Frederica Freyberg:

But first, a day after Governor Walker signed his $541 million tax cut into law in Green Bay this week, Democratic challenger, Mary Burke, rolled out her own plan for putting Wisconsinites back to work called “Invest for Success.” I sat down with her following its release and started by asking why her plan will work while she says Scott Walker’s has not.

Mary Burke:

It’s a matter of the time put into it. And I approach it from a business person’s perspective. At Trek Bicycle, where I was an executive, you know, I saw how we actually increased sales. And that experience I have brought to this business plan. So over the last five months I’ve had a lot of conversations with folks, economic development, CEOs, educators, experts in these fields. And I made sure that the plan that I put together is one that really provides the type of roadmap for how we will jump-start Wisconsin’s economy. We are lagging the rest of the country. We are lagging every other state around us in the Midwest. Out of ten Midwestern states we’re ninth in job growth. So we need a plan that is serious about specific strategies and tactics that are going to move Wisconsin forward. Frankly, what Governor Walker put out when he was running for governor did not have that type of thought and strategic and tactical approach to things. It was four pages. In fact, I bring it here today. This is it, four pages. It didn’t outline exactly how we were going to move the economy forward, and it shows in the results. You know, nowhere close to the 250,000 jobs promise that he made to the people of Wisconsin.

Frederica Freyberg:

So you reference Scott Walker’s four-page job plan when he ran in 2010 against Tom Barrett. Tom Barrett, for his part, had a 68-page jobs plan. Yours is about 40, or something like that?

Mary Burke:

About 40, yeah.

Frederica Freyberg:

And yet, look at how that race turned out. So is it about the length of the plan, or what is it about?

Mary Burke:

Well, I think it’s about the voters’ confidence in the gubernatorial candidates to actually deliver on what they promise. And, as I said, I approach this as a business person. And I think that this plan reflects that thinking. And they are really good strategies and tactics that I have consulted with experts and business people in the state as to what will really grow our economy. So it is a different approach. The five key strategies that I have in there, first and foremost is we have to align our economic development efforts around our key industry clusters, build on the success and the foundations we have, but also make sure we are supporting emerging industries. Second is around work force. My plan notes that we have to create, in Wisconsin 670,000 new degreed holders in the state by 2025 to compete for the jobs of the future. 670,000 is a lot. Now, that could be a certificate, or an associate’s degree, but it is post-high school degree. So we have to make sure investing in education is investing in jobs. And laying out how we do that, starting with redefining our high schools.

Frederica Freyberg:

In fact, you talk about this idea of kind of skills training with high schoolers beginning, even before they graduate, to know kind of what they want to do. How is that different from the kind of money that this administration has put toward vocational skills training to kind of try to meet the needs of the employers?

Mary Burke:

Well, we have seen just recently that Governor Walker has put more money into it. But that’s actually after he cut our technical colleges and our skills training. So that does not even make up for the cuts. So this is making sure that we set priorities. As governor I want to set that worker training and education is a priority. It means making tough budget decisions about where you are going to spend the money. I’m committed to holding the line on taxes. But I learned at Trek that if you want to grow sales and grow your profitability, you have to make investments. We did that when I– the division that I ran, where we increased sales in Europe from $3 million to $50 million. That required investment. So we need to take the same approach in the state, invest where we can grow, make sure we have the accountability measures and the metrics to make sure we’re headed on the right path, and be able to make those corrections if we’re not moving in that direction.

Frederica Freyberg:

As long as we’re talking about investments, I’ll jump off there and ask you about venture capital investments. You want to take that from $25 million to $125– $120 million over four years, saying– you say, that what we’re doing now is kind of not moving the needle on jobs. But where does the state money come from to put in that kind of money into venture capital?

Mary Burke:

Well, that would be a little– It would be less than $30 million a year additional money on top of it. So we– I would set priorities. I would look through every single line of our state budget. You know, it’s a $70 billion budget over two years. It means making tough choices, it means finding savings in other programs. But this is absolutely necessary. I want to be clear. This venture capital money is money that we get back. These are investments that you are actually investing side by side with private investors. They expect a return on their money. We should expect a return as well. So as that money gets paid back, we’ll be able to invest it in other Wisconsin growth opportunities. So this is investment that will pay off, make sure we’re not only creating jobs, but that we are getting that money back with a return on our investment.

