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ZBB Energy, a Menomonee Falls based green energy company, is in a race to bring new green technologies to market as it finds itself in the center of the debate over whether government financial assistance can launch and sustain a green economy here in the United States.

President Obama visited ZBB Energy back in August of 2010 to promote the green economy and why the federal government should step in to get this sector of the economy off the ground.

“At this plant you’re doing more than making high-tech batteries.  You’re pointing the country towards a brighter economic future,” Obama said.

During his visit, President Obama vowed to create 800,000 green energy jobs by 2012.

ZBB Energy makes batteries specifically designed to store electricity from renewable sources. At least, that’s the plan.  ZBB Energy is in the middle of a major overhaul and currently does not have any products on the market. It plans to launch a new line within weeks.

“The product we’re developing will be the only storage device like it in the world,” Will Hogoboom, CFO, told MacIver News. “We’ve already closed orders for the new product even though it’s not in production.”

Investors and the stock market have not always appeared to share in the President’s optimism.  ZBB Energy stock ended the year at 71 cents a share. The day of Obama’s visit, the stock closed at $.70. Some believe investors are generally weary of green energy companies, especially startups, because these companies have high risk: they incur high overhead and generate low revenue while they attempt to develop new technologies that may or may not be profitable.

That’s where federal and state governments step in, providing those companies with massive tax breaks and loans. Many companies state in their SEC filings they could not survive without this preferred treatment. However, as we’ve seen, government favoritism is not a guarantee of success.

Solyndra, a solar panel manufacturer in California, received a $535 million loan guarantee from the Department of Energy in 2009. Two years later the company was out of business.

ZBB Energy has received significantly less help from the federal government than Solyndra. In June, the IRS awarded it a $14.7 million Clean Energy Tax Credit.  In 2009 it received a $1.3 million stimulus loan.

The stock market has been a consistent challenge for ZBB Energy. In December 2010, AMEX notified ZBB its shareholders’ equity was below the minimum $4 million required to continue being listed. This December, the company announced its shareholders equity was at $4.1 million and it was back in compliance.

However, ZBB’s stock still trends downward. It closed at $5.80 on June 18, 2007, three days after the company executed a 1:17 reverse split. Since then, it’s been downhill. On December 20, 2011 it closed at 74 cents a share and has not broken $1/share since September.

Courtesy of NASDAQ.com

ZBB’s market trouble is reflected in its SEC reports. Its Q3 revenue was at $1.637 million. ZBB’s payroll alone was $60,000 more than that. The total operating loss was $1.696 million.

The company hopes to turn all this around with the release of a new line of batteries, which are in the final stage of testing.

“Once we start actually producing and shipping, it will mean the world to us,” Hogoboom said.

The company has also added a number of new employees. At the time of its overhaul two years ago, ZBB employed 25 people. Today it employs about 60 people and has 7 open positions.

Over the past few months, while developing its new product, the company has also been forging new partnerships. In fact ZBB is opening a new factory in China in the next few weeks.

On December 15th, ZBB announced a new joint venture partnership with an unnamed “global technology company,” to help in product development. That partner is investing $800,000 in the project, and bought $700,000 of ZBB stock.

Company insiders appear to be confident. Hogoboom bought 14,000 shares on December 13. Buoyed by the government investment in the firm, investors purchased 1,307,860 shares over the last six months, all at market value.

To achieve President Obama’s goal to create 800,000 green energy jobs by 2012, the federal government has invested heavily in companies like ZBB. Yet, there is presently no official way to verify the success of such job creation efforts since the Labor Department does not track green jobs. The Bureau of Labor Statistics is in the process of conducting a survey to find out exactly how many green jobs there are in the country and hopes to have that complete by the middle of this year.

Meanwhile, announced expansion projects, a new product line, and large stock purchases have not been enough to give non governmental investors in the market confidence in this green energy “startup.” ZBB’s stock opened at 78 cents a share on December 15, 2011 and closed at 81 cents a share on Jan. 13, 2012.

