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Proposal to downgrade metro areas could slow economic growth in Janesville

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JANESVILLE (WKOW) -- Federal officials are considering a proposal that could have a significant impact on the economic future of dozens of communities across the country.

A committee of statisticians is proposing to downgrade 144 communities that are currently designated as metropolitan statistical areas. It would require a metro area to have at least 100,000 residents in its core city, doubling the current requirement. Cities with core populations between 50,000 and 100,000 people would become “micropolitan" statistical areas.

That would impact several communities in Wisconsin, including Janesville/Beloit, Wausau/Weston, Sheboygan, Fond du Lac and Oshkosh/Neenah.

City leaders in Janesville are worried the change could halt economic growth at an already difficult time.

"It would represent just one more hurdle for, I think, the Janesville community here locally to overcome," said city planning director Duane Cherek. "At a time when we're trying to rebound from the economic downturn brought on by the national pandemic, this would just be another issue for us to deal with."

The city, lawmakers, and other leaders across the country, are asking the office to reject the proposal. In a letter to the Office of Management and Budget, Janesville officials say a downgrade from metro status could hurt housing and community development programs, economic development and transportation in the city.

2021-MSA-Correspondence-City-of-Janesville

An MSA listing can help cities attract national businesses to the area, by giving potential developers a look at workforce data, housing and overall market conditions in a community, according to Cherek.

He says losing that designation would make economic development more difficult.

"I think we would have to work much more diligently and harder to draw attention to the Janesville community because of that loss of national exposure that is readily available at every data outlet that's currently utilized for business attraction and retention," he told 27 News.

A strong network of support for entrepreneurs is what caught Nick Shepherd's attention. When the New Glarus business owner launched his 3D printing business in 2019, he knew he wanted it to be in Janesville.

"Their openness and willingness to work with startup companies, to bring them to that area, to help get them supported, get them involved with their communities and spread them to their networks, was just like something we couldn't get Madison," he said. "We just received an unparalleled level of support, and honestly it's why we've been as successful as we are today."

Since then, GLW Technologies has grown and adapted to the needs of the community, building PPE during the pandemic and now drones for a more reasonable cost.

Janesville losing its metro status is a disappointing possibility for Shepherd, who sees the value of a company's home in the community.

"I think it downplays what a huge aspect those communities play to our economic development here as a state," he said.

That's why city leaders are fighting to keep their MSA designation, as they also worry about losing funding for federally-backed programs.

The committee that made the proposal says it's just for statistical purposes, not funding formulas, but housing, transportation and Medicare reimbursement programs are often connected to those designations.

"There's no assurance that that wouldn't necessarily be the case, or that that wouldn't be impacting the formula, if you will, for the variety of federally-funded programs that are out there," Cherek said.

The Associated Press reports statisticians say the MSA changes are needed because the US population has more than doubled since 1950 when about half of US residents lived in metros; now, 86 percent do.

Jennifer Kliese

Weekend Anchor and Reporter, 27 News

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