• WisBusiness

Friday, September 28, 2012

Rick Chandler: Minnesota tax policy impairs income tax reciprocity agreement

By Rick Chandler
Restoring Wisconsin's income tax reciprocity agreement with Minnesota has been a top priority for the Wisconsin Department of Revenue. Here's an update on the status of those efforts. The bottom line is that Wisconsin has offered a very reasonable proposal to Minnesota, but we have so far been unable to reach agreement due to a demand for an additional payment that hadn't been mentioned by Minnesota when it cancelled the agreement in 2009. Wisconsin legislators and the Wisconsin Department of Revenue are continuing to work together to urge Minnesota to reach a reasonable compromise, so we can make taxpaying easier for residents in both states.

In 2009, Minnesota ended its 40-year income tax reciprocity agreement with Wisconsin. Minnesota Governor Tim Pawlenty had said he would end the deal unless Wisconsin accelerated its compensation payments to Minnesota.

Over 57,000 Wisconsin residents work in Minnesota and over 22,000 Minnesota residents work in Wisconsin. The agreement saved taxpayers in both states the burden of filing two state tax returns by allowing them to file one return in their home state.

When Wisconsin Governor Scott Walker took office in January 2011, he made it a priority to work with Minnesota to restore the agreement. Minnesota Governor Mark Dayton also offered his support. Governor Walker took the first step by paying an old debt to Minnesota leftover from the prior agreement. This past February, I led a team from the Wisconsin Department of Revenue which joined Wisconsin and Minnesota border legislators and the Minnesota Department of Revenue at a summit conference in St. Paul aimed at restoring income tax reciprocity.

In March and April, Wisconsin made offers to Minnesota that would have provided accelerated, quarterly payments to Minnesota and used the results of a new joint benchmark study to calculate the size of the payment. By agreeing to Minnesota's terms on these two issues raised in 2009, Wisconsin hoped we could restore an agreement that benefits taxpayers in both states.

However, the Minnesota Department of Revenue raised a new issue. With reciprocity eliminated, Minnesota experienced a tax revenue windfall funded by its residents due to how border crossers are taxed in Minnesota.

That windfall results from a little known provision in Minnesota's tax code. In Wisconsin, we provide our residents a full credit for taxes paid to another state to avoid double taxation. However, Minnesota limits its tax credit for taxes paid to another state. This means that when Minnesota ended income tax reciprocity, its treasury received more tax revenue from its own residents who work in Wisconsin. Regrettably, Minnesota has insisted that to restore the agreement, Wisconsin taxpayers must reimburse Minnesota an amount above and beyond the difference between taxes foregone by the two states. Under their only offer, Wisconsin would be required to pay Minnesota for the cost of reversing the tax increase Minnesota imposed on its residents when the old agreement was cancelled.

Making such a payment, estimated to be as much as $15 million by Minnesota, is not possible under current law. Furthermore, it is unreasonable to ask Wisconsin taxpayers to pay to reverse a tax increase Minnesota imposed on its own residents.

In a conference call last week with Minnesota border legislators, Wisconsin urged Minnesota to either stop seeking this new reimbursement or to remove the issue altogether by providing its residents a full tax credit for taxes paid to other states as Wisconsin does.

A Minnesota legislative solution that protects its taxpayers from higher taxes and unfair application of credits would remove the "treasury-centric" approach Minnesota's Administration has used to block a deal.

It's important to note that Minnesota has reciprocity agreements with Michigan and North Dakota but does not require a reimbursement for its tax credit limitation. We believe Eastern Minnesota border legislators should demand the same treatment for their taxpayers.

Wisconsin border legislators from La Crosse, to Hudson, to Superior, have been especially strong advocates in our efforts to restore income tax reciprocity. Senators Jauch and Harsdorf have led the fight. We stand ready to restore an agreement if Minnesota decides it wants to take a "taxpayer-centric" approach. With Minnesota legislative action to provide basic fairness for its taxpayers, we are confident we can restore an agreement to promote taxpayer convenience in both states.

-- Chandler is Wisconsin's revenue secretary. The Wisconsin Department of Revenue helps formulate state tax policy, administers the state's major tax laws, collects individual and business taxes, and provides state financial aid to local governments.


Wednesday, September 26, 2012

Kathy Mangold: If you need them tomorrow, put them on your side today

By Kathy Mangold
An apple a day ...

An ounce of prevention ...

It's common wisdom that being proactive will help keep you healthy and screwup-free.

So have you tried proactive kindness?

