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Economic Development
Entrepreneurship levels fall in 2012 thanks to improving economy; Midwest lagging nation in new-business creation
by Laura Tomaka ~ May 2013 ~ Stateline Midwest »
At the same time that the nation’s unemployment rate was falling in 2012, entrepreneurial activity was slowing. according to the Kauffman Foundation’s annual Index of Entrepreneurial Activity. More »
Wisconsin lawmakers look to close state's job-skills gap with multi-pronged
workforce-training measure
by Laura Tomaka ~ April 2013 ~ Stateline Midwest »
Even as many indicators signal that state economies are on the rebound, one important and persistent labor market trend continues — the skills gap between the needs of employers and the qualifications of job seekers. Wisconsin lawmakers believe a measure passed earlier this year will help close that gap in their state. More »
Much of rural Midwest has lower jobless rates, but also declining workforce
by Carolyn Orr and Laura Tomaka ~ March 2013 ~ Stateline Midwest »
One sign that the economy continues on a path to recovery is the continuing decline in unemployment rates since 2010. But in some parts of the rural Midwest, rates never hit high levels even during the depths of the recession.
Instead, another question about the labor force is being asked: Why is it dwindling, and what can be done to bring workers back? More »
Putting retirement on hold: Rise in older workers redefines labor force, impacts economy
by Tim Anderson ~ March 2013 ~ Stateline Midwest »
For most of the 20th century, thanks in large part to Social Security benefits, the advent of Medicare and widespread access to employee-sponsored pension plans, American workers were retiring earlier and earlier from their jobs. But over the past two decades, the exact opposite has been occurring: In 1990, 12.1 percent of people 65 and older were in the labor force; U.S. Census Bureau data released earlier this year show that the rate reached 16.1 percent in 2011. More »
Fast-growing firms not limited to geographic clusters or high-tech sector
by Laura Tomaka ~ February 2013 ~ Stateline Midwest »
A report by the Kauffman Foundation reveals some surprising results with regard to the “geography of entrepreneurship,” both in terms of where high-growth companies and innovations tend to be located and the factors that drive concentration patterns. More »
Declining state support, rising enrollments putting pressure on public research universities
by Laura Tomaka ~ January 2013 ~ Stateline Midwest »
State support for the nation’s public research universities declined by 20 percent between 2002 and 2010, a period in which enrollment increased by 13 percent. The result has been steep tuition hikes, fewer resources for science and engineering programs, and shrinking budgets for research and development. More »
Aiming higher: States look for ways to produce more-educated populations to feed economic demand for skills
by Laura Tomaka ~ December 2012 ~ Stateline Midwest »
Under a new set of recommendations in Ohio, half of the state’s funding for higher-education institutions would be based on how well they contribute to a key economic goal: boosting the number of college graduates in the workforce. In late November, Ohio Gov. John Kasich and a state panel released a higher-education finance framework designed to give greater weight to degree completion in determining funding for the state’s public colleges and universities. More »
Michigan joins 6 other states in Midwest with "right-to-work" laws that ban union-security agreements
by Tim Anderson ~ December 2012 ~ Stateline Midwest »
Early in 2012, Indiana became the first Great Lakes state to adopt so-called “right-to-work” legislation (dubbed “right to work for less” by opponents). It didn’t take long for a neighboring state to follow suit. More »
Economic drivers for states, policy ideas for lawmakers highlighted in two new studies
by Laura Tomaka ~ October 2012 ~ Stateline Midwest »
Taxes and regulations have a significant impact on business creation and development, including how fast businesses grow and where they decide to locate. However, other policies impact the robustness of state economies as well, according to two reports released in July by the National Governors Association. More »
Poverty rates, income inequality up in most Midwestern states
by Tim Anderson ~ October 2012 ~ Stateline Midwest »
Poverty rates and income inequality are on the rise in most parts of the Midwest, new U.S. Census Bureau data show, with the former reflecting current economic woes and the latter continuing a decades-long trend. More »
New MLC-led network would pursue regional collaboration among Midwest’s states
by Laura Tomaka ~ Stateline Midwest »
Can the Midwestern states collaborate to more effectively compete in the national and global economy?
