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May 6, 201309:01 AMVan Lines

with Joe Vanden Plas

Is Walker taking his eye off the ball?

(page 1 of 2)

With all the chatter about a new book and a presidential run by Wisconsin Gov. Scott Walker, one wonders whether the Republican Party’s new rock star has forgotten that he’s already got a job to do. You know, the governor’s gig in Madison?

Last year, when news of the accounting failures at the Wisconsin Economic Development Corp. surfaced, we were assured the problems would be fixed. Not so, at least not yet, according to a recent report from the Legislative Audit Bureau. The LAB has uncovered mistakes so basic, one wonders if anyone is minding the store at the new state agency that is supposed to promote economic development.

Instead, it appears to be promoting incompetence. According to the LAB, the WEDC failed to require financial statements from companies receiving incentives (incentives designed to promote job creation, mind you), didn’t perform adequate follow-up to make sure the promised jobs were being created, and gave awards to ineligible businesses and projects.

Without those safeguards, what do you have? Crony capitalism, that’s what.

It may turn out that most if not all the companies receiving grants will create the jobs they agreed to create when they accepted state support, but for the public to have confidence in this approach, stronger tracking and verification is required.

Beyond that, the most obvious concern is: Why is this so difficult? I don’t think it’s out of line to suggest that tracking state grants is not exactly on the scale of brokering peace in the Middle East.

The continuing failures have led some to suggest that a return to the Department of Commerce model is in order. That would be a shame because there are dedicated people, like our friend Tim Cooley, working at the WEDC, and because the agency’s model is a concept that has worked elsewhere, most notably in Indiana, the state that leads the Midwest in new job creation. Why not here?

These revelations are hardly the result of a partisan attack. It’s one thing for the governor’s critics, like State Rep. Peter Barca, D-Kenosha, to suggest the WEDC be scrapped. It’s quite another for Republicans like State Sen. Robert Cowles to acknowledge the jury is still out. (While I’m not convinced this duplication is necessary, Walker had no choice but to endorse a follow-up audit.)

The lack of execution at WEDC could be impacting the political fortunes of other economic development proposals. Part of the difficulty in launching a state-funded venture capital program is that, despite talk of built-in protections, lawmakers in the governor’s own party are worried that politicians will use the money to pick winners and losers. If Washington’s record is any indication, the winners will be those who make donations to political campaigns; the losers will be taxpayers who get stuck with the bill of a failed company.

(Continued)

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May 7, 2013 10:12 am
 Posted by  Anonymous

You're worried that his eye is off the ball. When was it ever on the ball? What has he done that's promoted one job in this state? Act 10? Merely took a lot of spending money out of the economy. Corporate tax cuts? Business will hire because there's demand not because of a tax cut. And there's less demand (see the first item). Items like concealed carry, school choice, the wolf hunt, etc. seem to be much more important to the current folks in charge. I don't now, nor have ever seen the "laser-like" focus on jobs.

May 7, 2013 12:34 pm
 Posted by  Torrey

Anon - you said Act 10 "took a lot of spending money out of the economy." That is not correct. Any money that was saved by Act 10 meant more money in the pockets of taxpayers. The net amount of money in circulation available for spending did not increase or decrease - it merely shifted in terms of where it was located. If you confiscate $10 from me and put it in your pocket, does that mean spending money was added to the economy? And if I take take it back from you, does that mean money was taken out of the economy? An emphatic "NO" on both counts.

That said, Joe's article does highlight some valid criticism of the Governor.

May 7, 2013 06:02 pm
 Posted by  Anonymous

First off Act 10 did take a bunch of money out of the economy since it essentially cut benefits for non-union staff working on research and other grants - you know the billion bucks in especially scientific research the UW raises that everyone talks about here and at Thrive about as the future for really growing our economy. Well you cut the staff in that areas 5% and being restricted grants that money did not go back to the taxpayers- it either went back to the funders or wait for future audits...That is tens of millions that left the local economy but conservatives in Dane County (and oddly many liberals too) don't really care about local impacts as long as ideological goals are met.

In terms of WEDC- well I work at a non-profit -we handle $2.4 million in grants funds with about 350 subcontractors. Do you know what our margin of error on an audit is?

$700 -- I don't think we have ever had any major problems in 30 years.

So when I see something like the WEDC audit I want to puke. This is mismanagement at a level no one would allow anyone but political hacks to have and stay open.

There are folks right now walking around Madison working at various non-profits earning in the mid 30's that could set up and run a better grants tracking system than WEDC has. But most of those folks haven't worked campaigns of contributed large amounts to candidates.

This will probably turn out to be worse than crony capitalism and more like outright theft. Having spent my first 40 years in Chicago this looks a lot more like standard Daley era corruption than anything else and that is sad because Wisconsin was so much better than that.

From that experience though in these cases,Walker's eye probably is on the ball and that is not job development but paying off his cronies.

And I hope that those of you who backed him for better job development and economic growth won't just accept an agenda where economic development devolves to having the ability to shoot something and eat it...

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