Evers would dissolve WEDC created by Walker
But governor candidate backs off idea of having no jobs agency
MADISON - Democratic candidate for governor Tony Evers plans to eliminate Gov. Scott Walker’s oftenembattled jobs agency if elected, but backed off from the idea of having no state economic development department at all.
The Wisconsin Economic Development Corp. “has been a constant source of controversy, inefficiency and ineffectiveness“for seven years and must be disbanded, Evers told the Milwaukee Journal Sentinel.
“Millions have been lost or unaccounted for, with taxpayer-funded loans used to buy luxury cars,” Evers said. “Too many Wisconsin communities are left feeling ‘what about us?’
It’s unclear how the agency’s current duties and programs would be handled under Evers’ plan, however.
When asked how he would replace WEDC, Evers
said he would work with legislators to disband the agency “and return the majority of economic development dollars to local communities and regional organizations.”
“We shouldn’t make businesses come to Madison to beg for help — we should work within our communities and local chambers of commerce to rebuild our main streets, grow our existing businesses, create new jobs and bring new industries to Wisconsin.”
But Thursday, after the Milwaukee Journal Sentinel published an article on the plan, Evers’ campaign manager said Evers would “absolutely” have a state agency “that works on trade missions, job creation and supporting and investing in businesses in Wisconsin.”
She didn’t say how the new state agency would differ from WEDC.
Without a state-level agency, Wisconsin would likely have been alone in not having an economic development entity, said Jeffrey Finkle, president and CEO of the International Economic Development Council.
On Wednesday, he predicted Evers would quickly abandon the idea — which Evers did less than 24 hours later.
“I would think they’re going to reverse course pretty quickly,” Finkle said before Evers’ campaign clarified its plan. “... This would be very unusual, not having a state agency leading economic development.”
Without a state entity, it would be difficult for Wisconsin to work with other countries or participate in the Select USA trade show focused on drawing foreign investment in the United States, he said.
But Finkle added Evers may have identified some problems with Wisconsin’s approach to economic development, noting WEDC and some semi-private agencies in other states have stumbled at times and lacked transparency.
WEDC oversees tax incentive packages and loans to private businesses awarded in exchange for the promise of job creation. Walker created the agency as part of a campaign promise to create 250,000 jobs in his first term — a goal Walker missed.
The agency has been under scrutiny since it began — when it lost track of millions of dollars in loans carried over from the state department it replaced — and as it awarded loans to businesses not properly vetted, which failed to create jobs or repay what was borrowed in some cases.
Evers said instead of having a state agency connecting with businesses, he would largely leave it to local and regional economic development organizations to spur job growth with the help of state funding currently routed to WEDC.
Evers’ campaign manager, Maggie Gau, said Evers wants the state to have a more regional focus that can specialize in area industries and invest in local small businesses and startups.
Gau said a state-level agency has an important role in managing existing loans administered by WEDC and conducting trade missions abroad, but that “WEDC cannot be trusted with this work.”
Mark Hogan, the secretary and chief executive officer of WEDC, said getting rid of the organization would be “misguided” and disrupt the state’s relationships with local and regional economic development agencies.
“It would be a huge mistake,” said Hogan, who was appointed to his job by Walker in 2015. “Tony Evers does not understand economic development if he feels that getting rid of WEDC is the answer, without any kind of evidence, with any specifics as to what he would do.”
Hogan said reallocating WEDC’s resources to counties or regional organizations “would result in inconsistencies in Wisconsin’s approach to economic development that would limit our ability to build upon the significant results we have achieved over the past seven years.”
Walker in 2011 approved dissolving the state Department of Commerce and replacing it with the WEDC. It faced numerous problems in its early years.
In one case, WEDC gave a $500,000 unsecured loan to Building Committee Inc. in 2011 in a deal that soured. Soon afterward, WEDC officials tried to get federal tax incentives for the business after being told owner Bill Minahan was promising to use the money to pay a leasing debt on a 2010 Maserati and another luxury car.
Hogan said issues such as that have been overcome in recent years. As a semi-private organization, WEDC is nimbler — and better able to deliver a boost to the economy— than the Department of Commerce, Hogan said. WEDC can “tailor make” its programs to help businesses and local chambers of commerce, while its predecessor had stricter limits on what it could do, he said.
Pat O’Brien, executive director of Milwaukee-area economic development group M7, said WEDC has gotten past its problems and has a good relationship with his group. He said Evers should identify the specific problems he sees and offer a plan to fix them rather than dissolving the entire agency.
“Why blow up something that’s working?” O’Brien said.
Evers’ chief criticism of WEDC is the $3 billion contract with Taiwanese tech giant Foxconn Technology Group, which plans to build its first U.S. plant in Wisconsin and bring up to 13,000 jobs to the state. Separately, the company is in line for another $1 billion, bringing the state and incentive package to about $4 billion in all.