Frederica Freyberg:

You talk about industry clusters or clusters of opportunity. How is that a different approach from what we might be doing now?

Mary Burke:

Well, there– We talk about that approach now, but actually you don’t see a lot of it being done. This says we’re going to align all of our public policy around– with work force development, some of our infrastructure projects, certainly around regulation, to be looking at how we support industry clusters. So it gets beyond just our economic development efforts, but also in terms of our public policy. So if you have an industry cluster, say around– you know, here in Madison area, we obviously have information technology, is a growing area. So we would work with firms in information technology, not only in Madison, but across the state, and say, what are the barriers that you’re finding to growing the industry, to exporting more of your goods and services abroad, to seeing new entrepreneurs get started in this area, what might there be in terms of bureaucracy and red tape that is standing in the way, looking at all of those issues, working with industry to identify them. Planning their work force needs. I hear that all the time from industry people as to whether they have the work force and the people that they hire to be successful and grow their businesses. So I have said in my plan, I’m going to assign an economist to each one of the clusters to forecast work force needs, then make sure that we’re working with our technical colleges, our universities, to have that work force available.

Frederica Freyberg:

Would you stick with the Wisconsin Economic Development Corporation or would you revert back to Commerce as an agency?

Mary Burke:

No. I would probably stick with WEDC. It’s been terribly mismanaged from the start. They lost track of taxpayers’ money that was loaned to companies and didn’t even follow up on whether those jobs were being created, whether that money was being paid back. You then have had turnover in top management there. And then on top of that, the latest news is that they’re not even using all of the funds that are appropriated to them, at the same time that I hear from small businesses across the state that they don’t have the capital in order to expand. But my feelings is the function, that’s more important than the form. It means you have to well manage the organization. And I would do that as governor. The governor is head of the WEDC. Walker needs to take responsibility for what has happened under WEDC in the three years that it’s been there. As governor, I would make sure that we’re managing that organization well.

Frederica Freyberg:

And yet in fairness, when you were commerce secretary, there was a 2006 state audit that suggested some of the same kinds of problems with tracking some of the money that was going out the door being given to create jobs. So how do you respond to that?

Mary Burke:

Well, that audit, which was released in– early 2006, covered a period of something like from 2002 into 2005 and ’06. I started at commerce in 2005. We took a lot of those recommendations and made sure that we did put in place those tracking mechanisms. But most of the deals that were cited under those were ones that did not happen when I was commerce secretary. But certainly took those recommendations to heart and made sure that we made any changes that were needed to track that money.

Frederica Freyberg:

Another matter you talk about is Wisconsin taking as many of the federal dollars back from Washington as it can, including taking the expanded Medicaid money for Wisconsin. But what about the danger of kind of initial federal dollars drying up and leaving the state holding the bag, which is Governor Walker’s concern, specifically with Medicaid?

Mary Burke:

Well, this is hundreds of millions of dollars that is Wisconsin taxpayer money that goes to Washington. As governor, I will fight to get as much of that support and money back into the state. But this money is committed to pay for 100% of the cost for the first three years of the program and then 90% therefore. So that’s a great deal. I mean, 100% and then at least 90% after that. I think we take a lot of federal money and support, as we should. That doesn’t necessarily say it’s going to be there for the long term. This is making health care– It would make health care more affordable here, more accessible in Wisconsin, and there’s no reason to turn down that money other than to just score political points.

Frederica Freyberg:

You talk in your plan as well about increasing exports and there’s a line in there that I want to quote. You say, Off-shoring American manufacturing jobs to other localities is labor is cheaper has been the dismal trend for over 30 years. We talked about this the last time you were on our air. We talked about how Trek Bicycles outsourced to China. You made bicycles in China. So how do you reconcile what you’re saying in your jobs plan about this being a dismal record with what your own company did?

Mary Burke:

Well, the United States and in Wisconsin we have seen it be very difficult for Wisconsin manufacturers and US manufacturers to be able to compete with very low-wage countries. The United States lost 31% of its manufacturing jobs since 2000. Wisconsin has lost a quarter of our manufacturing jobs. So as governor, I am going to fight to see if it is the right time to be able to compete effectively by bringing those jobs back. Things have changed. Fuel costs have increased, so the transportation costs to come from China, costs more to bring it to the US. More and more manufacturers want to be closer to their customers and be able to meet their demands on very short time frames. That benefits companies that have manufacturing in the US. And so Trek manufactures more bicycles in Wisconsin and in the US than any other company. But it is an extremely competitive industry, and none of Trek’s major competitors even produce one bike here in the United States. So Trek does what it can. But I hope the climate around the economics around US manufacturing versus overseas manufacturing have changed so that companies like Trek can find it profitable to bring some of those jobs back. And as governor, I would be encouraging them to do so.