If you ever need to enlist the aid of another, you'll get a whole lot further if you have an established, positive relationship to fall back on.

For those of us busy folks who don't take the time -- nothing's broke, so there's nothing to fix -- we may fail to reap the benefits that come from having a legion of allies.

A recent email I received from my son's teacher illustrated brilliantly how easy and effective a small act can be. It read:

"As we approach the end of the second week of school we wanted to share with you how impressed with our students we have been up to this point. They seem focused, motivated and arrive ready to learn. We know that most of this comes from you as parents so we wish to thank you for supporting us as teachers and sending your student to school ready to learn every day."

That was a great way to set the stage for a non-adversarial (dare I say collaborative?) school year.

In his training, Gary T. Klugiewicz draws a parallel between this proactive kindness and Malcolm Gladwell's concept of Priming the Pump, from the book, Blink.

In today's video Klugiewicz details why parents need to practice relationship-building with teachers, too.

And if it works in these situations, think of what it will do on the job. Your cubicle-mates will thank you today -- and have your back tomorrow.

-- Mangold is an award-winning newspaper reporter, magazine editor and freelance writer with degrees in journalism and German from Marquette University. She is a manager at the Vistelar Group, a speaking and training organization focused on the fundamentals of human interaction and their real-world application. Read her full bio.


Friday, September 21, 2012

Tom Still: Striking balance between free expression, 'hate speech' is Internet challenge

By Tom Still
In what kind of country would you rather live: One in which an Islamophobe with a criminal record is free to make a deliberately incendiary video, or one in which independent filmmakers of all stripes are routinely harassed by their government?

I'll take the former, thank you, even if it sometimes comes with tragic consequences.

The violent reaction to "Innocence of Muslims" in the Middle East has rekindled the debate over freedom of speech in a digital age. In an era when hate-mongers can post a low-budget movie on YouTube and incite riots half a world away, isn't it time to adjust the Internet's content filters so no one else gets hurt or killed?

Most Americans would agree the answer is "no," especially if the people playing with the control switches are from the government. The First Amendment to the U.S. Constitution has kept this nation open to all manner of political expression for nearly 225 years, and it's just as relevant today as it was when pen and ink were the primary forms of communication.

The more difficult question relates to how the Internet's major portals – such as Google (which owns YouTube), Facebook and Twitter – exercise their responsibilities in determining what goes online and what doesn't. What may surprise some critics is that all three of these companies take that role seriously, even if their internal rules differ.

The English-language version of "Innocence of Muslims" caused barely a ripple when it was posted online, but the Arabic version proved explosive. The film does not specifically incite violence against Muslims, although it mocks their religion, so Google initially concluded it was not "hate speech" under its terms-of-use rules.

Google later restricted access to the film in a few countries because of another company rule that bans content considered offensive to cultural norms. That decision may seem like a fine line, but it reflects the fact that every country has its own laws as well as its own definition of what constitutes hate speech.

Those kinds of decisions are made daily by Internet companies as they strike a balance between openness – an online value that has led to more democracy worldwide – and expression that is inflammatory. Those choices must take place in a world where not everyone with access to the Internet shares the American commitment to freedom of speech or our system of law.

While Google was weighing how to handle the anti-Islamic video, Facebook blocked links to the film in Pakistan due to that nation's anti-blasphemy laws. Facebook has some of the industry's strictest rules, including bans on pages set up by known terrorist groups. Its policies expressly prohibit hate speech and "content that threatens or organizes violence, or praises violent organizations."

Facebook users can report content they find objectionable, and Facebook employees then check it out. The company's underlying software also picks up key words that can be inspected by those same employees.

Twitter does not explicitly address hate speech but does prohibit "direct, specific threats of violence against others."

Some free speech advocates have argued that all expression, repugnant and beyond, should be allowed online. But others merely want the communications giants to act as discrete editors, policing the avalanche of content that comes at them every day and declining to post or blocking that which violates their own rules.

The Internet has proven to be a powerful force for democracy worldwide. That includes the Middle East, where the "Arab spring" uprisings might not have been possible without instant communications. And it is helping to slowly open up countries such as China, where independent filmmakers persist despite official sanctions for those who cross the line.

Because the Internet is a uniquely American innovation, it reflects American values such as freedom of expression. For those values to endure, the Internet's stewards must continue to exercise solid judgment in a world with conflicting standards and laws.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.


Friday, September 14, 2012

Tom Still: Town and gown -- Industry alliances on campus can drive growth, solve problems

By Tom Still
At a library that has served the UW-Madison School of Medicine almost since its birth more than 100 years ago, GE Healthcare executives and university researchers, practitioners and students gathered last week to unveil a $32.9 million partnership.

