State Rep. Peter Barca
Press Release

Barca, Lassa Propose New Model for Economic Development

Hybrid Agency Would Replace Failed Wisconsin Economic Development Corporation

By - Sep 15th, 2015 11:50 am

MADISON – Assembly Democratic Leader Peter Barca (D-Kenosha) and State Senator Julie Lassa (D-Stevens Point) today proposed a new model for economic development in Wisconsin. The hybrid agency would replace the failed Wisconsin Economic Development Corporation (WEDC). As members of the WEDC board, Sen. Lassa and Rep. Barca have proposed many reforms for WEDC but now are proposing to replace that broken agency.

“Republicans have abandoned WEDC at a pivotal time when more than ever meaningful changes and strong direction is needed – from the Governor removing himself as Chairman to Republican legislators trying to remove all lawmakers from the Board of Directors,” Rep. Barca said. “Economic development is too important to abandon. That’s why Sen Lassa and I are committed to replacing WEDC with an agency that will help Wisconsin become a Top 10 state in job creation and economic development. Our proposal retains private-sector involvement in Wisconsin’s economic development strategies but puts the administration of grants and loans where it’s safe from corruption and cronyism.”

Rep. Barca and Sen. Lassa are proposing a two-pronged, hybrid agency that will help grow family-supporting jobs. First, all the state’s economic development award programs will be returned to a public agency they suggest calling the Wisconsin Department of Economic Opportunity. Second, they would create a public-private board that could be called the Badger Innovation Corporation that will help market and promote Wisconsin.

“WEDC is irretrievably broken, and it’s time to start talking about what comes next,” Sen. Lassa said. “Our new agency will remove opportunities for cronyism and address outsourcing concerns by requiring that a company retain its employment levels and that the state reclaim taxpayer money if companies don’t meet their commitments. The new agency will also protect against fraud, ensure that all contracts follow state law and report job creation in meaningful and accurate ways.”

Consolidating economic development programs will allow the state to maximize opportunities for growth since there will be more economic development tools available to a single agency. Returning the economic development programs to a single state agency will allow the state to maximize opportunities for growth by:

  • Allowing federal Housing and Urban Development (HUD)/Community Development Block Grants (CDBG) to return from the Department of Administration (DOA), making that funding more accountable and transparent and allowing economic development professionals to leverage that funding for projects.
    • In the 2013-14 fiscal year, WEDC spent roughly $27 million on total economic development, according to WEDC’s annual financial report.
    • In 2014, DOA was allocated $24.6 million for the Community Development Block Grants program.
    • By consolidating back to a state agency, the Wisconsin Department of Economic Opportunity can utilize both programs and bring the Venture Capital Fund back into the fold.
  • Allowing the state to recoup state taxpayer dollars that are not being repaid by using the Department of Justice. The state would likely save money on two fronts: by eliminating the need to hire private attorneys and potentially recovering more funds.
  • Adding taxpayer protections from companies who outsource jobs and upholding a commitment to transparency through regular reports, open records and open meetings laws.
  • Bringing stability to the jobs agency to reduce staff turnover. Currently WEDC faces turnover of up to 25 percent, according to internal reports.
  • Drawing on the experience of local economic development agencies to address their challenges and replicate their successes statewide.

The Badger Innovation Corporation, the public-private board, will enable the participation of the private sector and local economic development professionals in shaping state job creation policy. The Badger Innovation Corporation would lead trade missions, recruit businesses and assist with marketing and industry cluster development. The public-private arm will also raise private funds for economic development activities.

Under the Barca/Lassa proposal, the transition to the new agency would be led by a committee charged with using a deliberative, inclusive process. The process would bring together key stakeholders including private businesses, state and regional economic development experts, legislators, university experts, WEDC board members and staff.

Rep. Barca and Sen. Lassa’s proposal is currently being drafted into a formal bill.

“Our new proposal for economic development in Wisconsin has tremendous promise, and we hope to gain input and support from professionals and experts in the days ahead,” Rep. Barca added. “This is not a final draft but a launching point to gather input from current board members, past Commerce Secretaries, regional economic development groups, and perhaps outside consultants to determine the best model to accomplish our goals and be a top 10 state for job creation.”

“WEDC’s brand is damaged beyond repair, and its credibility has been compromised to the point where internal reform efforts are no longer sufficient,” Sen. Lassa concluded. “The only way to regain the confidence of the business community, Wisconsin taxpayers, and this Legislature is to make major structural changes that will ensure greater openness and accountability for the state’s economic development programs, as well as success in creating good family-supporting jobs.”

Official Press Release from the offices of Rep. Peter Barca and Sen. Julie Lassa

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