Frederica Freyberg:

You say that we should hold the line on taxes, and yet I think I’m right that you said that you didn’t agree with Governor Scott Walker signing into law the tax breaks that he just did this week. So what is your version of holding the line on taxes?

Mary Burke:

Sure. Well, what Governor Walker did was irresponsible, because he is spending money, he’s giving tax breaks on money, we don’t have yet. This is a projected surplus that we won’t know until June of 2015 whether it exists or not. So this is going out and spending money we don’t have. The other thing is is part of the surplus has been generated because we’ve run up debt. Walker has added $1.2 billion of debt over this same period of time. And we now enter the next budget biennium with a $800 million deficit. So that’s why I say– I call it irresponsible. It’s basically spending money we don’t have after we have already borrowed a lot of money, and we have big transportation projects that we are not knowing how we’re going to fund. So as governor, when I say hold the line on taxes, making sure that we are not increasing our tax rates. And that’s important. We have to be competitive as a state in terms of both our business taxes, our corporate taxes and our individual taxes. But we have to look at the totality of it, property taxes, income taxes, our sales taxes are significantly lower than other states, and the fees that we charge for like motor vehicle registration. So when I say, hold the line on taxes, I’m looking at all of the revenues that people pay into our state and local governments, and make sure we are holding the line on that. But I’ll say this, the best way to do that and to actually reduce taxes is growing our economy. And if we had just grown at the national rate under Governor Walker, our economy would be $1.9 billion larger than it is now. That’s a bigger tax base. It means we’re able to reduce taxes over the long term if we can grow our tax base.

Frederica Freyberg:

Burke says her goal is to put Wisconsin’s economy in the top ten nationally.Frederica Freyberg:

But first, a day after Governor Walker signed his $541 million tax cut into law in Green Bay this week, Democratic challenger, Mary Burke, rolled out her own plan for putting Wisconsinites back to work called “Invest for Success.” I sat down with her following its release and started by asking why her plan will work while she says Scott Walker’s has not.

Mary Burke:

It’s a matter of the time put into it. And I approach it from a business person’s perspective. At Trek Bicycle, where I was an executive, you know, I saw how we actually increased sales. And that experience I have brought to this business plan. So over the last five months I’ve had a lot of conversations with folks, economic development, CEOs, educators, experts in these fields. And I made sure that the plan that I put together is one that really provides the type of roadmap for how we will jump-start Wisconsin’s economy. We are lagging the rest of the country. We are lagging every other state around us in the Midwest. Out of ten Midwestern states we’re ninth in job growth. So we need a plan that is serious about specific strategies and tactics that are going to move Wisconsin forward. Frankly, what Governor Walker put out when he was running for governor did not have that type of thought and strategic and tactical approach to things. It was four pages. In fact, I bring it here today. This is it, four pages. It didn’t outline exactly how we were going to move the economy forward, and it shows in the results. You know, nowhere close to the 250,000 jobs promise that he made to the people of Wisconsin.

Frederica Freyberg:

So you reference Scott Walker’s four-page job plan when he ran in 2010 against Tom Barrett. Tom Barrett, for his part, had a 68-page jobs plan. Yours is about 40, or something like that?

Mary Burke:

About 40, yeah.

Frederica Freyberg:

And yet, look at how that race turned out. So is it about the length of the plan, or what is it about?

Mary Burke:

Well, I think it’s about the voters’ confidence in the gubernatorial candidates to actually deliver on what they promise. And, as I said, I approach this as a business person. And I think that this plan reflects that thinking. And they are really good strategies and tactics that I have consulted with experts and business people in the state as to what will really grow our economy. So it is a different approach. The five key strategies that I have in there, first and foremost is we have to align our economic development efforts around our key industry clusters, build on the success and the foundations we have, but also make sure we are supporting emerging industries. Second is around work force. My plan notes that we have to create, in Wisconsin 670,000 new degreed holders in the state by 2025 to compete for the jobs of the future. 670,000 is a lot. Now, that could be a certificate, or an associate’s degree, but it is post-high school degree. So we have to make sure investing in education is investing in jobs. And laying out how we do that, starting with redefining our high schools.

