Sunday, September 13, 2015

This week in WEDC giveaways and corruption

Lookie here! The Wisconsin press is relaying a "major jobs announcement" for a future project in the state, this time from publisher Quad Graphics in Sussex. And like a number of other previous announcements, this announcement comes another handout from the Wisconsin Economic Development Corporation (WEDC)
The company will be eligible to earn $15.7 million in state tax credits from the Wisconsin Economic Development Corp. as part of the planned expansion.....

Earlier this year, Quad won a long-term contract from Hearst Magazines to print 20 of its 21 titles, including Cosmopolitan, Elle, Esquire and Good Housekeeping. It also won a contract to print additional titles for Time Inc.
So Quad Graphics already had a contract in place that would have required an expansion anyway, before they received one tax break. And if you do the math, the WEDC package translates to tax credits of $31,400 a job- well past whatever profit would be gained from hiring another employee. In addition, WEDC allows Quad Graphics 5 years to add the jobs, and I don't see any wage requirements listed in the jobs that need to be added in order to grab these tax credits.

Now add in these details, which are conveniently buried in the bottom of the Journal-Sentinel story.
We Energies has asked state regulators for a special economic development rider that would help lower energy costs for Quad as it expands in the state. In a filing last month, the utility asked the Public Service Commission to approve a rider that would allow Quad to pay market prices in the wholesale power market for the additional energy its uses as part of its planned expansion.

Quad, which has struggled as magazines' circulation has declined, reported a net loss of $80.3 million on $2.2 billion in revenue for the six-month period ended June 30. The company posted net income of $18.6 million on revenue of $4.9 billion in 2014.
So we're giving away millions of taxpayer dollars for a company with billions in revenue, and that is expanding without the need for those tax credits. In a state where we just had to cut $250 million from the UW System, having public schools and prisons suffering from staff shortages, and a budget that has $1.1 billion in unspecified cuts built into it that have yet to be realized.

WEDC was part of another "future jobs announcement" this week regarding a new warehouse for Dollar General in Janesville, which features another $5.5 million in potential WEDC write-offs, along with local tax breaks and land gifts from the Janesville area. And the timing of these announcements are very interesting, because last Wednesday, WEDC was the subject of a legislative hearing related to another blistering audit by the Legislative Audit Bureau. And take a look at what came out in that hearing, where both Republicans and (especially) Democrats were angered by WEDC's continued inability to follow state laws on tracking loans, grants and job-making progress, combined with the loss of taxpayer dollars from previously failed projects and questionable loans.

Then look what also dropped on Friday regarding WEDC- they're continuing to refuse to take up action in light of several WEDC recipients receiving tax breaks, and then outsourcing Wisconsin jobs.
The two Democratic lawmakers on the WEDC board asked to discuss outsourcing and background checks at a board meeting in July. But agency officials said they couldn't address the matter then because it wasn't on the board's agenda.

The Democrats -- Sen. Julie Lassa of Stevens Point and Assembly Minority Leader Peter Barca of Kenosha -- then asked that the matter be put on the agenda for the Sept. 24 meeting. In a letter Friday, WEDC's secretary, Reed Hall, declined to do that because the board wouldn't have time.

He said the Sept. 24 meeting is only slated to last two hours and the board is already dealing with substantive issues. Instead, he wrote that outsourcing and background checks should be taken up in October.

"I know you agree that we should implement policies that will have a positive impact on the state’s economic growth," Hall wrote. "To do so requires a holistic approach instead a piecemeal one. The October Board meeting will provide an opportunity to take that approach."
Oh, and have I mentioned that Reed Hall is quitting as WEDC CEO at the end of this month, and didn't appear at last week's Audit hearing? And that he will be replaced by mega-WisGOP donor Mark Hogan, the former head of M&I bank? Noooo, nothing sketchy about that at all!

Let's see if these projects ever get off the ground. I'll remind you that Eaton Corp announced plans for a sizable expansion with WEDC tax credits in Spring 2014 (just as Scott Walker's re-election campaign was ramping up) only to outsource large amounts of Wisconsin jobs twice in the last 18 months. Funny how these things never seem to work itself out the way the initial headlines claim, isn't it?

With that in mind, don't you think these major jobs announcement and WEDC giveaways might be a PR attempt to distract from the reality that this organization has been nothing more than a corrupt slush fund for Scott Walker and the Wisconsin GOP since they formed WEDC in 2011, do ya? And they just happen to come out before this week's release of the Quarterly Census on Employment and Wages for the March 2014-March 2015 timetable, a report that will likely show Wisconsin continues to languish in the bottom half of job growth in the U.S., and likely staying at or near the bottom of our Midwestern peers since Walker and WisGOP took power in 2011.

With the continued exoduses at the executive levels along with the hiding of information from the Dem members of the WEDC Board, it feels like something is very wrong. And the desperation of throwing out as many tax credits as possible to connected cronies Wisconsin corporations leads me to think more shoes are sure to drop when it comes to WEDC, and possibly soon.


  1. Ya missed one...

  2. It's obviously a way of padding WEDC's stats: (1) find a company that's about to expand; (2) give them taxpayer money; (3) claim that the giveaway was the cause rather than the effect of the expansion.

  3. WEDC will never be held accountable for anything that it does.

    The Koch Industries midwest subsidiary formerly known as the State of Wisconsin is not owned by the citizens of Wisconsin.

    The citizens of Wisconsin do not matter to the corporate owners.

    Never have, never will.

    The GOP in control of Wisconsin are going to restore the squeaky clean government that Wisconsin once had. Just not in the ways that really matter. They are never going to become ethical. What they are going to do is get rid of the watchdogs. If nobody is able to access records or look for crimes then no crimes will have been committed.

    It is so much easier for them that way.

    1. greg- That's definitely their plan, but I don't see enough falling for their tricks anymore (which is why they're gonna try to shove through some awful legislation in the next 7 months to try to consolidate power with the Guv).

      And honestly, the WisGOP puppets at the Capitol better hope that it ends much like it did in DC in 2006 and 2008- merely with electoral defeats. Because the other option is to end up hanging upside down on a pike, and that's not such a good look.