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[MILWAUKEE] The Milwaukee teachers’ union wants area businesses to donate $94 million to solve the district’s financial problems, hoping that will save some of the 519 jobs to be lost on Friday.

Milwaukee Public Schools announced the layoffs on Wednesday.  Dr. Gregory Thornton, MPS superintendent, said at least 200 teachers’ jobs could be saved if the union would have agreed to a 5.8 percent pension contribution from its members.

“We will move into a new school year with a big loss of a lot of talent and a lot of strong educators,” Thornton said.

Of those laid off, 354 are certificated teachers.  Thornton said the district was prepared to weather losing $100 million in stimulus funding, but not the loss of tens of millions of dollars in state funding.  He said as a result of the layoffs, class sizes will be larger, there will be fewer textbooks and fewer summer opportunities.

“The children are being caught in the middle of this,” he said.

Thornton anticipated some of the district’s financial problems earlier this year and, at that time, asked the union for a 1.5 percent pension contribution.  The union said no.

“We must have our union partners at the table,” Thornton said Wednesday. “Yes, we want to keep more teachers on the job, but I am also thinking about our kids.  If we can retain more teachers, we can prevent class sizes from increasing.”

Although the union was not willing to give on the issue of pension contributions, it did direct the district to lay off the most recent hires.

“District administrators worked closely with the teachers’ union to identify candidates for layoff by seniority, following the terms of the negotiated contract,” said Roseann St. Aubin, MPS communications director.

That contract, negotiated last fall, already will ‘save’ the district $94 million over the next two years, according to the Milwaukee Teachers’ Education Association.

“We call on community stakeholders, particularly the business community, to step up and help solve the district’s immediate budget crisis by matching the $94 million,” said Bob Peterson, MTEA president.

MTEA places the blame for MPS’s financial problems solely on Governor Scott Walker and Senator Alberta Darling, co-chair of the Joint Finance Committee.  Darling is the subject of a recall election in July.  The other co-chair of the committee, Representative Robin Vos, is not named in the union’s press release. He is not facing a recall election.

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MacIver News Service | June 26, 2011 | Updated 5:30 pm

[Green Bay, Wisc…] Stressing the desire to create a better jobs climate in Wisconsin, Governor Scott Walker today signed the 2011-13 budget at a Green Bay manufacturing plant.

The budget balances a $3.6 billion deficit without raising taxes and, Walker says, continues to support critical services, while promoting job growth and investing in education.

“Our balanced budget makes tough choices while providing a path to recovery and prosperity for our state and our people,” Governor Walker (R) said at Fox Valley Metal-Tech.  “Through honest budgeting, we are showing the way forward.”

Walker’s plan received high praise from Wisconsin’s business community.

“Governor Walker and legislative Republicans deserve tremendous credit for making tough decisions to balance the state budget without raising taxes,” said Kurt R. Bauer, President/CEO of Wisconsin Manufacturers & Commerce. “The budget provides greater certainty for business executives and that should encourage job growth.”

Still Photo Captured from YouTube Video of Budget Address

The budget eliminates the state’s $3.6 billion deficit. Only seven states in the nation faced larger per capita deficits than Wisconsin.

“Just as any parent would dread leaving their kids in debt, it is the dream of every father and mother to leave their children a little better off, and that’s what our budget will do,” said Governor Walker.

The governor issued 50 revisions to the plan legislators sent him, although the controversial restrictions on craft brewers survived his veto pen.

In part, Walker:

• Vetoed a provision allowing Milwaukee police officers to be paid while appealing dismissal
• Eliminated the provision restricting public access to officials’ economic interest statements
• Cut the $10,000 in segregated fees earmarked to the Aerospace Authority in Sheboygan
• Issued a partial veto regarding WiscNet that will prohibit UW System from competing with private sector businesses in telecom services and removes the ability of the Joint Committee on Finance to waive deadlines
• Vetoed the requirement that all child care providers submit fingerprints to state and instead will seeks rule change to mandate for those providers participating in Wisconsin Shares

The governor’s full veto message can be found, here:

Walker highlighted the plan’s property tax freeze, which he says will save the average homeowner over $700 dollars over the next two years.