It wasn't the money alone that made the announcement unique. After all, the UW-Madison raises and invests about $1 billion per year on research and development, so a few million dollars more here or there on campus isn't necessarily news.

The 10-year partnership is significant because it represents a new level of collaboration between GE Healthcare and the UW-Madison, which have worked together for years to produce more than 200 invention disclosures, 80 patents and numerous license agreements. The agreement will help to launch, equip and staff a medical imaging facility that will move life-saving ideas from bench to bedside even more proficiently.

It's the latest Wisconsin example of a national trend – industry alliances with academia – that promises to speed commercialization of research while creating jobs and addressing human needs, from health care to engineered products to environmental science.

The GE Healthcare agreement with the UW-Madison School of Medicine and Public Health and the Wisconsin Alumni Research Foundation will mine research within the Departments of Radiology and Medical Physics, which have been rich veins of discovery for decades. Technology that led to the invention of magnetic resonance imaging, or MRI, came out of those labs in the 1970s and 1980s. Many of GE Healthcare's imaging technologies today were developed by company scientists working, shoulder-to-shoulder, with academic researchers.

Companies such as TomoTherapy (now Accuray), Novellos and NeuWave Medical have emerged from those same UW-Madison departments. Other technologies are poised to break out, either as license agreements, products or startup companies.

Similar examples exist within other Wisconsin universities, public and private.

The UW-Milwaukee announced a $3-million partnership with GE Healthcare last week to create a new center that will focus on software development for medical imaging. The UW-Milwaukee is also home to a "dry room" laboratory, supported by Johnson Controls, that is building advanced prototypes of advanced lithium-ion chemistry cells. Batteries produced in that lab, which is unique to the United States, will power hybrid vehicles or fully electric cars in the not-so-distant future. The Milwaukee School of Engineering, Marquette University and the Medical College of Wisconsin have established similar partnerships.

The advantage for Wisconsin is evident: Industry partnerships with academic researchers can help pull innovation off campus and into the marketplace, where it is more likely to help people and create economic benefits.

Wisconsin has more than its share of first-rate research institutions, but it has historically lagged in converting discovery into development. The process of technology transfer here has too often been a big "R" and a small "d."

Partnerships such as the GE Healthcare agreement with UW-Madison are helping to change that equation – and signal to other businesses that Wisconsin universities aren't just research silos filled with cloistered professors.

"Universities are one of the top three competitive differentiators in this country," said Robert Hess, who leads the consulting practice for Newmark Knight Frank Global Corporate Services. Hess was one of two primary authors of a 2010 study of the Wisconsin economy.

"Universities play a key role in our competitive ability to stay ahead of the Chinese and Europeans," Hess told Site Selection magazine last year. "We cannot afford for the walls to get thicker and higher between universities and our applied economy. University professors need to sit down with corporate vice presidents of operations and discuss issues."

That's happening in Wisconsin and elsewhere as universities realize such partnerships need not be entangling but can enhance faculty retention, improve student placement, sharpen missions and increase revenues at a time when public support for higher education has slipped. It's not a formula that works for all universities or disciplines, but it has leveraged the discovery process in applied sciences.

Policymakers who question the value of higher education should bear in mind the economic benefits that stem from public-private partnerships. For major companies such as GE Healthcare and Johnson Controls, it's a major reason why they still call Wisconsin home.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.


Thursday, September 13, 2012

Kathy Mangold: The perfect recipe for an apology

By Kathy Mangold
During my years as a food writer, I gained a real appreciation for a well-written recipe.

I've got a whole binder full of favorite recipes, and I treasure them because they are consistently delicious and foolproof.

Recipes provide a framework for success. And within the realm of communications, consider Verbal Defense & Influence strategies as templates that can be served up over and over again.

Take, for example, an emotional minefield like an apology. When someone is mad at you, disappointed or unhappy, you are a juncture where instructions would be handy. Because your response will calm down a situation -- or will lead you into a blazing fire.

Here are some pointers to walk you through the perfect apology:

1. Don't get emotional: Fight against the impulse to let your defensive mechanisms kick in. Your ego will want to surface and your ears will want to shut down. You might feel alternately like digging in, or running and hiding. Calm yourself down instead.

2. Be ready: Addressing conflict is a life skill to be cultivated and practiced. And now it's Showtime, so be confident -- because you have a plan.

3. Deflect: A Word Block is a phrase you should have at the ready -- "I can see that you're angry. I apologize if I've upset you."

