Saturday, November 21, 2015

WEDC literally out of control- handing out $ they don't have

Another day, and another revelation on how the Wisconsin Economic Development Corporation (WEDC) and the Walker Administration that created it refuse to follow rules or show any ethics other than paying back their buddies. This development is the result of a rare act of journalism in the Milwaukee Journal-Sentinel, courtesy of Jason Stein, and involves the state’s Legislative Fiscal Bureau sending a letter to WEDC saying that the agency is making promises that it literally can’t pay off.
The letter by fiscal bureau director Bob Lang was sent to then-WEDC chief executive officer Reed Hall on Aug. 19 and said WEDC had awarded $101.7 million in contracts, or $21.3 million more than its legal limit.

"Our office consulted with several legislative attorneys. They reviewed the relevant statutes and concluded that it appears likely that a court would (prohibit the awards)," Lang wrote….

The jobs tax credit was designed to provide incentives to companies that spent money to either hire workers or train them. The credit, which was limited to $10 million a year in total, could be paid out to a company over a period of 10 years.

That's where the dispute comes in, with WEDC and legislative attorneys disagreeing on whether WEDC could make awards in a given year that would be worth more than $10 million over the life of the awards without at least including a contract clause that allows the state to back out if future lawmakers don't set aside enough money for them.
A WEDC spokesman and the Wisconsin Department of Justice are claiming that the overselling of tax credits is just fine, because they say the limits are only based on when the tax credits are cashed in, but Lang’s concern is that being locked into contracts for years could tie the hands of future legislators and governors, without any budget including provisions for all those tax credits to be used.

There’s also the continual problem of WEDC being literally out of control, handing out tax credits on an excessive basis while seeming to ignore any rules or constraints laid out by legislators, and giving no real criteria for deciding who is worthy of those incentives (well, except for donation history to the Wisconsin GOP’s candidates- HAH!). At the same time, we have seen how these “job creator” tax credits have been gamed by companies such as Johnson Controls (who got tax breaks for adding jobs a couple of years ago, and now will outsource those same jobs in the coming months), and WEDC seems to have been asleep at the wheel while major employers such as Oscar Mayer and Tyson Chicken announced major layoffs and plant closings in the state.

Stein’s report and other WEDC-related failures of this week have led some state legislators to grow louder in their calls to end this slush fund. First among them was State Sen. Dave Hansen, who was saying this before Stein’s article came out.
Wisconsin workers should not have to pay to eliminate their own jobs nor should taxpayers be on the hook for commitments made by a rogue agency that continues to flout state law. It is way past time to admit that WEDC is a failure and shut it down.”

“There is no way to re-brand WEDC. It is a failed agency with a flawed structure that has done nothing but invite corruption and the waste of taxpayer dollars. Taxpayers and legislators from both parties should not settle for anything less than a complete tearing down of WEDC and a complete rebuild of our entire economic development program-including determining exactly what our state’s economic development mission should be.”
Also asking for the end of WEDC was Republican State Sen. Steven Nass, and while he’s often wrong about most everything else, nASS has constantly ripped WEDC’s performance and distortion of market outcomes, and refused to vote for Gov Walker’s latest CEO of WEDC. In a press release discussing the Tyson plant closing in Jefferson (which is in Nass’s district), he ended with this:
WEDC is seriously damaged and failing to effectively meet the public’s jobs in creating and saving jobs through it[s] programs to assist the private sector. We can’t waste any more time and resources in trying to save the Titanic from sinking.
Top Democrats in the Assembly are want WEDC to be blown up. The Number 2 Democrat in the Assembly, Rep. Katrina Shankland, who called WEDC “a personal piggy bank for Walker’s campaign contributors,” and said it was “beyond repair.” There also was a statement released by (future Governor) State Rep. Chris Taylor, who summed it up succinctly.
What else is it going to take for legislative Republicans to get serious about shutting WEDC down? We delivered a pink slip to Governor Walker when he was fired from the WEDC Board by the Legislature during the budget and now it’s time we deliver a pink slip to this failed job creation agency. From issuing millions in corporate welfare to individuals committing fraud to this latest development where $21 million in tax credits were illegally issued by the State – WEDC has been an embarrassment to our state for years.

The biggest Christmas present that Governor Walker and legislative Republicans could give the taxpayers this holiday season is toshut WEDC down. Our Governor couldn’t come close to meeting his 250,000 job creation campaign promise and now in 2015 Wisconsin has almost doubled the number of [mass] layoffs from 2014. This is an agency surrounded by fraud, waste and abuse and it’s time legislative Republicans admit they were wrong and agree to shut WEDC down.
The heat is definitely getting turned up on this issue, and no matter how much the Legislative GOP tries to distract with bathroom bills and legalizing corruption, WEDC’s failures keep creeping to the top. As I mentioned last week, there’s clearly concern from the GOPs that things are going to blow up even worse in the coming weeks, hence their leaders’ recent lip service of possibly doing some changes to WEDC. But I have severe doubts that most WisGOPs will have the guts to try to clean up the dirty, slushy mess that is WEDC- they gain too much from it.

Which is why you can bet the next 12 months will see more WEDC failures and corruption get exposed, and Wisconsin continue to lag economically and morally. It's a reality won’t change until the leaders are changed…..or they get perp walked.


  1. The tax credit limits are based on when they are cashed in?


    What if a whole bunch of companies plan to cash in those tax credits at the same time, more than the budget has allowed for?

    I think that the biggest gift that Walker and the legislative Republicans could give Wisconsin is their letters of resignation and that a few of them would surrender themselves to live behind bars for a few years.

  2. Jake- I recently noticed that if you compare monthly jobs numbers to WEDC annual reports, at least one of the following must be true (maybe both):
    1) WEDC is waaaaay off in its self-reporting of jobs "impacted," or...
    2) All of Walker's tax cuts, deregulation, etc have had ZERO impact on jobs

    Posted this on DK a couple days ago:,-WEDC,Jobs

    Wanted to make sure you saw this. Think it could be an important line of attack if it can get into wide circulation. Feel free to share/copy/build upon it. Cheers!