“It is my hope that due to this budget, thousands of Wisconsinites can breathe just a little bit easier and not worry about how they’re going to stay in the home they love,” said walker.

The budget also includes a manufacturing tax credit and capital gains tax credit aimed at creating jobs in Wisconsin.

While legislative Demcorats were critical of the spending cuts in the plan, Republicans were adamant that the budget continues support for BadgerCare, Medical Assistance, and SeniorCare. They say the budget allocates an additional $1.2 billion into the state’s Medicaid program and the note that nearly all new revenue the state receives over the next two years will go to the Department of Health Services.

“The budget signed into law today by Gov. Walker that shamelessly attacks Wisconsin’s shared values and middle class families is certainly a dark chapter in our state’s proud history,” said Assembly Minority Leader Peter Barca (D-Kenosha) in an online post Sunday. “We must continue to tell the stories of struggling middle-class, working Wisconsinites that will suffer additional hardships as a result of Gov. Walker’s poor budget choices and his assault on worker rights.”

Despite $800 million in cuts to aid to local school districts, Walker says the budget continues to prioritize education.  Public K-12 schools are the single largest expenditure in the budget, he notes, and the state will also begin a new statewide student information system which will allow for real-time state-wide data collection from schools on everything from course grades to attendance.  That will allow for better tracking of students and better accountability metrics for teachers, administrators, and schools, supporters argue.

The Governor’s budget also expands Choice and Charter schools, removing the enrollment caps on the state’s online public virtual charter schools and the Milwaukee Parental Choice Program, while beginning a choice program in Racine.

In his budget remarks, the Governor expressed optimism that the tumult of recent months in Madison could be a thing of the past.

“The recent debates in Madison found us spending too much time focused on our differences, rather than our similarities,” Walker said. “But today we turn the page.”

Barca, however, signaled that the acrimony is likely to continue.

“To take back our state legislature and to build our case for recalling Gov. Walker and Republican senators in the months ahead, we must continue to pull back the shroud of darkness and secrecy they have imposed on our state – we have to provide the sunlight that will ultimately disinfect Wisconsin of their radical and misguided agenda,” he wrote.

Yet, Walker said his experiences hearing from the families of Wisconsin gives him reason to be optimistic.

“We may disagree on the issue of the day, but we always find a way to unite and reach out when it means helping our neighbors in need; or inspiring our children to achieve success,” said Walker.

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The 2011-2013 Budget for the State of Wisconsin is the most fiscally responsible two-year Badger State spending plan in at least a generation. It pays the bills, is short on accounting gimmicks, restrains spending and includes measures that will improve government efficiency and invigorate the private marketplace in order to help individuals and businesses here create jobs.

It is a good budget.

That being said, it could be better.

The document forwarded by the legislature still contains onerous interference into the private market. Program cuts that could have been made were modified for political expediency. And, although it has a dramatic decrease in earmarks over budgets past, is not pork free.

In a perfect world, we would see vetoes on the following items:

1. Craft brewers are gaining market share because they are meeting a consumer demand. The Legislature has no business restricting the production and marketing of a good or service on the basis of the size or scope of the actors involved.

2. On SeniorCare, the governor got it right the first time. The legislature’s moves added unnecessary expense to the budget. There is no sound reason Wisconsin’s seniors enrolled in the program shouldn’t first exhaust federal remedies, such as Medicare Part D. We are the only state in the nation with a stand-alone drug entitlement program for the elderly.

3. At a time when we are empowering management in their dealings with government labor, tying the hands of the Milwaukee Police Department makes neither fiscal nor ideological sense. The proposal that mandates that suspended officers receive pay during termination appeals has no place in state law, or this budget.

4. The legislature meddled when it decided to create an individual income tax deferral for investments in Wisconsin businesses. Why do they insist on picking winners and losers? Does the Legislature really believe an investor will commit his/her retirement savings to a Wisconsin business because the government will hand out a modest break on the capital gains? Investment of capital flows to attractive projects and businesses regardless of geographic boundaries.

