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Our View: Clean up jobs agency, don't close it

5:37 PM, May 17, 2013  |  Comments
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It is not a stretch to make a connection between these two things: Wisconsin's job creation has been sluggish, and the main agency tasked with creating jobs, the public-private Wisconsin Economic Development Corp., has been riddled with scandal, lousy procedures, incompetence or worse.

An audit released this month by the nonpartisan Legislative Audit Bureau painted a deeply troubling picture of failed policies and wasted money.

Some are now calling for the agency to be disbanded, or for funding to be withheld in the state's new budget. Under pressure, Republican lawmakers last week introduced a set of policies intended to introduce some accountability to the department that has long been lacking.

We share lawmakers' frustration with the agency's failures. And more information needs to be brought out about precisely why those failures occurred.

But we cannot join the calls to disband the agency. We endorse the policies added by Madison Republicans - and the efforts to improve oversight of the agency. And we agree with state Democrats who have proposed that the governor should not be chairman of WEDC's board, and the board should have greater ability to hire and fire leaders than it does now.

The state needs WEDC to work.

First, what happened?

? The agency's systems for following up on grants were a mess. The agency made $8 million in loans that it did not even track. And it failed to follow up to measure how many real jobs were created - even in cases where grants were tied to job creation. It failed to pursue overdue loans or to pay sufficient attention to whether grants were being used according to statute.

? It did not follow its own granting rules. Awards were granted to ineligible businesses, ineligible projects and for amounts that exceeded specified limits, according to the report. In some cases the WEDC failed to even check the financial information of the companies it was giving money to.

? It jumped the gun. WEDC gave $1 million in tax credits to agencies before they had even signed contracts with the state.

Proposed changes include new transparency and disclosure requirements. Probably the most important, though, is that WEDC would not be allowed to spend any money in the second year of the state budget until it demonstrated improvements.

Those provisions stop short of calls to end WEDC or completely hold up funding in the immediate term, because a functioning economic development agency is vital to Wisconsin. The measures proposed would add real accountability measures while still allowing the agency to operate.

The people running WEDC - like the politicians running the state - seem to have vastly underestimated what would be necessary to create jobs. It was supposed to be simple: Cut taxes, ease regulations, wave an "open for business" banner and jobs would appear.

The debacle at WEDC is proof that it's turned out to be a lot more complicated than that.

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