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Published - Tuesday, August 12, 2008

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Picking Commerce secretary is tricky

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With the abrupt resignation of Secretary Jack Fischer last month, the state Department of Commerce is looking for its fourth leader in four years -- and at a critical time for the state.

The state is seeing thousands of layoffs in the auto, paper, airline and other industries amid a flagging economy.

And investments in technology-based businesses in Wisconsin continue to lag behind other states.

"If there's any time to have a good person in this job it's now because it's going to take help from the Department of Commerce to help some of these communities recover from these job losses," said Mark Bugher, director of the University Research Park in Madison.

Observers said other factors could make it a hard job for Gov. Jim Doyle to fill: the scrutiny given to Fischer's spending habits on overseas trips and speculation that Doyle might be offered a job in Washington if Democratic Sen. Barack Obama wins the presidential election.

At the same time, the opening represents an opportunity for Doyle to refocus the $198 million department, charged with helping state companies market goods in other countries, spurring investment in technology and other businesses and aiding local businesses and communities.

"The economy is struggling right now, so it's a great opportunity for someone to market the state as a great place to do business and build economic development in the state," said Bill McCoshen, a former Commerce secretary under Gov. Tommy Thompson and now a lobbyist who has worked with the agency for business clients.

Doyle has said he's looking for someone who wants the challenge of leading the agency during a difficult economy but said he won't rush into a selection.

"It's a complicated and difficult job," Doyle said last week. "I want to get someone with a background in economic development, with a background in business development and who understands the economy and will be a cheerleader for Wisconsin."

Doyle wouldn't say whether he has offered the job to anyone yet.

'Might scare some'

Fischer, an architect from Appleton, resigned after a series of reports in the Milwaukee Journal Sentinel about his profligate spending habits on overseas trade missions. He was Doyle's third Commerce secretary and had only been appointed in November.

Critics said Fischer failed to recognize the difference between public sector and private sector travel. Some said they worried that others from the private sector would be less willing to take the job because of the scrutiny he came under.

"It might scare some people away," McCoshen said of the Fischer controversy. "Because you have all kinds of financial disclosures you have to make and you're coming in after a bit of a mess."

Tom Still, president of the Wisconsin Technology Council, said some business owners are concerned that the agency will pull back on trade missions after the scrutiny given to Fischer's spending.

"They're worried about the timing, of a lag at a time when we seem to be gaining momentum and we seem to be doing a better job," Still said of exporting. "It's a matter of, Gosh, we're making some headway here, let's not lose that over some inappropriate expenses.'"

Commerce has delayed one trip, to India, because of the secretary vacancy, but it will be rescheduled when the job is filled, said spokeswoman Barbro McGinn. While other trips haven't been finalized, the department will continue to pursue trade missions, she said.

Doyle acknowledged in an interview that the job is a hard one to fill and that turnover is high in the position because business officials often have to take a pay cut to work for government and have to live under more constraints because they're funded by taxpayer money.

The marching orders

Doyle said the next secretary will be charged with helping advance his Grow Wisconsin economic development strategy and promote a package of economic development initiatives that failed to pass the Legislature last session.

In the governor's first term, the Legislature passed Doyle-backed bills streamlining regulations and repealed taxes on fuel and electricity used in manufacturing, moves praised by business supporters. And the administration and lawmakers collaborated on legislation that provided tax credits for investments in emerging companies.

Sen. Ted Kanavas, R-Brookfield, who helped craft the tax credit bill with former Secretary Cory Nettles, said additional tax breaks are needed to spur business investment in the state.

"Wisconsin remains at risk," Kanavas said. "We have not done enough to create the kind of balanced entrepreneurial economy to offset the kind of traditional problems Wisconsin has had."

And he called for passage of Doyle's economic development package that stalled in the Democratic-controlled Senate last year. The package included eliminating state taxes on capital gains of up to $10 million if the money is invested in a Wisconsin business, raising caps on tax credits for investments in emerging companies and adopting tax credits for research and development spending.

But Scot Ross, executive director of the liberal advocacy group One Wisconsin Now, said tax cuts shouldn't be the first choice in creating a strong economy.

The next Commerce secretary needs to support spending on roads, schools, universities and municipal services because that infrastructure makes businesses want to stay and move here, he said.

"Experience shows both in the state of Wisconsin and the rest of the country that tax cuts won't buy loyalty from corporations," Ross said.

'Red flags'

The business community is watching the pick closely for what it could signal about Doyle's commitment to growing the economy.

"If it's someone with economic development experience it'll be a plus," McCoshen said. "If it's someone straight out of the business community there will be questions and red flags about whether they can make the transition to the public sector. If it's a political hire, it would be seen as a joke."

Bugher and others said the business community got a good sign when Doyle tapped Madison Alder Zach Brandon as the agency's executive assistant, the number three job in the agency.

Brandon, who owns a Madison laundromat-pub attractive to young people, said he hopes his business background will allow him to work with startup companies around the state.

"Maybe out of these job losses an entrepreneur will emerge with an idea for the next big manufacturing company," he said.

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