Wednesday, January 4, 2012

Hey WEDC, can you spare a millionaire a dime?

Just noticed that Gov. Walker was running around trying to take credit for the 120 jobs that might develop from the Shopko-Pamida merger that was announced today. The good news is that Shopko wisely chose Wisconsin over Flori-duhhhh to keep its headquarters in Ashwaubenon, and it looks like Shopko will put in a lot of money to remodel Pamida stores into what will become Shopko Hometown stores. Of course, as with most mergers, you can bet some stores will eventually be found redundant and close, but it's probably an overall plus for Wisconsin when a large employer decides to expand its corporate headquarters in state.

Now, the Walker folks were quick to throw out a press release touting the fact that the newly-formed Wisconsin Economic Development Corporation gave Shopko up to $2 million in tax credits in connection to the move. But that's sketchy reasoning at best, as Shopko is a solid firm, and had already owned and operated 7 Pamida stores as Shopko Hometown. So was it really worth it to give them a tax write-off of $16,666 a job, especially if it might have happened anyway.

I sure hope Shopko doesn't follow the lead of Madison's Spectrum Brands, who got $4 million in tax breaks from the state around Thanksgiving in return for saying they would create 60 some point. Apparently all they had to do was ask and the Walker boys threw them the $4 million in credits like it was candy. So what did Spectrum do with the cash? They promptly turned around and gaven their CEO $2.5 million in salary and benefits and $11.2 million in stock options.

Hmmm, $4 million in state tax write-offs, $2.5 mil in salary, and standing to make a whole lot more if you jack the stock price up (likely by using the tax credits as extra "profit", or eventually laying off employees and/or cutting salaries). Not a bad payday for "leading" the former Rayovac to a $75 million LOSS last year, and a $190 million LOSS the year before.

With that kind of record, do you blame the Bradley Center to come begging to the Administration for more state money? (so far they haven't been successful, which I view as a good thing) The Bradley Center probably thought the Walker Administration and WEDC was so desperate for good job-development publicity that Scotty wouldn't only just give them money, but he'd put in a free day in the Bango costume. Or he'd chip in for primo Marquette seats in return for a few more credits toward his degree. One of the two.

Edit": For more on this, read what the Chief has to say about how unneeded these tax credits really were.

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