4. Go Beyond Listening: Beyond Listening means that you are attuned to their body language, tone and their words Pay close attention, particularly to the meaning behind the words.

5. Paraphrase: They need to clarify, and you need to understand. Ask questions like, "Do you really mean that I am ...?" Once they hear their words back at them, they'll probably stop any theatrics, drama and overstatements to make sure you have the story straight.

6. Summarize: You have an idea of the problem. Summarize the issue and now you can start a dialog.

It might mean explaining your point of view, or it might involve another apology. But you've set a constructive framework for moving forward.

Being confronted with anger or disappointment provokes powerful emotions. But you have a choice: Snap back or have a strategy.

-- Mangold is an award-winning newspaper reporter, magazine editor and freelance writer with degrees in journalism and German from Marquette University. She is a manager at the Vistelar Group, a speaking and training organization focused on the fundamentals of human interaction and their real-world application. Read her full bio.


Friday, September 7, 2012

Tom Still: Finding Wisconsin is becoming easier for investors, technology scouts

By Tom Still
One of my favorite pop quizzes for people outside Wisconsin, especially those who understand the tech-based economy, is to ask them to name the nation's top five academic research universities. The answers invariably include the likes of Stanford, Yale and Harvard, but rarely does anyone outside the Midwest guess that UW-Madison is perennially on the list.

(Want to play along? Read on to learn which other universities rank in the top five.)

Maybe the Harvard and Stanford guesses are evidence of bicoastal bias… but more likely it's an enduring marketing challenge at home. Wisconsin is known for the Green Bay Packers, beer and cheese – all great things to be known for – but we're still building the brand when it comes to technology.

Some recent and upcoming events demonstrate how Wisconsin's tech sector, from its researchers to its emerging companies to its investors, is making its way on the national radar screen. The state's tech brand won't be built overnight, but there's been more than anecdotal progress as investors and others discover its assets. Some examples:

* This week's Resource Rendezvous in Madison attracted federal technology scouts from the National Institutes of Standards and Technology, the Department of Homeland Security and the Army's Telemedicine and Advanced Technology Research Center. Also on hand to meet with researchers and young companies were representatives of General Dynamics, a defense contractor with interests ranging from vehicles to medical simulation to cybersecurity. They came to Wisconsin knowing they might find some of the tech-based items on their shopping lists.

* Milwaukee and Madison are among a handful of stops planned for a U.S.-China Investors' Week in late September. The PiYi Investment Management Co. Ltd., which represents private investors in China, selected the state for a stop on its national tour of emerging companies. It's a tangible result of a recent trade mission to China that involved the Wisconsin Economic Development Corp.

* The Association of University Research Parks will hold its international conference in Madison in late September, drawn by the presence of University Research Park. Representatives of 200 research parks in the United States and beyond will take part. "University Research Park is viewed as the gold standard for university-affiliated research parks, and we're thrilled others will have a chance to see why," said Mark Bugher, the park's director.

* The Medical College of Wisconsin continues to draw international attention for its sequencing of the genes of a young Monona boy who suffered from a mysterious gut disease. In one of the first cases of its kind in the world, the Wisconsin team used information from the boy's genetic code to treat his illness. The case has been featured on NOVA, the Public Broadcasting System's science series, and cited in congressional testimony by Francis Collins, who heads the National Institutes of Health.

* Four Wisconsin companies with ties outside the state reported encouraging news in the last week alone. Madison's NeuWave Medical raised $14 million in a round led by H.I.G. BioVentures, which invests globally, and NorthStar Medical Technologies raised $5.2 million in a round led by Illinois investors. Epicentre, which was acquired by California-based Illumina in 2011, announced it will expand its footprint in Madison. So did Aldevron, based in Fargo, N.D.

* Some of Wisconsin's oldest companies, such as GE Healthcare and Johnson Controls, have become technology leaders in their fields. So are some more recent additions to the fold, such as Epic Systems, Promega, Logistics Health and Orion Energy.

As Wisconsin policymakers renew the debate over creating a state-leveraged fund to lure private dollars and invest in early stage companies, they can draw comfort from the fact it won't be a "build-it-and-they-will-come" exercise. The foundation for increased national and global attention in Wisconsin's young tech and knowledge-based companies is there. All that's needed are more success stories to keep building the brand.

Now, the quiz answers: The UW-Madison ranked third in academic R&D spending in the latest report from the National Science Foundation, joining Johns Hopkins (1st), the University of Michigan (2nd), the University of Washington (4th) and Duke (5th) at top. Stanford (9th), Yale (24th) and Harvard (31st) were down the list.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.


