Lawmakers cite frustration with Wis. jobs board

WAUKESHA, Wis. (AP) -- Two state lawmakers vented their frustration over Wisconsin's job-creation agency Wednesday, telling members of the agency's board the Legislature would look to impose changes unless the organization showed signs of improvement.

The Wisconsin Economic Development Corp. board members met in Waukesha to discuss the results of a recent nonpartisan audit that found a number of serious missteps. For example, WEDC didn't consistently follow the law or its own policies during its first year, it failed to adequately track loans and it provided tax breaks to companies that didn't qualify.

Enough is enough, said state Rep. Jeff Stone, a Republican from Greendale who sits on the board.

"This is an organization that is in intensive care, and we need to have dramatic improvement quickly," he said.

State Sen. Julie Lassa, a Democrat and fellow board member, said she and her fellow legislators shared Stone's frustration. She said taxpayers are angry about how WEDC has been run, and lawmakers are keeping a close eye on whether WEDC enacts effective policies that make the agency accountable and transparent.

"If not, there's going to be a lot of interest in the Legislature of changing it," she said. Those changes could range from minor tweaks to eliminating the quasi-governmental agency and replacing it with a state agency.

Several WEDC executives said steps were already underway to address the problems. WEDC Secretary Reed Hall said there are already new procedures for evaluating and tracking loans, and computer systems are in the process of being upgraded. He also noted the recent hiring of Jake Kuester, who has previous banking experience and is being asked to improve policies related to loan administration.

Wednesday's meeting came a day before the Legislature's Joint Finance Committee was scheduled to vote on WEDC's budget. The committee could hold up any increase in funding until WEDC proves it's enacted certain reforms and accountability measures, said committee co-chair Rep. John Nygren. He said the committee would discuss that option on Thursday when it considers approving $14 million in additional spending for WEDC as Walker proposed.

"We're going to give them a chance to fix themselves," Nygren said at a news conference with Assembly Speaker Robin Vos.

Both he and Vos have said WEDC's economic development efforts have won praise from local officials in their legislative districts in the Marinette and Racine areas. But they also said WEDC needs to improve.

"They've done some things I'm not proud of," Vos said.

Gov. Scott Walker downplayed concerns about WEDC's performance. He said he also hears from economic development specialists and employers who tell him they like the work WEDC is doing, and who say the new agency is more responsive than the Department of Commerce it replaced almost two years ago.

Walker also said many of WEDC's administrative problems developed because officials relied on Commerce Department policies that were vague or never written down.

His suggestions included creating a policy committee to formalize how the agency handles certain aspects of the business. For example, the committee could approve policies on how to decide whether to grant a loan, and how to work with companies that are having trouble paying back their loans on time.

He also suggested creating two other committees. One would review current contracts and evaluate future ones, and the other would evaluate the quality of loans.

At one point, Lassa asked that the board be given the chance to speak with the Legislative Audit Bureau auditors who produced last week's report. She said doing so would help the board better understand what standards the auditors were using and ensure closer cooperation next time.

Walker agreed, suggesting that the auditors meet with the board at the quarterly meeting next month.

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Dinesh Ramde can be reached at dramde(at)ap.org.