WEDC Spends More, Produces Less

It should come as no surprise that the Wisconsin Economic Development Corporation’s millions in taxpayer handouts to well-fed executives and political cronies are producing less with each successive spending spree:

The state’s flagship job-creation agency handed out nearly $90 million more in economic development awards last year than the previous year, yet those awards are expected to create or retain almost 6,000 fewer jobs and result in $400 million less in capital investment.

Most of the additional award funding resulted from a historic rehabilitation tax credit that Gov. Scott Walker and the Legislature expanded in 2013. The agency gave out $2.9 million in 2013-14, but that jumped to $78.1 million last year.

Even without the historic credits, total economic development awards increased $13.5 million, while promised job creation and capital investment dropped….

See, AGENCY HANDED OUT $90 MILLION MORE LAST YEAR: WEDC awards increase as job creation numbers fall @ State Journal.

At the same time, Wisconsin lags America in job creation:

Wisconsin ranked 30th overall in the nation in private-sector job creation during the 12 months ending in March, according to data released Thursday.

Wisconsin reported a 1.72% increase in private-sector jobs for that period, compared with the previous 12 months, according to employment numbers released by the U.S. Bureau of Labor Statistics. The state added 39,624 jobs.

The state’s performance compares with a 2.4% increase for the nation — continuing Wisconsin’s historic lag in job creation.

We’re spending more, but producing less for it, and still underperforming the national average.

Three other key points:

1. As with tens of millions in state credits for Kohl’s, some of the jobs created needn’t last long to be counted. Supposed job-creation claims are often sketchy and temporary.

2. There’s now a flood of statewide reporting about WEDC’s failures. That wave of inquiries & reporting isn’t close to being done.

3. Even after results of those inquiries are published, there’s a significant issue of how local development agencies or city governments are spending public money, what they’re reporting as ‘job creation,’ and how loans are either unpaid or converted into grants so that they needn’t be repaid. Several cities or agencies in Wisconsin have embraced WEDC more firmly than others. Whitewater’s Community Development Authority and city government are among them.

Most of these communities have proceeded with little more than economic-justification-by-press-release. Actual evidence of job creation is either absent or flimsy. In Whitewater, the CDA truly looks more like a third-tier public-relations effort than an actual community development agency. In this regard, Whitewater is probably at the forefront of the WEDC wave: headlines, happy insiders, and exaggerated claims.

Months of statewide examinations into WEDC will inexorably lead to examinations of local agencies that have embraced the WEDC model most warmly.

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8 years ago

The local agencies are weak versions of the state one.
It’s a next step to look at the local ones.