For many Madisonians, home seems immune to recession.

Local leaders often point to the University of Wisconsin and state government as a reason for Madison’s broad employment base, giving the city one of the lowest unemployment rates in the country.

But drive to any other major city in Wisconsin – Milwaukee, Janesville, Racine, Beloit – and the reality of the recession’s effect on the state is obvious. Dane County’s southern neighbor, Rock County, is home to the highest unemployment rate in the state.

In November, Scott Walker won an election by promising to alleviate the unemployment stress throughout the state by cutting government spending, reorganizing the state’s Department of Commerce and rejecting more than $800 million in federal high-speed rail funds.

The slogan used after Walker’s victory was ubiquitous and, to an extent, an indictment of previous administrations: “Wisconsin is open for business.” A series of legislative challenges will test that slogan in the months to come.

‘Cut taxes for everyone’

In an attempt to prove to act on that promise in the face of Democratic critics, Walker called a special session of the Legislature to introduce a tax credit package with a variety of incentives.

The special session bills will offer Wisconsin companies credits for every new job created. One of the bills, authored by Rep. Robin Vos, R-Rochester, offers a $1,000 incentive for every new Wisconsin job.

Another bill would give incentives to companies relocating from other states to Wisconsin. Members of Walker’s cabinet claim Wisconsin ranks among the worst states for friendliness to businesses – losing to many fast-growing Sun Belt states such as Oklahoma or Arizona.

“One of the things that I think all of us know is that Wisconsin is truly in a jobs crisis,” Vos said. “And I think over the course of the last four to six years many more jobs left our state economy.”

Vos went out of his way to stress the legislation will not target specific industries, but instead will focus on offering the credits to both small and large businesses throughout the state.

“I would say I think everybody in Wisconsin pays too much for taxes. It doesn’t matter what your business is, it doesn’t matter what your background is,” Vos told the Assembly’s jobs committee last week. “My goal is to cut taxes for everyone … I just want more jobs.”

Despite Vos’ focus on creating jobs, some Democratic lawmakers have said the money the state will use to fund the tax credits could instead be used to fund more infrastructure in education and transportation.

Members of Walker’s administration have called the legislative package an additional “tool in the toolbox” to create more jobs, but the proposals are just one step and are not proposed as immediate emergency fixes for the current jobs crisis.

To Democrats, an unprecedented risk

The nationwide precedents for Walker’s job creation proposals have been the subject of the highest skepticism of Democrats analyzing the bill. One of them, Rep. Cory Mason, D-Racine, asked Commerce Secretary Paul Jadin and Revenue Secretary Rick Chandler if the bill had a similar companion in other states throughout the country.

“For that much more, we’re going to local citizens to pay for property taxes or whatever else that we’re going to have to do with the shortfall,” Mason said. “And I don’t want to have to tell some pensioner … that her property tax went up because we invested in a property tax credit that didn’t work.”

Jadin and Chandler said despite the fact that the current proposals are relatively unprecedented for both Wisconsin and other states, they give the state an opportunity to emerge as a leader in attracting businesses.

Luring Illinois business

The growing leniency of business in Wisconsin comes with skyrocketing tax rates in Wisconsin’s southern neighbor, Illinois, which just last week passed a tax hike to prevent the entire state from going into bankruptcy.

In response, Walker has reiterated his claim that Wisconsin is “open for business,” while enticing Illinoisans to “Escape to Wisconsin,” a phrase used in promotional tourism material years ago retooled to attract businesses today.

“You are welcome here,” Walker said in a statement. “Our talented workforce stands ready to help you grow and prosper.”

Randall Upton, president of the Greater Beloit Chamber of Commerce, said the tax credits could positively affect the business climate in Rock County through encouraging business and industrial parks to grow in wake of the significant tax hike in Illinois.

“I don’t think there’s any question it’s going to have an impact on areas such as Beloit,” he said. “There are some smaller businesses in South Beloit, [Ill.], that might just be considering jumping across the state line for the first time.”

