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 In the years since, Walker has cut state taxes by $2 billion as
his state has climbed out of recession. Unemployment in Superior now
stands at 4.6 percent, down nearly by half since Walker took office.
New businesses are opening downtown and the waterfront docks are
humming.
As he lays the groundwork for an expected presidential bid, Walker
says his tax cuts are a driver of his state's recovery - a big
selling point in a crowded Republican field that includes several
other current and former governors.
But ask local officials and business leaders, and they will say
Walker's policies have little to do with a turnaround that has moved
in tandem with the national recovery. Tax cuts haven't lured many
businesses across the bridge from Duluth, Minnesota, they say, while
the loss in revenue has prompted steep spending cuts to education,
harbor maintenance and road construction.
For some, the tradeoff is not worth it.
"We should put the $2 billion in roads or education," said Superior
Mayor Bruce Hagen, a self-described conservative.
 SUPERIOR VS DULUTH
At best, taxes are a secondary consideration to more tangible
concerns like real estate and road conditions, according to six
local officials and seven business executives who spoke to Reuters.
Walker's office declined to comment on the economic situation in
Superior but pointed to the state's plunging unemployment rate and
improved ranking in surveys of corporate leaders as evidence that he
has made the state more attractive for business.
"Governor Walker's policies are working," spokeswoman Laurel Patrick
said.
Walker has made no secret of his desire to lure businesses across
the border from Minnesota, where Democratic Governor Mark Dayton has
hiked taxes. Superior should be poised to benefit: the city of
27,000 has access to the same freeways and port facilities as
Duluth, without the steep hills that make construction more
expensive on the Minnesota side.
There are plenty of vacant storefronts along Superior's main street,
where one bar advertises "BINGO EROTIC," and space is also available
in weedy plots near the waterfont, where rust-colored freighters
load up on coal and iron ore.
The tax difference between the two cities is dramatic. Manufacturers
will see their corporate tax rate drop to 0.4 percent in Wisconsin
in coming years, compared to 9.8 percent in Minnesota. Wisconsin
firms also pay less in unemployment insurance, workers' compensation
and sales tax, according to a comparison circulated by Walker's
economic-development agency.
Yet Superior isn't pulling ahead, according to U.S. Labor Department
figures. Private sector-employment in Superior grew by 5.6 percent
in Superior's Douglas County between January 2011 and September
2014, the last month for which reliable figures are available. In
Duluth's St. Louis County, jobs grew by 9.8 percent during that
period.
Meanwhile, the number of businesses in Douglas County declined by 6
percent - double the rate in St. Louis County.
 KICKING THE TIRES
Local officials say they score the occasional victory. A
Duluth-based pest-control company plans to break ground on a new
headquarters in Superior soon, and Jason Serck, the city's planning
director, says he's getting other queries. "I wouldn't call it an
influx - I'd call it a lot of tire-kicking," he said.
Photographer Michelle Sternberg said she was lured from Duluth by
cheaper rent and more parking. For Erin McFarland, an owner of the
artisanal yarn-dying business Three Irish Girls, incentives from the
city helped her make the move.
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Heavy-equipment manufacturer Exodus Machines considered expanding in
Minnesota but opted to add jobs in Superior after Walker's
economic-development agency secured a loan, said chief executive
Kevin Boreen. The tax difference between the two states wasn't a
factor, he said.
For entrepreneur Brian Huebner, state parks could determine where he
will set up a luxury-camping business that will feature candle-lit
yurts with pillowtop beds. While Wisconsin is raising entrance fees
to make up for funding cuts, Minnesota is building new hiking
trails.
"It's awesome to reduce taxes and all that, but at a certain point
does it take away from development?" he asked.
While tax cuts can be an effective way for the federal government to
pump more money into the local economy, they must be offset by
spending cuts at the state level, which undermines their impact,
said Dale Knapp, research director at the Wisconsin Taxpayers
Alliance, a nonpartisan research group.
"There's very little stimulative effect that you would see in the
short term from tax cuts," he said.
At least one company in Superior has put the tax cuts to good use.
With more money going to the bottom line, Kent Precision Foods Group
has hired an additional research scientist and a new machine to
bottle the thickened beverages it makes for people who have trouble
swallowing regular liquids. The company plans to double its staff to
40 thanks in part to incentives from Walker's economic-development
agency.
But chief scientist Doug Stetzer worries that Walker's education
cuts to the local university will lead to fewer biology graduates.
"When it comes to the bottom line, the tax cuts are great. When it
comes to my future..." He doesn't finish the sentence.
SLOWER JOB GROWTH
Wisconsin has largely mirrored the national economy as the United
States has climbed out of the deepest recession since the 1930s. The
state's unemployment rate now stands at 4.4 percent, below the
national rate of 5.4 percent.
But job growth has lagged. Private-sector employment grew by 6.4
percent in Wisconsin between January 2011 and March 2015, lagging
the national pace of 10.7 percent, according to the U.S. Bureau of
Labor Statistics. (Graphic: http://reut.rs/1GnlZsE)
Along the waterfront, Mike McCoshen surveys huge piles of limestone
and road salt unloaded from freighters plying the Great Lakes. His
company, Hallett Dock, tapped state harbor-maintenance funds to
expand its operations in Wisconsin in the years before Walker took
office. The program was all but eliminated in Walker's latest budget
proposal - an unwelcome development for other shipping businesses.
As for Walker's tax cuts? "They haven't made us grow or recede at
all," he said.
(Additional reporting by Steve Holland, editing by Ross Colvin)
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