This question, which has been at the center of the work of the Midwestern Legislative Conference’s Economic Development Committee for the past two years, was explored further during the committee’s July meeting. More »
Wheelan's advice to legislators: Make skills development, not search for jobs, core of
economic policies
by Tim Anderson ~ Stateline Midwest »
The Midwest, Charles Wheelan said during remarks to the region’s state lawmakers this summer, was “organized brilliantly” for success in the 20th century. But he believes the region needs to add one more economic advantage for success in the current and future global economy. More »
In most Midwestern states, income growth is outpacing the nation’s
by Tim Anderson ~ June 2012 ~ Stateline Midwest »
Fueled in part by strong earnings growth in the farm and manufacturing sectors, most states in the Midwest are outpacing the rest of the nation on a key economic indicator — the change in per capita personal income. More »
Minnesota becomes latest state to OK public financing of new NFL stadium
by Kate Tormey ~ June 2012 ~ Stateline Midwest »
After many years of debate, the Minnesota Legislature has approved a plan to build a new stadium for the Vikings, the state’s National Football League team. More »
New Brookings report highlights positive signs for urban manufacturing in Midwest
by Laura Tomaka ~ June 2012 ~ Stateline Midwest »
Despite the significant amount of attention being given to the decline of American manufacturing, recent work by the Brookings Institution points to a surviving, if not thriving, sector. In a series of reports, experts point to manufacturing’s continued contributions to economic growth and importance to the U.S. economy. More »
Pew: States need to better evaluate tax incentive programs
by Kate Tormey ~ May 2012 ~ Stateline Midwest »
While every state offers some kind of tax incentive to spur economic development, about half of the states are failing to determine whether these programs are effective, according to a report recently published by the Pew Center on the States. More »
Minnesota report details impact of angel-investment tax credits; tweaks to program considered
by Laura Tomaka ~ May 2012 ~ Stateline Midwest »
In an effort to spur job growth, states have increasingly focused on encouraging angel investment in young, entrepreneurial firms that hold the promise of high growth and high profits in emerging business sectors. More »
Illinois, Minnesota proposals aim to help returning veterans find work
by Tim Anderson ~ May 2012 ~ Stateline Midwest »
Illinois and Minnesota are among the states this year considering new measures to help war veterans find work upon their return home from service.
In Illinois, a bill passed unanimously by the state Senate in April (SB 3241) would provide employers with a tax credit of up to $5,000 for hiring an unemployed veteran. Under current state law, the maximum credit is $1,200.
Minnesota’s SF 1599, signed into law in April, allows employers to set hiring preferences for veterans and for the spouses of deceased or disabled veterans. Another measure (HF 2909/SF 2488) would expand the reach of the state’s GI bill, allowing it to help pay for apprenticeship and on-the-job training programs for Gulf War Era II veterans — those who have served on active duty since September 2011. According to the Minnesota House publication Session Weekly, the state’s current GI bill only pays for postsecondary education expenses.
In March, the U.S. jobless rate among Gulf War Era II veterans was 10.3 percent, compared to 7.5 percent for all veterans and 8.2 percent for the general U.S. population. There is an especially large gap in employment rates between younger veterans (18 to 24) and their peers.
Midwest lagging rest of U.S. on measures of high-tech employment
by Laura Tomaka ~ April 2012 ~ Stateline Midwest »
Between 2003 and 2008, the Midwest shed high-tech jobs and lagged the nation as a whole in creating high-tech firms, a concerning trend for policymakers who have pinned hopes for their state’s economic future on expanding this industry sector. More »
Iowa seeks rise in number of employee-owned businesses
by Tim Anderson ~ March 2012 ~ Stateline Midwest »
In the 1980s, federal tax incentives were credited with a steep rise in a relatively new type of business ownership, known as an employee stock option plan. Fast-forward three decades, and Iowa may soon serve as a laboratory to test the effects of state-level assistance for these plans, under which the workers at a company take over ownership of it. In February, the Iowa House overwhelmingly passed HF 2284, which offers tax breaks as well as state financial and technical assistance to encourage the formation of employee stock option plans.
According to The Des Moines Register, owners who sell a business to employees could receive a tax break of up to $700,000. Gov. Terry Branstad touted the idea in his State of the State address, saying such plans are particularly important in rural areas, where anchor businesses are not only critical to the local economy, but have become a “way of life.”
One way to ensure a business remains in a community is for workers to own it — a benefit that Indiana Treasurer Richard Mourdock highlighted in 2007 when he launched an initiative to encourage the formation of employee stock ownership plans. Under the program, the treasurer’s office works with banks to help facilitate the necessary transactions.
