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Latest WEDC Audit Finds Gap Between Jobs Pledged And Jobs Produced

State's Economic Development Agency Promises To Address Issues Raised In New Review

Interior of Wisconsin State Capitol
Justin Kern (CC BY-NC-ND)

A new audit finds continuing problems at Wisconsin’s economic development agency.

The review from the nonpartisan Legislative Audit Bureau released Friday examined the Wisconsin Economic Development Corp.

The audit said the companies that got tax credit and loan awards during the fiscal year ending in June 2018 only created about 35 percent of required jobs.

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In one case, the report said the WEDC awarded $462,000 in tax credits for job creation to one recipient that actually lost 17 jobs.

The report said WEDC could have required loan recipients to repay $4 million.

Republican state Sen. Robert Cowles, co-chair of the Legislature’s audit committee, said that is a major concern for him.

“How can that be defensible, is my argument,” he said. “In other words, you sign a contract with some company and you give them X benefits – and they only generate 35 percent of the jobs that they said under the contract, but they got all the benefits.”

“If there’s a big gap between the contract and actual performance, I think we have to question whether some of these things are actually working,” Cowles said.

The audit also faulted WEDC for awarding tax credits to recipients that created or retained jobs filled by people outside of Wisconsin.

Mark Hogan, WEDC secretary and CEO, said in a letter to auditors that his agency has been working to address the concerns raised in previous audits and will provide an action plan to address the latest recommendations in the next 30 to 45 days.

Republican state Rep. Samantha Kerkman, who co-chairs the audit committee with Cowles, described the findings of the audit as “frustrating,” but added that WEDC has already made changes to ensure that companies are meeting their job targets to receive benefits.

She said if WEDC address these issues, it can help boost the state’s economy.

“We still need this tool, and our economic development people in our counties tell us that we need the state and local partners to work together to help attract and retain jobs here in Wisconsin,” she said.