5. The recycling mandate and its 19 million dollar price tag should end up back on the scrap heap. If a government entity believes a service is necessary, it should pay for it.

6. State taxpayers should not subsidize high-speed broadband internet access. WiscNet should not be a government priority. Private service providers are fully capable of meeting this need without government competition.

7. We would have preferred to see zero dollars in bonding authority for the purchase of more land via the Stewardship Fund. The legislature significantly cut Walker’s request but they should have eliminated it all together. The state owns enough land.

8. And while it will not happen, you would not hear us howl if the veto pen was used to make the School Choice plan available to all families statewide. We need an education system whose sole focus is the education of the child, not artificial boundaries or the status quo.

9. This budget modifies state law to make it easier and less expensive for government to exercise eminent domain in a few specific cases. It’s a needless increase in the ability of the state to interfere with property rights. If changes to the state’s eminent domain law are truly warranted, they should be considered as a separate piece of legislation, not in the budget.

10. Finally, the pork and earmarks remain a thorn. As we said earlier, this is hardly a pork-laden document like the Doyle budgets of the last decade. Nonetheless the habit has proven hard to break. And while this list is not comprehensive, worthy or not, these projects deserve to be line-itemed out.

• The elimination of the state per diem limit for sewerage district officials
• The new position at Crex Meadows Wildlife Education Center
• The $10,000 for the Sheboygan Aerospace port
• $300,000 for the Bay Area Medical Center in Marinette
• $25,000 for the Copper Falls State Park in Oconto

The State Budget is a solid plan. The best this state has seen in decades. It eliminates the structural deficit that has plagued this state for the last three administrations. But why settle for good?

Governor Walker will announce his vetoes on Sunday. Clearly he could make the plan even better.

[Madison, Wisc...] Wisconsin workers filled 20,000 fewer jobs in the final month of the Doyle Administration than they had in November.

The total number of jobs in Wisconsin decreased by 1,200 seasonally adjusted, including 1,900 fewer private-sector jobs. However, without seasonal adjustment, the total number of jobs dropped by 20,200, including 16,500 fewer jobs in the private sector and 3,700 fewer in the government sector.   

The Wisconsin Department of Workforce Development’s monthly report for December 2010 indicated that, in seasonally-adjusted terms, 427,300 individuals worked for local, state and federal government, while there were 431,900 manufacturing jobs in Wisconsin.  Non adjusted numbers reflect a flip with 436,700 government jobs and 434,200 employed in manufacturing.

“[T]he numbers underscore the need for aggressive policies that help grow our state’s economy, help employers create jobs and help get  Wisconsinites back to work,” DWD Secretary Manny Perez said. “Congratulations to Governor Walker for proactively showcasing Wisconsin at the national level and initiating legislative policies to improve the business environment in Wisconsin.” 

The state legislature is in the midst of a special session on jobs, called by Governor Walker on the day he was inaugurated.  In addition, the governor has appeared in several national media outlets in the wake of large tax hikes passed by the Illinois legislature this week.

The Wisconsin employment figures reflect the final month of Governor Jim Doyle’s administration. Walker has pledged to help bring 250,000 new jobs to the state by the end of 2015.

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[Madison, Wisc] The finishing touches are still being made on the Scott Walker’s jobs agenda for the ongoing emergency Special Legislative Session, but the  state’s chamber of commerce likes what it sees so far.

Wisconsin Manufacturers and Commerce has launched a statewide radio advertising campaign by which it promotes the Walker jobs agenda.

The radio spot proclaims, “There’s good news on job creation,” before encouraging citizens to contact their lawmakers to voice their support.

“People need to let their legislators know their constituents support Governor Walker’s jobs agenda,” said James Buchen, vice president of government relations for WMC. “Governor Walker has taken the lead on improving our business climate with tax cuts, regulatory reform, curbs on lawsuit abuse and other proposals. Now, lawmakers need to hear from the folks back home.”

