period and now accounts for about 33 percent of overall spending from the state’s main account, down from 38 percent a decade ago.
Walker also proposed Wednesday:
When viewers visit Evansville’s website, a photo of a children’s softball game scrolls by with the banner “best city for young families in Wisconsin.”
Nerdwallet, an online financial guidance service, dubbed the city the best for young families in 2015.
A new study by UW-Madison shows the reputation still stands.
The study examined 12 small to mid-size Wisconsin municipalities bucking a national trend of young people leaving rural areas for urban communities.
Evansville and Delavan were among municipalities that showed unusually large percentages of young adult residents compared to the rest of the state.
Municipalities studied include Delavan, West Bend, Omro, De Pere, Black Creek, Plover, Hayward, Somerset, New Richmond, Onalaska, Brooklyn and Evansville.
Results from the study reflect population trends in Rock County.
Evansville remains the fastest-growing community in Rock County, based on 2017 population estimates from the Wisconsin Department of Administration.
Evansville saw 48 more people, a 0.92 percent increase, in 2017 than the year before, according to the data. That was the largest growth of all municipalities in the county.
The population of young adults grew 40 percent in Evansville in a decade, according to the study.
The median state measure for young adult population is a decrease of 22 percent.
“It’s the perfect location for young folks raising a family,” said an Evansville resident quoted in the study.
In a span of 30 years, young adults on average made up 30 percent of Evansville’s population, according to the survey. This measure shows Evansville’s unusually high rate of retaining young people.
The state’s median rate of maintaining young adults is 24 percent.
Participants in the Evansville study said low housing costs, a strong school district and proximity to Madison and Janesville were the most attractive features for the city.
“... I love it here. It’s really friendly, and not everyone is into the small town thing, but its homey. I feel safe here. I walk around a lot at night by myself,” a participant said.
A number of participants said they want to see more racial and ethnic diversity.
The study showed 93.3 percent of the population identified as white.
Participants wanted more business and retail options, specifically citing Kwik Trip as being in high demand.
City Administrator Ian Rigg said he thinks the study was a fair evaluation of the city.
The city has worked to eliminate barriers for economic development to attract new business, Rigg said.
There aren’t many cons to attracting a young population, Rigg said. As long as a municipality is smart with planning, population growth is always a benefit.
Despite a loss in overall population since 2010, the young adult population in Delavan grew 23 percent in a decade, according to the study.
Of the 12 communities in the study, Delavan was the most racially and ethnically diverse.
The study showed the community was 67.2 percent white, 14.1 percent Hispanic, 12.7 percent other, 2.6 percent two or more races, 1.7 percent African-American and 1 percent Asian.
Diversity was one of the strongest features noted by Delavan participants. Many acknowledged integration of the Hispanic and deaf communities into the city.
The dual language program in the Delavan-Darien School District and the Wisconsin School for the Deaf offer educational opportunities that participants felt benefited the community.
Proximity to Janesville; Rockford, Illinois; Chicago; and Milwaukee was considered an attractive feature as well.
Demand for more local business and a farmers market were indicated by participants.
Participants were split on their opinions of population growth.
“I don’t want my town to grow. I want my town to stay small. I want it stay just the way it is, but maybe have a little bit more resources for the people who are already here,” a participant said. The participant continued to say he or she did not want “outsiders” coming in.
Others thought population growth is positive.
“Population growth affecting my community is unbelievably positive. Being a small town, having the flow of people come through is important for our economy,” a participant said.
Janesville’s unemployment rate has dropped to its lowest level on record, dipping to 2.7 percent in December, according to U.S. Bureau of Labor statistics data.
In a news release Wednesday, the state Department of Workforce Development trumpeted Janesville and Rock County’s unemployment rate as being “a new low for any month on current record.” Janesville’s unemployment rate dipped from 2.9 percent to 2.7 percent between November and December 2017.
The overall unemployment rate for Rock County hovered around 3 percent for much of the last year—a number not seen since the late 1990s—but the jobless rate slid to 2.8 percent in December, which is a record for the county, the agency said.
The Rock County and Janesville jobless rates are “preliminary” and not seasonally adjusted, the agency said, but the drop in those rates occurred alongside a state unemployment rate of around 3 percent to close out 2017.
That’s a record, the agency said. Overall, Wisconsin recorded the fifth-best decline in unemployment and the fifth-highest labor force participation rate in the country at 68.9 percent, the agency said.
The Department of Workforce Development said it uses data that have been collected on unemployment rates since 1990. Since then, unemployment rates in Janesville have never been as low as they were last year, the agency said.
Locally, it’s a sign the economy has made a dramatic recovery since the Great Recession, which included the 2009 idling of the General Motors plant.
In the fourth quarter of 2010, for instance, unemployment was 9.9 percent in Janesville, among the highest rates in the state, according to federal data.
Russ Kashian, an economist at UW-Whitewater, said the news of record low unemployment in Rock County is “wonderful,” a stark difference from nearly a decade ago.
Kashian remembers how some people were ringing the “death toll” for Rock County.
“Obviously, that didn’t happen,” he said. “This is a totally different conversation with the Janesville area than the conversations you had 10 years ago.”
But along with economic improvement and historic low unemployment has come a shrinking local labor pool. That’s a reality many local economic development and jobs officials have said is putting a strain on employers, who are trying to find workers with the skills they need.
Kashian said a labor shortage is a smaller problem than a rampant job shortage, but it’s a concern in Rock County.
“The labor supply is constricted, and employers are having trouble with that,” he said. “There’s little opportunity for the industries to find a reasonably deep pool of workers.”
The unemployment rate hovers around 2 percent in Dane County, an area that typically has lower unemployment than the rest of the state. It’s historically unusual for Janesville’s rate to nearly mirror Dane County’s.
It might be a good problem to have, Kashian said, but over the short haul, a tight labor market could keep some companies from aggressively expanding or even give new companies pause about locating in the region.
Kashian said some existing industries could turn to “innovations” that make them less reliant on beefing up employee headcounts. But he said it is becoming crucial for companies and officials to find ways to grow a local workforce from within and from without.
“The only way you’re going to grow now is to retain the people you have or to attract people to relocate to Rock County,” he said.
The Wisconsin Economic Development Corporation earlier this month launched a talent recruitment ad campaign that will target UW System graduates who’ve gone to other states to work, as well as military veterans.
Initially, the state’s economic development group said it will use the ad campaign to try to woo young workers from the Chicago area to Wisconsin.
That could help Rock County at a time when job seekers are scarce.
The New York Times reported this month that in Dane County, Stoughton Trailers is hiring more workers through the state prison system’s work-release program to fill ranks in production that otherwise would go unfilled.
Tristan Cook, a state Department of Corrections official, told The Gazette last week he was unaware of any major Rock County employers making the same use of the state prison’s work-release program.
One local employer, metal manufacturer United Alloy, said last week that demand for its products is booming. The company is expanding its plant this year, and it anticipates adding at least 50 more employees to the 190 it already employs, including production workers and engineers.
The company told The Gazette it has had to lean harder on temporary hires through local staffing agencies to fill its ranks. It has even recruited workers during happy hours at local taverns, among other methods, offering second- and third-shift premium pay as high as $21 to $23 an hour for entry-level jobs.
That kind of pay competes directly with Dane County employers, such as the Sub-Zero refrigeration plant in Fitchburg, which local Facebook jobs postings and newspaper advertisements showed was actively hiring assemblers and offering entry-level pay of $19 to $20 per hour.
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