Zac Schultz:

In June, you became the first governor in U.S. history to survive a recall election. Politically, a lot has happened since then. Does it feel like it was just six months ago?

Scott Walker:

In some ways, it seems like it was about 10 years ago. No, a lot has happened, a lot has moved on. Thankfully, a lot has happened in the state with things I think have calmed down. People have, you know, there’s all that pent up excitement, in the political spectrum and intensity. And I think that was a little bit in the November election, a lot of that’s moved on. People have gotten to a better place, and we’re in a position where we can work together and things going forward.

Zac Schultz:

You’ve been spending a lot of time since the November election working on the next budget. Will this be easier than your first budget?

Scott Walker:

Oh, I think there’s no doubt about it. I mean, there’ll still be some important reforms in there, but we tried to focus in on five areas: creating jobs, developing the workforce, doing more to transform education, continue to reform government, and then making some, hopefully, some strategic investments in infrastructure. It’s a lot easier than two years ago, because remember we had a $3.6 billion budget deficit at this time going into the next budget. Today, we’re looking at about half a billion dollars in total reserve, money in the rainy day fund, combined with the surplus. So it gives us a little bit more breathing room, I think a little bit easier to deal with.

Zac Schultz:

Sometimes having money means even bigger fights over where, how to allocate that.

Scott Walker:

It does, and that’s why we tried to lay out five priorities, so that everybody isn’t just think it was just this wild fight over this surplus out there We figured, and it’s not just the priorities themselves, but kind of, you know, a healthy balance between do you set some money aside for an investment fund, a lot of venture capital talk in the past. We think that makes some sense. We set some money aside for middle-class tax cuts to help drive small businesses and consumers, at the same time we try to keep property tax relief in check. Do we do more things to hone in on workforce development, particularly maybe additional investments in our technical colleges, in the areas where we have manufacturing, and healthcare, and information technology, and others, where we have a great need in the state. And certainly, you know, looking at long term, do we send a message to employers that we’re going to have a steady pipeline of skilled workers, professionals they need for their jobs by continuing to transform education in the state. All those are things where we can make investments, but our goal isn’t just handing out checks. It’s really, tie it to performance, showing that the money we invest actually leads to something positive.

Zac Schultz:

You’ve said in some of your Talks with Walker that cutting corporate tax may not be the best way to spur small businesses. You’d rather focus on individual income tax or property tax relief. But Assembly Speaker Robin Vos has said he would like to cut the corporate tax. Is that something that will get negotiated, or do those conversations happen before you even release the budget?

Scott Walker:

Well, we’re certainly talking to lawmakers. We’ve been talking, not only with the soon-to-be Speaker of the Assembly, but with the Senate Majority Leader, as well as I’ve been talking with Senator Larson and Representative Barca about things where we think many of these areas, there are issues that both parties can be interested in. You know, we’re going to put forward what we think are priorities. We’re going to consult the legislature. But in the end, we’re going to put forward a budget that’s based on what I’ve heard from the people across the state, and what we’re continuing to hear when we hold these Talk with Walker sessions. And you know, if along the way, the legislature wants to make some changes or tweaks, we’ll send out our hand and offer a chance to work with them. But we’re going to really try and drive it off of what we’re hearing from the public.

Zac Schultz:

The Wisconsin Economic Development Corporation has generated a lot of negative headlines recently. Does that need to be reformed, or does it just need better leadership in there?

Scott Walker:

I think it’s the leadership. It goes to the heart of that. Most of the things that were brought up recently in an audit that they’ve been working on for months on, are things that the current leadership has already either completely acted on, or is in the process of acting on. They were largely administrative things that, not even just things that weren’t completely converted when they made the transition, but things that they overlooked. And those are important. Those are significant. But give you a good example, they did not assign staff. The CFO, I think overlooked the fact that there weren’t staff assigned to try and collect on loans passed due under the WDC. But remember, these were loans not made by the WDC. These were loans that were made previously by the old Department of Commerce. All but one of them were made in the previous administration. So, it isn’t necessarily about bad loans. You know, it may seem odd for me to defend the prior administration, but in some of those cases, some of the companies they made loans to, may not have been credit worthy from a banking standpoint, but at the time may have been appropriate, if it actually saved, you know, say in a small rural area, an employer with 300-400, jobs, might have that significant impact on an entire region, not just community. There might have been some value on that. So one of the things we’re hoping, is not only to make corrections to make sure that there’s staff on top of that, but going forward, learning from what we find from things like these loans, as we look to the future, to engage WDC in helping companies, be it through a grant or loan, and other things like that, to create more jobs. We learn from what succeeded in the past, and hopefully make some adjustments. But one other thing I want to mention that I think is important, when Reed Hall, the interim director, the CEO of WDC came over and helped us out about two months ago, I visited with all the staff there that day as well, and we welcomed him. But I reminded, if you look at the vast majority of the people that work at WDC, all the way through from the vice presidents all the way down to the front-line representatives, the overwhelming response not only from the employers of the state, but from our regional economic development areas, from Thrive, to M7, to North, Midwest, and others, is that they love the new WDC. They love the cooperation they’ve had. They love the team efforts in bringing more jobs and expanding the number of jobs in this state. So the work they’re doing is highly effective. The oversight has been failing. The good news is these audits show that it’s being corrected.