Settlement opens door for states to do more to help people stay in homes
by Tim Anderson ~ March 2012 ~ Stateline Midwest »
The long fight by states to prevent foreclosures and stabilize housing
markets will be getting up to a $40 billion boost over the next three years as
the result of a historic settlement with the nation’s five largest
mortgage servicers. More »
Midwest failing to capture its share of venture capital investment
by Laura Tomaka ~ March 2012 ~ Stateline Midwest »
States in the Midwest were part of a national uptick in venture capital activity in 2011, but the region is still failing to capture its share of investments in high-growth, innovative economic sectors and businesses. More »
Right-to-work law returns to Indiana, as does union effort to repeal it
by Tim Anderson ~ February 2012 ~ Stateline Midwest »
For Indiana residents old enough to remember their state’s politics of the
mid-20th century, the legislative battle in recent years over a so-called
“right-to-work” law (dubbed “right to work for less” by opponents) is nothing
new. More »
States increasing use of tax incentives to lure business
by Laura Tomaka ~ February 2012 ~ Stateline Midwest »
Last year, Sears Holdings Corp. announced that, with state and local incentives set to expire in 2012, the company would consider moving out of Illinois, where it has been based since 1887. The result was a flurry of states, including New Jersey, Ohio, North Carolina, South Carolina, Texas and Georgia, expressing interest in landing the retail giant. More »
Wisconsin, Nebraska and Illinois among states with new initiatives to help small business
by Laura Tomaka ~ January 2012 ~ Stateline Midwest »
More than half of the nation’s private sector jobs come from small businesses — firms with fewer than 500 workers. Therefore, it’s no surprise that as states strategize to jump-start their economies, small-business growth has been the focus of much attention and new legislation. In the Midwest, the result has been new tax incentives and grant programs; states, too, are tapping federal funds aimed at supporting small-business
development. More »
‘Buy American’ provisions of Jobs Act raise concern of harm to firms on both sides of border
by Ilene Grossman ~ December 2011 ~ Stateline Midwest »
Provisions in President Obama’s proposed jobs plan that would require certain projects to use only American-sourced materials have sparked fear over potential damage to the United States’ largest trading partnership — with its cross-border neighbor Canada. More »
The export Midwest: States expanding programs that aim to increase number of businesses, products in overseas markets
by Tim Anderson ~ December 2011 ~ Stateline Midwest »
With new federal grants, states plan to expand export assistance programs for small and medium-sized businesses. More »
Reworking workers’ comp: On 100th anniversary of system, states focusing on changes that cut business costs, remove uncertainties
by Laura Tomaka ~ November 2011 ~ PDF of Stateline Midwest article here »
For 100 years, employees injured on the job have been provided guarantees through state workers’ compensation systems that cover the cost of medical and rehabilitation services, as well as lost wages.
In return for carrying this mandatory insurance, employers are protected from potentially costly lawsuits.
But have the systems themselves become too costly for business and inefficient? More
»
In Indiana, split over ‘right to work’ likely to spill into 2012 session
by Tim Anderson ~ November 2011 ~Stateline Midwest »
Indiana lawmakers have taken the first step to once again considering so-called “right-to-work” legislation, a contentious issue that led to a five-week walkout during the 2011 session by Indiana House Democrats. In October, an interim committee voiced its support for a measure prohibiting contracts between employers and employees that require workers to pay union-representation fees.
Opponents of such measures have derided them as the “right to work for less,” saying they weaken unions and collective bargaining. Indiana schoolteachers have had the right to opt out of union membership or fair-share fees since 1995. Very few have exercised this option, the Northwest Indiana Times reports.
Nationwide, there are 22 right-to-work states, including five in the Midwest: Iowa, Kansas, Nebraska, North Dakota and South Dakota, according to the U.S. Department of Labor. All five laws were enacted in the 1940s and 1950s. Indiana passed legislation in 1957 but repealed it eight years later. The last U.S. state to enact a right-to-work law was Oklahoma in 2001.
On the front lines of the foreclosure crisis: State response includes new land-bank laws,
multi-state investigations and aid for distressed borrowers
by Tim Anderson ~ October 2011 ~ PDF of Stateline Midwest article here »
Rates of foreclosure are at levels not seen the 1930s, and some communities in the Midwest have been particularly hard hit by a rise in the number of blighted properties. States are responding with new measures and investigations designed to help troubled communities and homeowners. More »
Decade of decline: Data show deep impact of poor economy
by Tim Anderson ~ October 2011 ~ Stateline Midwest »
Mirroring the story they tell at the national level, new U.S. Census Bureau data on measures of economic prosperity show a steep rise in poverty and a decline in household incomes in the Midwest over the past decade. A look at state-by-state figures, too, show parts of the region faring worse than the country as a whole. More »
Entrepreneurship report ranks Midwestern states mostly near middle of U.S.