Frederica Freyberg:

In fact, you talk about this idea of kind of skills training with high schoolers beginning, even before they graduate, to know kind of what they want to do. How is that different from the kind of money that this administration has put toward vocational skills training to kind of try to meet the needs of the employers?

Mary Burke:

Well, we have seen just recently that Governor Walker has put more money into it. But that’s actually after he cut our technical colleges and our skills training. So that does not even make up for the cuts. So this is making sure that we set priorities. As governor I want to set that worker training and education is a priority. It means making tough budget decisions about where you are going to spend the money. I’m committed to holding the line on taxes. But I learned at Trek that if you want to grow sales and grow your profitability, you have to make investments. We did that when I– the division that I ran, where we increased sales in Europe from $300 million to $50 million. That required investment. So we need to take the same approach in the state, invest where we can grow, make sure we have the accountability measures and the metrics to make sure we’re headed on the right path, and be able to make those corrections if we’re not moving in that direction.

Frederica Freyberg:

As long as we’re talking about investments, I’ll jump off there and ask you about venture capital investments. You want to take that from $25 million to $125– $120 million over four years, saying– you say, that what we’re doing now is kind of not moving the needle on jobs. But where does the state money come from to put in that kind of money into venture capital?

Mary Burke:

Well, that would be a little– It would be less than $30 million a year additional money on top of it. So we– I would set priorities. I would look through every single line of our state budget. You know, it’s a $70 billion budget over two years. It means making tough choices, it means finding savings in other programs. But this is absolutely necessary. I want to be clear. This venture capital money is money that we get back. These are investments that you are actually investing side by side with private investors. They expect a return on their money. We should expect a return as well. So as that money gets paid back, we’ll be able to invest it in other Wisconsin growth opportunities. So this is investment that will pay off, make sure we’re not only creating jobs, but that we are getting that money back with a return on our investment.

Frederica Freyberg:

You talk about industry clusters or clusters of opportunity. How is that a different approach from what we might be doing now?

Mary Burke:

Well, there– We talk about that approach now, but actually you don’t see a lot of it being done. This says we’re going to align all of our public policy around– with work force development, some of our infrastructure projects, certainly around regulation, to be looking at how we support industry clusters. So it gets beyond just our economic development efforts, but also in terms of our public policy. So if you have an industry cluster, say around– you know, here in Madison area, we obviously have information technology, is a growing area. So we would work with firms in information technology, not only in Madison, but across the state, and say, what are the barriers that you’re finding to growing the industry, to exporting more of your goods and services abroad, to seeing new entrepreneurs get started in this area, what might there be in terms of bureaucracy and red tape that is standing in the way, looking at all of those issues, working with industry to identify them. Planning their work force needs. I hear that all the time from industry people as to whether they have the work force and the people that they hire to be successful and grow their businesses. So I have said in my plan, I’m going to assign an economist to each one of the clusters to forecast work force needs, then make sure that we’re working with our technical colleges, our universities, to have that work force available.

Frederica Freyberg:

Would you stick with the Wisconsin Economic Development Corporation or would you revert back to Commerce as an agency?

Mary Burke:

No. I would probably stick with WEDC. It’s been terribly mismanaged from the start. They lost track of taxpayers’ money that was loaned to companies and didn’t even follow up on whether those jobs were being created, whether that money was being paid back. You then have had turnover in top management there. And then on top of that, the latest news is that they’re not even using all of the funds that are appropriated to them, at the same time that I hear from small businesses across the state that they don’t have the capital in order to expand. But my feelings is the function, that’s more important than the form. It means you have to well manage the organization. And I would do that as governor. The governor is head of the WEDC. Walker needs to take responsibility for what has happened under WEDC in the three years that it’s been there. As governor, I would make sure that we’re managing that organization well.

Frederica Freyberg:

And yet in fairness, when you were commerce secretary, there was a 2006 state audit that suggested some of the same kinds of problems with tracking some of the money that was going out the door being given to create jobs. So how do you respond to that?