Zac Schultz:

Talking about the budget. Will there be an expansion of School Choice next year? in the budget?

Scott Walker:

You know, we were aggressive this last time. The last budget we expanded it so that it included middle-class families in Milwaukee, expanded it to the city of Racine. It’s had positive results in both cases. Whether or not we expand it to other communities, whether to Green Bay or Kenosha, I think we’re going to try to figure out some way to measure the level of community support particularly parental support, because for a program like that to be successful, it’s got to have strong schools, and it’s got to have a strong parental base. And I’ve always been the opinion that to me, my objective is to make sure that every kid in this state has access to great education. It doesn’t matter what their zip code, what their parents’ background, what their parents do for a living. Every kid should have access to a world class education. What they do with it then is up to them. It should be equal opportunity, but not necessarily equal outcome. People should use that to the best of their ability and move forward. So, for the vast majority of our kids in the state it’s traditional public schools. Increasingly, for more and more kids, it’s charter schools. For some in the voucher program, it’s the choice schools, and even some of the virtual home schooling environments. All those are good, as long as we can continue to measure success and show parents and students which schools are succeeding and which ones are failing. We’re committed to doing that, and that will be part of the discussion about whether it gets broadened.

Zac Schultz:

Do you expect to see a bump for public schools in the budget?

Scott Walker:

I think a combination. I mean, certainly, I think overall having some sort of adjustment up to give them, account for inflation and other costs out there, at least some mechanism like that, makes some sense. But I’d also like to put a fair amount of the new money we have tied into a performance measure.

Zac Schultz:

You’ve said repeatedly you want to avoid controversial legislation next year, including Right to Work. But the voters in Michigan heard their governor talk the same sentences about avoiding controversy and Right to Work. Can you give assurances that you will not sign Right to Work in the next two years?

Scott Walker:

Well, two things that I think are different. One, you know, he said he didn’t have an interest in that. The unions I think overstepped themselves and put a ballot initiative, a referendum on the ballot last November, which kind of forced the issue. And the voters defeated it. They wanted something that would prop up and support the unions, particularly support collective bargaining and some other issues there, as well. Well, the voters rejected that. And so, one part of looking at that was Governor Snyder and others said, hey, the voters had their say. They clearly didn’t want to go down this path. Now we’re going to go down an alternative path. The other difference was in Michigan’s case, Governor Snyder pointed to the fact that in the past year, Indiana passed this legislation. They border Indiana. There was a real concern that he had about a competitive disadvantage. In our case, our competitors, one, we spend most of our time trying to grow businesses organically. We spend relatively little time trying to bring businesses in. Most of our focus is on growing businesses that are here. But to the extent that we do compete, it’s with Illinois, it’s with Minnesota. Neither of those states have nor are likely to have Right to Work legislation. Both of those have a business climate where, in Illinois’ case, income taxes went up 67%. Corporate or business taxes went up 46%. In Illinois’ case, they not only raised taxes, their budget is still a problem. They’ve got a pension system that’s the worst in the country. They’ve got a bond rating that’s the lowest out there. We are already a much better contrast to them, and since we lowered our tax burden, our pension system is fully funded. Our bond rating is strong, and called credit positive. We’re a great contrast today. We don’t need anything else like that. More importantly, when I talk to small businesses in particular this state, even if they like the concept of what passed in Michigan, what I hear overwhelmingly is, we just need some certainty. We just need to move forward. We don’t need any more chaos. What happened in the beginning of 2011, they said it was appropriate, it was right, and you had to do it to avoid things that would have otherwise driven down the economy, or pushed off the deficit to future generations. They liked what we did. But after a year and a half or almost now two years, where you had that dominated by protests and then recalls, and another round of recalls, they just want things calmed down, and that’s what we’re focusing on.

Zac Schultz:

All right. Thank you for your time.

Scott Walker:

Good to be with you.