Without the crisis in Illinois, Upton added, the credits are still likely to have a positive effect on the climate and encouraging the further development of lots currently shovel-ready in Rock County industrial parks.

Cuts vs. investment

Unlike Republicans and some Democrats at the Capitol, freshman Rep. Brett Hulsey, D-Madison, the owner of a green-jobs consulting small business in Madison, has shown no confidence in Walker’s proposed credits.

Hulsey said the proposals ignore many issues central to his agenda for state policy assisting Madison.

“I run a small business, I work with small businesspeople,” he said. “Everybody I talk to when you mention tax credits just kind of laughs. We’ve got no tax to credit.”

Despite his opposition to many of Walker’s most recent proposals, however, Hulsey said he is still searching for a way to include his agenda in the legislation. He and Walker discussed working together on energy policy and environmental conservation in the state’s budget, which Walker will introduce later next month.

Hulsey said he plans to expand an existing conservation program, which gives the state a 10 percent net return on energy investment while reducing greenhouse gas emissions and creating more energy jobs.

Walker, according to Hulsey, is open to including conservation efforts in the next budget but is not as enthusiastic about renewable resources advocacy.

The similarities end with the agreement on conservation. Where Walker and the new Republican majority want smaller government and tax credits for all industry in Wisconsin, Hulsey and his Democratic counterparts are pushing for more investment in infrastructure and civil services.

“All of this tax credit stuff is really the rosette on the icing of the cake,” Hulsey said. “What we need is cake, which is the basic work, and we’re really worried that [Republicans] are going to slash a lot of infrastructure investments.”

An imminent political showdown

While the tax credits have caused a relatively small amount of partisan divides, a battle between Walker and Assembly Democrats is obviously looming.

Of all of Walker’s fiscally conservative proposals, few anger Democrats at the Capitol as much as his desire to reorganize the state’s Department of Commerce into a semi-private organization.

The idea, which Walker used as a centerpiece of his campaign, has caused outcry among Democrats claiming the action would cause the loss of hundreds of jobs.

Currently, Walker wants the department to be renamed the Wisconsin Economic Development Corporation. The governor himself would lead a 12-person board of directors, composed of members the governor would appoint and the Senate would confirm.

Walker’s initiative has received praise from a variety of Wisconsin groups, including Competitive Wisconsin, Inc. In a statement, Competitive Wisconsin Executive Director Bill McCoshen said the new agency will narrow the organization’s focus to solely job creation.

“The new laser focus on jobs will be critical in assisting the governor to meet his goal of helping to create 250,000 jobs over the next four years,” McCoshen said.

Republicans, including the commerce secretary, and business-related groups have said the restructuring would be beneficial to the Wisconsin business climate while avoiding spending taxpayer money on another department.

But many Democrats have said the restructuring would cause the loss of hundreds of jobs as a result of the majority’s initiatives.

Rep. Louis Molepske, D-Stevens Point, made several references to the restructuring when questioning Jadin and Chandler. Hulsey has expressed even more vehement opposition to Walker’s proposal, and said the proposal continues the loss of public jobs started when Walker had the Department of Transportation refuse Wisconsin’s high-speed rail funds.

Hulsey also said Democrats plan to introduce more legislative packages that will target specific industries for tax credits instead of the widespread cuts Republicans plan to make.

“We had jobs packages that were targeted tax credits and targeted job creation programs,” he said. “We’re trying to come up with real proposals and alternatives … Wisconsin’s largest unemployers are supporting these bills.”

With a large majority for Republicans in both the Senate and Assembly, the effectiveness of Democratic resistance to conservative economic policy will be difficult to attain throughout the next two years.

When the Legislature finishes the special session and, later this year, the state’s budget, the results will likely become the most discussed issues in the 2012 campaign throughout Wisconsin. Both Republicans and Democrats are crossing their fingers the results work in their favor.