Mary Burke:

Well, that audit, which was released in– early 2006, covered a period of something like from 2002 into 2005 and ’06. I started at commerce in 2005. We took a lot of those recommendations and made sure that we did put in place those tracking mechanisms. But most of the deals that were cited under those were ones that did not happen when I was commerce secretary. But certainly took those recommendations to heart and made sure that we made any changes that were needed to track that money.

Frederica Freyberg:

Another matter you talk about is Wisconsin taking as many of the federal dollars back from Washington as it can, including taking the expanded Medicaid money for Wisconsin. But what about the danger of kind of initial federal dollars drying up and leaving the state holding the bag, which is Governor Walker’s concern, specifically with Medicaid?

Mary Burke:

Well, this is hundreds of millions of dollars that is Wisconsin taxpayer money that goes to Washington. As governor, I will fight to get as much of that support and money back into the state. But this money is committed to pay for 100% of the cost for the first three years of the program and then 90% therefore. So that’s a great deal. I mean, 100% and then at least 90% after that. I think we take a lot of federal money and support, as we should. That doesn’t necessarily say it’s going to be there for the long term. This is making health care– It would make health care more affordable here, more accessible in Wisconsin, and there’s no reason to turn down that money other than to just score political points.

Frederica Freyberg:

You talk in your plan as well about increasing exports and there’s a line in there that I want to quote. You say, Off-shoring American manufacturing jobs to other localities is labor is cheaper has been the dismal trend for over 30 years. We talked about this the last time you were on our air. We talked about how Trek Bicycles outsourced to China. You made bicycles in China. So how do you reconcile what you’re saying in your jobs plan about this being a dismal record with what your own company did?

Mary Burke:

Well, the United States and in Wisconsin we have seen it be very difficult for Wisconsin manufacturers and US manufacturers to be able to compete with very low-wage countries. The United States lost 31% of its manufacturing jobs since 2000. Wisconsin has lost a quarter of our manufacturing jobs. So as governor, I am going to fight to see if it is the right time to be able to compete effectively by bringing those jobs back. Things have changed. Fuel costs have increased, so the transportation costs to come from China, costs more to bring it to the US. More and more manufacturers want to be closer to their customers and be able to meet their demands on very short time frames. That benefits companies that have manufacturing in the US. And so Trek manufactures more bicycles in Wisconsin and in the US than any other company. But it is an extremely competitive industry, and none of Trek’s major competitors even produce one bike here in the United States. So Trek does what it can. But I hope the climate around the economics around US manufacturing versus overseas manufacturing have changed so that companies like Trek can find it profitable to bring some of those jobs back. And as governor, I would be encouraging them to do so.

Frederica Freyberg:

You say that we should hold the line on taxes, and yet I think I’m right that you said that you didn’t agree with Governor Scott Walker signing into law the tax breaks that he just did this week. So what is your version of holding the line on taxes?

Mary Burke:

Sure. Well, what Governor Walker did was irresponsible, because he is spending money, he’s giving tax breaks on money, we don’t have yet. This is a projected surplus that we won’t know until June of 2015 whether it exists or not. So this is going out and spending money we don’t have. The other thing is is part of the surplus has been generated because we’ve run up debt. Walker has added $1.2 billion of debt over this same period of time. And we now enter the next budget biennium with a $800 million deficit. So that’s why I say– I call it irresponsible. It’s basically spending money we don’t have after we have already borrowed a lot of money, and we have big transportation projects that we are not knowing how we’re going to fund. So as governor, when I say hold the line on taxes, making sure that we are not increasing our tax rates. And that’s important. We have to be competitive as a state in terms of both our business taxes, our corporate taxes and our individual taxes. But we have to look at the totality of it, property taxes, income taxes, our sales taxes are significantly lower than other states, and the fees that we charge for like motor vehicle registration. So when I say, hold the line on taxes, I’m looking at all of the revenues that people pay into our state and local governments, and make sure we are holding the line on that. But I’ll say this, the best way to do that and to actually reduce taxes is growing our economy. And if we had just grown at the national rate under Governor Walker, our economy would be $1.9 billion larger than it is now. That’s a bigger tax base. It means we’re able to reduce taxes over the long term if we can grow our tax base.

Frederica Freyberg:

Burke says her goal is to put Wisconsin’s economy in the top ten nationally.