Wisconsin Economic Development Corporation plans to scale back programs after nearly $4M budget cut

The leader of the Wisconsin Economic Development Corporation says the agency will have to cut back on some of its programs over the next two years to compensate for a nearly $4 million drop in revenue.

That’s after the Legislature’s Republican-controlled budget committee last week declined to take up WEDC’s request for additional money and instead approved the agency’s usual funding, which is projected to decline.

WEDC’s primary form of state funding comes from economic development surcharges imposed on companies that then go into a segregated economic development fund. The agency says those revenues haven’t kept pace with inflation.

In the 2024-25 fiscal year, the agency received about $45 million from the segregated economic development fund.

Gov. Tony Evers proposed increasing the agency’s budget by 160 percent, mostly by providing an infusion of $145 million in state funds in the upcoming fiscal year.

Last week, Evers and Republican Legislative leaders said their negotiations over the next state budget had ended. Evers’ original budget proposed large spending increases beyond his request for WEDC. Republicans had previously said many of his proposals would be thrown out.

Ahead of last week’s vote, WEDC asked the Legislature for either a $55 million block grant or one-time funding of $20 million, saying its “core funding has not kept pace with inflation,” according to a document from the agency.

But on Thursday, the Legislature’s powerful Joint Finance Committee voted 12-4 to accept an updated estimate of the money WEDC will receive from the economic development fund, which amounted to a budget cut.

The agency would receive $42.6 million in the 2025-26 fiscal year and $43.3 million in the 2026-27 fiscal year, which comes out to a decrease of more than $3.8 million over the two years.

A proposal by Democratic lawmakers that would have given WEDC $5 million in the next fiscal year to provide grants to attract large events failed to pass the committee on a 4-12 vote.

“Despite record levels of capital investment, record levels of leveraging private sector dollars in community development and an uncertain economy, the Joint Finance Committee has thought it smart to not invest in economic development,” said Missy Hughes, secretary and CEO for the Wisconsin Economic Development Corporation.

Hughes said the loss of $3.8 million will mean the agency will have to cut programs. She said the affected funding is used by WEDC for tax credit and grant programs, and she anticipated that grant programs are the ones that will face cuts. 

That would disproportionately affect small businesses, as tax credits are typically incentives awarded to a company seeking to bring hundreds or thousands of jobs to Wisconsin, Hughes said. The agency’s grant programs, meanwhile, are targeted at “small businesses and the community development opportunities,” she said.

“Whether it’s taking a nursing home and redeveloping it into apartments or renovating and redeveloping a community theater — or providing direct support to small businesses to improve their facade or invest in their own infrastructure — those are the programs that are going to be cut,” she said.

Ahead of the committee meeting where lawmakers voted on the budgets for WEDC and other agencies, Sen. Howard Marklein, R-Spring Green, who cochairs the Joint Finance Committee, said Evers has already signed three GOP-authored budgets into law, and he hopes the governor will sign a fourth this summer.

“I’m very hopeful that we will do a responsible budget that we can afford that addresses the major priorities,” Marklein said. “And a lot of the priorities that I think the governor’s office has and we have are very similar, so I’m very hopeful that the governor will sign the budget.”