by Laura Tomaka ~ October 2011 ~ Stateline Midwest »
When it comes to performance on measures of entrepreneurship, middle America tends to fall in the middle of the pack, according to a recently released State Entrepreneurship Index from the University of Nebraska’s Bureau of Business Research. More »
Study of business tax burdens shows most Midwestern states below national average
by Tim Anderson ~ September 2011 ~ Stateline Midwest »
In the competition for business and job growth, most Midwestern states fare better than the U.S. average on at least one measure — the burden that their overall tax structures place on businesses. More »
Report lays out blueprint for more collaboration, less competition among states
by Laura Tomaka ~ MLC Annual Meeting Edition 2011 ~ Stateline Midwest »
The 11 states of the Midwest form an interdependent, collective economy, and thus, it makes no sense for the states to compete over jobs and business locations. This was the conclusion reached in a recent report by the MLC Economic Development Committee, which was unveiled to lawmakers at the group’s July meeting in Indianapolis and was a focal point of discussions on how to proceed with policies that foster more interstate collaboration. More »
Rise in exports seen as key to region’s long-term prosperity, and states can play supporting role with partnerships that help budding exporters
by Ilene Grossman ~ June 2011 ~ PDF of Stateline Midwest article »
When officials at the Wisconsin manufacturing company Spee-Dee Packaging Machinery began seeking ways to expand the business, it became clear that one of their best options was to export. Taking this step, however, is not an easy one for small and mid-sized businesses such as Spee-Dee. The firm got a helping hand from the state, and has since become an early exporting success story.
The ability of Spee-Dee and other businesses to export their products and services will be a critical barometer of the region's economic recovery and long-term prosperity. More »
Export activity as a percentage of total GDP in 11-state "export-rich" Midwest »
Goals of new National Export Initiative at federal level »
Article in May/June issue of CSG's Capitol Ideas: Export Markets Can Help States Grow Jobs »
North Dakota, Michigan seek to boost economy with new investments in research
by Laura Tomaka ~ June 2011 ~ Stateline Midwest »
Lawmakers across the Midwest are seeking ways to support and expand existing and new economic development programs. In North Dakota and Michigan, bills recently signed into law will ensure those states’ commitment to technology-based economic growth will continue. More »
Mending workers’ compensation system goal of new Kansas law
by Tim Anderson ~ May 2011 ~ Stateline Midwest »
A compromise between business and labor groups in Kansas has led to the first overhaul of the state’s workers’ compensation system in nearly 20 years.
For workers disabled or killed on the job, benefit caps were increased to $155,000 and $300,000, respectively, The Topeka Capital-Journal reports.
At the same time, the new law seeks to prevent unwarranted claims by tightening reporting requirements. In addition, a worker must suffer a post-injury wage loss of at least 10 percent in order to receive permanent disability benefits. HB 2134 also eases the standard for when an employer can request drug and alcohol testing after an injury has occurred. Employers, too, are given assurances that they will not be responsible for paying the costs associated with the pre-existing conditions of injured workers.
Kansas already has relatively low workers’ compensation premium rates, according to a national study done in 2010 by the state of Oregon. Kansas’ rate that year was $1.55 per $100 in payroll, eighth lowest among the 50 states. Indiana ($1.16) and North Dakota ($1.02) had the lowest rates in the nation. In contrast, Illinois’ premium rate was $3.05, highest in the Midwest and third-highest in the nation.
What mechanisms do states use to review the efficacy and/or oversee the use of their tax incentives for businesses?
by Tim Anderson ~ May 2011 ~ Question of the Month »
The recent economic downturn has pushed states to find ways of attracting new businesses, retaining old ones and encouraging job creation, but at the same time, the fiscal crisis has put a premium on getting the most out of the grants and tax incentives that are offered to companies. More »
Study links higher ed reforms to revitalized regional economy
by Laura Tomaka ~ May 2011 ~ Stateline Midwest »
The Midwest, once the national leader of the industrial economy, is now floundering in the knowledge- and innovation-driven global economy. The way back to economic vitality and growth, says James Duderstadt in a report for The Chicago Council on Global Affairs, will require changes in another traditional strength of the region: “our extraordinary array of colleges and universities.” More »
Population loss in cities continues, with ‘black flight’ among the latest trends seen by demographers
by Tim Anderson ~ May 2011 ~ Stateline Midwest »
The story of the population and economic decline of some of the Midwest’s largest, historically most important cities did not begin in 2000 and will likely not end in 2010.
