MADISON - Companies seeking tax
credits from Wisconsin's troubled job-creation agency would face
less scrutiny under a provision Republicans included in a package of
lame-duck legislation designed to weaken newly elected Democrats.
The measure awaiting GOP Gov. Scott Walker's signature would loosen
the reins on an agency he created, which has marred by allegations
of failing to recover loans from some companies and handing out $126
million without a formal review.
Gov.-elect Tony Evers, who ousted Walker in last month's election,
would be blocked from overseeing the Wisconsin Economic Development
Corporation for nine months under another provision in the lame-duck
package. It's one of several components in the legislation that
would reduce the powers of Evers and the incoming Democratic
Current law requires the WEDC to annually verify payroll and
employment data from tax credit recipients to make sure they're
creating enough jobs to qualify. State auditors found last year that
the agency isn't living up to that requirement and was accepting
information recipients submitted as accurate and complete.
The lame-duck legislation would erase those annual verification
requirements. The agency instead would be required to have a third
party verify a sampling of the information. Recipients also would
have to send a signed statement to WEDC attesting to the accuracy of
the information they submit.
WEDC's chief executive officer, Mark Hogan, told reporters Monday
that the agency can't possibly verify information about the tens of
thousands of employees that work for the 300 or so credit
recipients. The agency has been verifying data samples for years and
the lame-duck bill simply codifies that practice into law, he said.
"You're never going to be able to independently verify over 200,000
employees," Hogan said. "It's a process that cannot work. The only
solution was to change the statutes to codify what we're doing."
Hogan said changing the law has been his "top priority" for three
years. He tried to get lawmakers to pass the changes before the
Legislature adjourned its two-year session this past spring, but
legislators told him then it was too late.
WEDC is a quasi-governmental agency Walker created in 2011 that
hands out grants, loans and tax credits to businesses and other
organizations. A May 2017 audit found the agency didn't require
recipients to supply enough detailed information to determine how
many jobs were created or retained as a result of the agency's
WEDC officials played a key role in persuading Foxconn Technology
Group to build a huge flat-screen plant in Mount Pleasant. The
agency administers an unprecedented $3 billion state incentives
package that Walker and Republican lawmakers created for the
manufacturer. Walker has promised that if Foxconn doesn't create
jobs it won't receive state tax credits.
"Under Republican control, the WEDC has been plagued by scandals,
mismanagement and under-performance," Senate Minority Leader
Jennifer Shilling said in a statement. "The last thing that agency
needs is less accountability measures."
The WEDC provisions are tucked into a wide-ranging package of
legislation that also restricts early in-person voting to the two
weeks before an election, prevents Evers from withdrawing from a
multistate lawsuit challenging federal health care reform laws and
eliminates the state Justice Department's solicitor general office.
Walker has signaled his general support. His spokesman, Tom Evenson,
said Monday that the governor was still reviewing the measures.