GreenBiz: Food Enterprise Center provides wide-open opportunities

By Gregg Hoffmann
VIROQUA - When many people walk through the 100,000 square-foot former NCR building that now houses the Food Enterprise Center, they undoubtedly see wide-open spaces. Sue Noble sees wide-open opportunities.

"We are in the very early stage of operation," said Noble, the executive director of the Vernon Economic Development Association and the spearhead behind the purchase of the building and development of the FEC.

"Our first tenants have moved in and are operating from here," Noble said. "We have space for many more, and interest from additional entrepreneurs and companies. There are opportunities here."

The Food Enterprise Center currently has about 20 employees and three tenants leasing about 20,000 square feet in the building:
* Keewaydin Organics processes, stores and distributes organic food products from about 70 producers;
* Lu Sa Organics, run by Rachel and Pete Wolf, makes soap products and lotions, which are made from food ingredients and distributed regionally and globally;
* Fifth Season Cooperative is a multi-stakeholder cooperative made up of producers, producer groups, food processors, distributors, and buyers from the 7 Rivers Region.

"Keewaydin started on a farm, Lu Sa in a basement of a home," Noble said. "They have the space and opportunity to grow their businesses here."

Noble is talking with potential tenants all the time. "It comes in waves," she said. "At one time, I had about 20 people interested. Right now, I have about six others at various stages of planning and development."

The center was funded largely by a $2 million U.S. Economic Development Administration grant to the city of Viroqua and VEDA. That grant was announced in September of 2010.

Many months were spent in planning, meeting requirements of the federal government and others for a food enterprise and converting a manufacturing plant into a facility that could be used for local food initiatives.

The effort has attracted attention. Noble received a Champion of Change award from the White House in 2011. U.S. Ag Deputy Secretary Kathleen Merrigan visited in April of this year. Small Business Administrator Marianne Markowitz visited in July.

Fifth Season and FEC have been featured in the Rural Cooperatives magazine and other media. Fifth Season also has drawn interest because it received the largest Buy Local Wisconsin Grant in 2010, a $40,000 grant for starting up.

Representatives of the Fifth Season and FEC were among 150 cooperative leaders from all sectors of the economy and across the nation who met with top policymakers at the White House earlier this year.

"This is a local food initiative, yet part of a nationwide movement," Noble said.

Fifth Season is run by operations manager Diane Chapeta, who came to FEC about a year ago from the Farm to School movement in eastern Wisconsin. She has 27 years experience in food service.

"We primarily aggregate, coordinate and broker from here," Chapeta said. "Some of our producers send their produce here to be distributed. Others work from hubs we have in our 150-mile radius of operation."

Fifth Season doesn't own a truck. Instead, it works through Reinhart FoodService, based in La Crosse, which picks up produce on the back end of its routes and distributes it.

"The trucks are empty after they make their deliveries from Reinhart, so this way they are full on their return trips, We and Reinhart benefit from the arrangement," Chapeta said.

Drought conditions have affected many of the farmers that are working with Fifth Season. Most will survive, but some have lost crops. "Carrots and onions have been difficult to get," Chapeta said. "Apples have been just about impossible."

Customers for Fifth Season include restaurants, delis, grocery stores and institutional markets, such as schools, day and senior care centers, government institutions, hospitals and others. Gundersen Lutheran, Vernon Memorial Healthcare, UW-La Crosse, Western Technical College, Viroqua Area School District are just some of the institutional buyers.

Fifth Season plans on processing, storing and distributing more produce from the Viroqua center over time.

Ridge Top Foods, run by Jonah Curley, will soon move into the FEC and run a kitchen at which value-added food products will be produced and distributed.

"If you want to sell Grandma's jam commercially, Ridge Top will be able to produce it here from your recipe," Noble said.

While Noble acknowledges there still are some open spaces to lease in the FEC, she believes more and more food entrepreneurs are learning about the center and see the opportunities within it to join a national and global trend. Noble is not alone in her belief.

When Merrigan visited, she cited a a recent National Grocers Association poll that showed that 85 percent of consumers said having locally-grown products was "a major factor in where they decided to shop."

"From the small food co-op and corner store to the Wal-Marts of the world, everybody is getting that this is the biggest food trend that we've seen in decades," Merrigan told the Vernon County Broadcaster. "There's money to be made, jobs to be grown and we should be all in it."

-- Hoffmann, a veteran journalist and author, writes Green Biz monthly for http://www.wisbusiness.com.


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