While some bills are still being drafted, yesterday Walker released the legislative language of proposals that would:

• Place limits on manufacturers’ liability to products that were manufactured, distributed, sold, or promoted within 25 years before the date the injured party’s cause of action accrues
• Make several changes to current law regarding civil actions for negligence in long?term care facilities product liability, punitive damage awards, and awards for defending a frivolous lawsuit
• Discourage plaintiffs from filing frivolous claims, caps non-economic damages for medical malpractice, and protects the confidentiality of best practices peer review information
• Create a non-refundable tax credit for income deposited in a health savings account
• Exempt businesses from income and franchise taxes for two years for businesses that have done business in Wisconsin for ten years or more
• Increase the amount available for economic development tax credits from $75 million to $100 million
• Require a Super Majority of 60 votes in the Assembly and 20 votes in the Senate to pass any bill that raises taxes

In addition, Governor Walker has previously announced he’ll also forward proposals to offer tax relief to small business owners and to  revamp the state’s Department of Commerce.

“The time to act is now,” Buchen said. “We need to unleash the job-creating potential of Wisconsin employers by improving our business climate,” Buchen said.

Legislative committees will begin deliberating on some of the proposed jobs bills next week.

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MacIver News Service |  November 24, 2010

[Madison, Wisc...] Wisconsin again ended last month with more people working in government than in the manufacturing sector.

The Wisconsin Department of Workforce Development’s monthly report for October 2010 indicated that, in seasonally-adjusted terms, 435,100 individuals worked for local, state and federal government, while there were 434,700 manufacturing jobs in Wisconsin.  Non adjusted numbers reflect an even larger gap with 431,100 government jobs and 426,700 employed in manufacturing.

Wisconsin’s seasonally-adjusted unemployment rate remained unchanged from the previous months 7.8 percent.

In a release issued today, Department of Workforce Development Secretary Roberta Gassman put a positive spin on the state’s employment situation.

“Compared to a year ago, unemployment rates are down in every metro area, nearly every major city and all but five counties,” Secretary Gassman said. “We are encouraged by signs of recovery, but we have more work to do to help job seekers across the state find employment.”

DWD noted that fourteen of Wisconsin’s 72 counties had lower rates than September and another 18 had no change.

What the release didn’t highlight, but an accompanying chart indicated, that means 40 counties saw a jump in the unemployment rate from the previous month.

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The next 60 days should bring a sea change to Wisconsin’s anti-job creation, anti-innovation labor laws.

And it would not be a moment to soon.

In January a new Governor and Legislature will take office facing a state deficit as high as $3 Billion.  The current Governor and Legislature increased Wisconsin taxes-primarily on businesses and investors-to the tune of $2 billion. We provided more details about this disaster in our $13 Billion of Bad missive.  Such a burdensome tax load cannot be sustained.

Two simple but fundamental steps to kick start the Wisconsin economy and get our state budget mess resolved would be to repeal collective bargaining for public employees and to make Wisconsin a right to work state, giving private sector workers the choice of whether they want to pay union dues in their workplace.

Taxpayer advocates should champion both causes and praise and assist those who work to advance them.

Repealing collective bargaining rights for government unions may seem a tall order, but not when you consider history.  The concept of collective bargaining by public employee unions is not some century-old part of Wisconsin’s foundation. We became a state in 1848.  The State of Wisconsin did not enact a collective bargaining law until 1959, led by then-Governor and later liberal U.S. Senator Gaylord Nelson.

Nelson’s efforts fifty years ago made Wisconsin the first state in the nation to pass such sweeping legislation governing public sector labor relations and followed the lead of New York City.

One of the very first politicians to muscle through collective bargaining for public employees was New York’s Mayor Robert Wagner who did so in 1958, a move seen by many at the time as a political trade off to ensure his re-election.  In 1962, President John F. Kennedy followed suit, allowing, for the first time, collective bargaining by employees of the Federal government.

