Wisconsin’s Privatized Jobs Agency Criticized Again

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The evidence continues to mount against the notion that privatized economic development agencies are a responsible means to promote state  economic development  A new audit of the Wisconsin Economic Development Corporation (WEDC) echoes previous findings in outlining missteps at the agency. For example, the non-partisan Legislative Audit Bureau finds that:

  • “WEDC did not report clear, accurate, and complete information on the numbers of jobs created and retained as a result of its programs.”
  • Subsidy recipients were not required to submit critical informational about job creation outcomes.
  • Subsidies were awarded to a company for jobs that had been created prior to the awarding of a tax break agreement.
  • The agency has lax implementation on wage standards.
  • A provision to steer state economic development dollars toward small businesses and rural areas was quietly eliminated in July 2014.

The audit was so embarrassing that Gov. Scott Walker dropped a plan to expand the WEDC’s authority by merging the state’s housing finance agency into it.

Despite the poor track record of agencies such as WEDC, other states including Wisconsin’s neighbor Illinois, continue to consider privatizing their state commerce agencies. They should instead heed  the lessons of Wisconsin (and Indiana, Florida, and Ohio to name a few) and acknowledge that privatization is no policy panacea.

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