Business Beat: Economic crisis should spark consolidation
Of all the ideas that have come out of the Great Recession, the one I'm liking best is more cooperation between Wisconsin and Minnesota.
With both states facing huge budget deficits and struggling economies, Gov. Jim Doyle and Tim Pawlenty announced Tuesday they hope to save money by jointly purchasing products and services.
Wisconsin faces a deficit of $5.4 billion by June 2011 while Minnesota is looking at a deficit of $4.8 billion in its upcoming two-year budget.
Doyle and Pawlenty said they will direct their top aides to meet soon to discuss potential savings, such as buying products in bulk to receive discounts.
But why stop there?
The economic crisis, which is shaking this country to its very core, seems to present an opportunity to make some real steps toward consolidation in everything from public services to sharing technology.
Start by eliminating duplication of law enforcement agencies.
There is no valid reason for Madison, Dane County, the village of Shorewood Hills and every other municipality in the state to have its own cop shop. The savings just from cutting out all the overlapping police and fire chiefs would make a nice dent in any budget hole.
Same with public education. Given the realities of the 21st century, why does Wisconsin need 426 different school districts each with its own cadre of administrators?
Figuring each superintendent hauls down north of six figures in salary and benefits, cutting the number of school districts in half would bring over $30 million in savings each year.
Wisconsin actually is looking in that direction. The Legislature last year approved $250,000 in grants to help districts study consolidation. Park Falls and Glidden in northern Wisconsin are already merging. Closer to home, Argyle and Pecatonica are considering it.
"The issue is out there," says Patrick Gasper, communications director for the Department of Public Instruction.
Business leaders have also talked about more cooperation.
Thrive, the Madison-based organization formerly known as the Regional Economic Development Entity, has talked about a more collaborative approach to economic development -- although the group hasn't yet shown the guts to take on the tough issues like public sector consolidation.
But rather than wasting limited resources on duplicated services, Midwestern states need to work together if they hope to compete in the new world economy.
"A guy in China doesn't care about the difference between Minnesota and Wisconsin, and we shouldn't either," says Richard Longworth, author of the 2008 book "Caught in the Middle: America's Heartland in the Age of Globalism."
Longworth, who spoke in Madison last spring, warns that the Midwest is already way behind and losing more ground every day.
Longworth says cities like Madison, Chicago and Minneapolis are well-positioned to survive in a changing world. Not so for the rest of the region, which is losing population, jobs and its brightest young people to other regions.
"We're very much at the start of the global era, and so far, most of the Midwest isn't handling it very well," says Longworth, a former Chicago Tribune reporter and two-time Pulitzer Prize finalist. "We're in a state of denial and have forgotten how to be innovative, how to be entrepreneurs."
Indeed, Longworth notes that the Midwest was once the center of both the industrial revolution and progressive political thinking. Chicago invented the skyscraper and Henry Ford invented modern manufacturing; Wisconsin invented workers compensation insurance, and labor unions invented the weekend.
But today, he warns, individual states aren't big enough or rich enough to compete on a global scale.
Unfortunately, Longworth says, the concept of regionalism has yet to sink in with traditional institutions like government or universities. He levels particular criticism at the big land grant colleges of the Midwest for not collaborating while fighting expensive turf wars for funding and professors.
"There is a concentration of intellectual firepower in the Midwest that could conquer the world," he said. "The only problem is states are all competing and duplicating each other."
Maybe Wisconsin and Minnesota getting together to buy stuff like road salt in bulk is a good first step.
Yellow Pages
bike map
Say what you want about telecommunications giant AT&T, but any company headed by a bike guy is OK by me.
The regional president of AT&T is Scott VanderSanden, a U.S. Cycling federation racer with Second City Cyclists of Chicago in the late 1980s.
VanderSaden now lives in Oregon and commutes to the AT&T state headquarters in Milwaukee, which is one reason you'll find a bicycle guide to Madison in the 2009 Yellow Pages.
"Madison is a great biking community and it's a way for us to be a part of that community," he says.
Look for the four-page insert next to the listings for "bicycles" in the Yellow Pages being distributed this month.
On another biking note, the Dane County Bicycle Association is looking for proposals for its 2009 grant program. For nearly 30 years, association grants have been used for everything from bike racks to advocacy efforts and education.
For more information, visit www.danecountybicycle.org or call Bill Putnam at 770-8242.
