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WEDC CEO ‘very certain’ agency can verify jobs numbers under changes in lame-duck bill

December 13, 2018

The CEO of the state’s economic-development agency says he’s certain it can accurately verify jobs created in exchange for tax breaks under changes to the process in a GOP bill passed in an all-night lame-duck session last week.

The changes, first reported by the Wisconsin State Journal, would remove a requirement in state law that the Wisconsin Economic Development Corp. annually verify information submitted by tax credit recipients before the companies can obtain the tax credits.

Under the bill — which awaits action from Gov. Scott Walker — WEDC would verify only a sample of job-creation data and rely on signed statements from companies that they had created the required jobs. The inclusion of those changes in the larger lame-duck bill package had not been publicly reported before it was passed late Tuesday and early Wednesday.

The change would lower the statutory bar for how WEDC ensures companies create the jobs they have promised in return for tax breaks.

But WEDC CEO Mark Hogan told reporters Monday that it won’t change how the agency currently verifies those jobs numbers. Hogan said examining a large-enough sample of jobs data can provide accurate information without subjecting the agency to what he described as the “crushing” burden of independently verifying each job.

“We’re very certain about the results we provide,” Hogan said.

WEDC has clashed with the nonpartisan Legislative Audit Bureau on its process for verifying jobs numbers. The audit bureau has interpreted state law as requiring WEDC to independently verify each job created, Hogan said — a task he and other WEDC officials call costly and onerous.

Hogan said WEDC currently gives tax credits to more than 300 companies in exchange for a “couple hundred thousand” jobs.

“You’re never going to independently verify over 200,000 employees,” he said. “It’s just a process that cannot work.”

Hogan said WEDC began more than two years ago seeking the changes passed last week.

“This is not something that just happened in the last two weeks,” he said.

The proposed change comes at a politically fraught time for the state’s public-private jobs agency, created by Walker shortly after he took office in 2011.

Gov.-elect Tony Evers wants to dissolve WEDC and move its functions to a fully public agency like the former state Department of Commerce.

Republican legislative leaders, meanwhile, have said they want to preserve the agency and prevent any attempts by Evers to derail the biggest tax-break package it is administering: a $3 billion state subsidy for electronics manufacturer Foxconn to locate near Racine.

Also under the legislation, Evers would be blocked from overseeing WEDC for nine months. It’s one of several components in the legislation that would reduce the powers of Evers and the incoming Democratic attorney general.

“Under Republican control, the WEDC has been plagued by scandals, mismanagement and under-performance,” Senate Minority Leader Jennifer Shilling said in a statement. “The last thing that agency needs is less accountability measures.”

The WEDC provisions are tucked into a wide-ranging package of legislation that also restricts early in-person voting to the two weeks before an election, prevents Evers from withdrawing from a multi-state lawsuit challenging federal health care reform laws and eliminates the state Justice Department’s solicitor general office.

Walker has signaled his general support. His spokesman, Tom Evenson, said Monday that the governor was still reviewing the measures.

The Associated Press contributed to this report.