A program that helps small and mid-size manufacturers gain operating efficiencies is expected to regain state funding through legislation that could save the organization.
Bipartisan support has arisen for Assembly and Senate legislation that would restore state funding to the Wisconsin Extension Manufacturing Partnership (WMEP) – funding that was slashed last year under state budget pressures.
WMEP has been surviving by tapping into financial reserves. But that can’t continue, according to Mike Klonsinski, its executive director.
"We’ve gone a year basically picking up the state’s portion" of the WMEP budget, Klonsinski said after an Assembly committee hearing on funding. "We’ve been using our reserves, but we can’t continue to do that."
While demand for its services has increased as foreign competition has hammered Wisconsin manufacturers, WMEP has lost federal and then state funding. Last year’s state budget cut WMEP’s funding for 2004 from $1 million to $100,000.
In 2003, WMEP generated 40% of its budget from customer fees, with the federal government providing 33% of its revenue and state and local partners the other 27%.
The public financing allows the organization to offer consulting services to smaller manufacturers at fees more affordable than the private market would offer.
Klonsinski says the government financing is a good investment, since WMEP’s work often leads to business and job growth that, ultimately, means more tax revenue for the state and federal governments.
Last year, 471 Wisconsin manufacturers reported $90 million in higher sales and $23 million in lower costs as a result of WMEP-driven improvements.
A similar organization, Northwest Wisconsin Manufacturing Outreach Center, sees similar results, according to state Rep. Terri McCormick of Grand Chute in Outagamie County, calling the statistics "nothing short of amazing" during the hearing. "I have no doubt that what we put into WMEP will be returned to the state 10-fold," she testified. "Last year, customer-reported results yielded an estimated $11 million in tax revenues for Wisconsin."
McCormick sponsored the funding restoration bill, AB 859, with 35 bipartisan co-sponsors. The legislation calls for allocation of $1 million in state revenues to WMEP this year and $1.5 million next year, coming from the state’s general purpose revenue pot.
State Rep. Ann Nischke of Waukesha, a member of the Assembly Committee on Economic Development, chaired the hearing and co-sponsored the bill.
Nischke said the funding restoration has the support of Gov. Jim Doyle and would likely pass the Assembly. That must be done by March 11. A companion bill in the Senate also enjoys bipartisan support.
But even if the state restores funding, Nischke pointed out that federal dollars are harder to come by these days. "So the catch, of course, is that it does take federal and state dollars to make this work. And we are hoping those federal dollars are preserved."
Sen. Herb Kohl is leading efforts among the Wisconsin congressional delegation to restore funding at the federal level for the national Manufacturing Extension Partnership program.
Klonsinski is "cautiously optimistic" that the WMEP will survive. "We’ve done everything we’re supposed to do, and we are still on track" to have funding restored, he said. "Everybody realizes that manufacturing is important to Wisconsin, and that WMEP has been very effective in making it stronger. We understand very well that there are limited resources out there, but when you look at the results, we believe that what WMEP does stacks up very well" in the battle for those dollars.
March 5, 2004 Small Business Times, Milwaukee