Nonetheless, data from U.S. Census 2010 are striking in showing the extent of the out-migration from many of this region’s central towns. More »
Bills seek to reduce red tape for businesses needing state permits
April 2011 ~ Stateline Midwest »
Lawmakers in Minnesota and Ohio have passed bills aimed at making it easier and faster for new businesses to obtain state permits. Minnesota’s legislative auditor issued a report earlier this year that found inconsistencies in response times on permit applications, citing waits of up to a year.
HF 1/SF 42, signed by Gov. Mark Dayton last month, seeks to address that issue by directing the state Department of Natural Resources and the Pollution Control Agency to streamline and simplify application processes. The law sets a goal of 150 days for permit decisions, reports the Brainerd Dispatch. Appeals of permit decisions will now go directly to the State Court of Appeals instead of district courts.
The bill is being lauded as a way to reduce red tape and spur job growth. Critics have raised concerns that environmental protection will be weakened as review processes are sped up.
A similar bill approved in Ohio, SB 2, requires state agencies to analyze each proposed rule or regulation and its impact on businesses. A legislative review committee can deny a proposal if it finds that a regulation is not justified. State agencies must also develop customer-service standards and integrate them into the job descriptions and performance evaluations of employees.
With recession spurring more business startups, states launch initiatives to help entrepreneurs
by Laura Tomaka ~ April 2011 ~ Stateline Midwest »
During periods of slow economic growth and high unemployment, the number of new business startups tends to increase as more people seek self-employment. The current economic downturn is no exception: Entrepreneurial activity and new business creation in the United States are at their highest points in 15 years.
In order to help encourage this growth, state policymakers are looking for ways to better support these new enterprises. More »
States mull privatizing business recruitment, job creation efforts
by Laura Tomaka ~ March 2011 ~ Stateline Midwest »
Proposals to transfer business-recruitment functions to private entities have advanced in three Midwestern states. Governors in Iowa, Ohio and Wisconsin have led the charge in hopes of making these agencies more responsive to the businesses they serve.
In February, Wisconsin Gov. Scott Walker signed legislation that creates the Wisconsin Economic Development Corporation, a public-private entity that will be in charge of the state’s business-recruitment efforts. More »
Push from rural leaders needed to accelerate broadband access
by Carolyn Orr ~ March 2011 ~ Stateline Midwest »
A rural entrepreneur, Iowa Rep. Annette Sweeney experienced first-hand the frustrations and constraints of living in an area without high-speed Internet service. More »
Governors make clear what is job #1 in their states: Job growth
by Tim Anderson ~ February 2011 ~ Stateline Midwest »
In their first major attempt to shape public opinion and legislative policy agendas in 2011, the region’s governors used their State of the State addresses in January to build support for a series of new initiatives that they say will spur job and economic growth. More »
Follow the money: Databases help track use, effectiveness of states’ tax subsidy programs
by Laura Tomaka ~ February 2011 ~ Stateline Midwest »
Policymakers are increasingly demanding more accountability and transparency with the tax breaks and incentives being used to lure businesses and create jobs, and few states have more robust systems in place than Illinois, Ohio and Wisconsin. More »
Kansas puts increased emphasis on ‘economic gardening’ as a tool to grow the state’s rural economy
by Carolyn Orr ~ February 2011 ~ Stateline Midwest »
In Kansas, as is the case in many states, the data on job growth are clear: Most new jobs in a local economy are produced by the community’s existing small businesses, rather than by startups or relocations. More »
New data tell familiar story about weakness of region's 'new economy'
by Laura Tomaka ~ January 2011 ~ Stateline Midwest »
A November 2010 report measuring the strength of the “new economy” in all 50 states shows that the Midwest continues to lag behind other regions of the country on measures tied to technology- and innovation-led
growth. More »
Midwestern states aim to retool economies by supporting startup businesses, fostering development of new products
by Laura Tomaka ~ October/November 2010 ~ PDF of Firstline Midwest article »
Midwestern states have not kept pace with the rest of the nation on many measures of growth and prosperity. For example, a recent report by CSG Midwest and GrowthEconomics showed that the region has lagged behind the nation in terms of job creation and per-capita disposable income for the past four decades.
Furthermore, many Midwestern states have struggled when it comes to having innovative, entrepreneurial economies. The most recent State New Economy Index, produced by the Kauffman Foundation and the Information Technology and Innovation Foundation, placed eight Midwestern states in the bottom half of rankings that measure how well states are competing in the new economy. More »