Since those moves in the middle of the 20th Century, the cost and scope of government in the United States has grown exponentially. Government employs more, attempts to do more, involves itself more and more into previously private matters and consumes larger and larger amounts of private sector wealth to fuel this binge. This growth is fueled by the influence of public employee unions, who gain their power through taxpayer paid union dues, which in turn are used to leverage policies that lead to the increase in the size, scope and cost of government, which means more public employee union members, which means more union dues and the cycle continues.

The result?

We now have more government jobs than manufacturing jobs in Wisconsin.

We used to be a state where we make things. Now we are a state that makes excuses for why the government behemoth cannot be tamed.

That must change.

In recent decades the strength of organized labor has shifted from the private sector manufacturing and service sectors to governmental workers’ unions like AFSCME and teachers unions like AFT and WEAC.  While this shift has occurred, the role of union funding in state and national elections has continued to grow, often making unions and trial lawyers the principal funders of  campaigns from the president right on down to legislative races.

Herein lies the problem with public employee unions: They determine the fate of their own bosses who in turn have dominion over their compensation. Public employee unions skew the labor-management equation through their political muscle and the fact that their contracts are approved by the very same politicians for whom they vote. Therefore, they have the power to perpetuate and accentuate their own wage and benefit structures at the expense of the taxpaying public.

Building painters in school districts with annual compensation packages of more than $98,000 and bus drivers making six figure salaries that translate into benefit-rich pensions are part of the driving force in the budget problems facing Wisconsin.

Unfunded and underfunded pension and retiree health care liabilities are ticking time bombs at every level of government.

Wisconsin’s state budget doubles the trouble. As a matter of public policy Wisconsin lawmakers have chosen to fund a great deal of local governments’ and schools’ budgets as a means of controlling property taxes. Yet, as school boards and local government employers lack the tools and the will to control wages and benefits, these expenses skyrocket.

If step one in the road to Wisconsin’s fiscal recovery is for government, as the employer, to be able to take back control of employee compensation by getting rid of public sector collective bargaining then step two is for Wisconsin to become a right-to-work state.

Federal law allows states the option to adopt right-to-work laws, which means that employees who go to work for a company that has a union can choose not to become a member of that union and to pay those union dues. Twenty two states are currently right-to-work states, and Missouri and Indiana are seriously considering right-to-work laws.

States without right-to-work laws permit the coerced payment of union dues. Whether you want a union or not, you are going to pay union dues, and even have those dues go to the support of candidates that you oppose, in non right-to-work states. More and more, younger workers want choice in their work environment, and they want the merit of their work to matter.  By rewarding time in service over competency, unions take advantage of those just entering the workforce, they stifle employee choice, and they ignore merit for all workers through convoluted work rules and seniority systems in the workplace.

Private sector labor unions occupy a unique place in American law and society.  They are the only entities, by law, that are exempted from anti-monopoly laws, that are given the power of coerced representation, and that receive millions of dollars from the Federal government in direct grants, and billions to state entities with heavy union representation that provide worker training.

The only counter balance to all of this is in those states that at least give workers a choice whether or not to support the union in their workplace with union dues from their hard earned wages. Again, this isn’t some crazy, untried concept. Nearly half of the states recognize this form of workers’ rights–and they continue to grow their economies and outperform those states that have not adopted right-to-work laws.

Coming off the heels of the most irresponsible, pro-labor union legislative sessions in my lifetime, it’s time for bold moves in Madison. This isn’t about payback, or leveling the playing field. No less than the financial solvency of our state and local governments may depend on these two measures.

The new Governor and Legislature can unleash Wisconsin’s private sector employers and their workers from forced unionism by adopting a right-to-work law, allowing workers the choice to become part of a union, or not.

The alternative is to continue to operate Wisconsin’s state government the way we have for the last several decades and expect different outcomes on the balance sheet.

The end of public sector collective bargaining, and the adoption of the right to work in the private sector are the kinds of fundamental change that will get Wisconsin’s state budget and her economy back on track.

California may be the worst example of a state adrift, but it is not alone.

Wisconsin is on the verge of fiscal insolvency.  Tinkering won’t suffice.