The latest ranking from Wisconsin Public Interest Research Group Foundation and Frontier Group, both liberal advocacy organizations, underscores efforts at the Wisconsin Economic Development Corp. to increase transparency when taxpayer dollars are used to fund economic development subsidies.
While the state was criticized for a severe lack of spending transparency in a 2012 WISPIRG report, this year’s analysis found Wisconsin is second only to Ohio for providing online access to the state’s use of taxpayer dollars to subsidize business projects or economic development.
More than a third of U.S. states received an “F” grade, while Wisconsin is one of just four to receive a “B” grade or higher. Wisconsin is also one of only three states that publishes an annual grants report that tracks payments to corporations.
The 2019 report is U.S. Public Interest Research Group’s 10th state transparency evaluation and the first to focus exclusively on economic development spending. States were graded on the depth and breadth of public information included on government websites, as well as the presence of statutes requiring economic development subsidy transparency.
Wisconsin earned an “A” grade in U.S. PIRG’s 2018 report, which graded states on their online access to government spending.
R.J. Cross, Frontier Group policy analyst and lead author on the report, said Wisconsin had traditionally received an “F” grade on spending transparency reports until the 2013 launch of government spending portal OpenBook Wisconsin, which tracks state expenditures.
“Ever since then it consistently became an ‘A’ state,” Cross said.
WEDC, which was created in 2011 by former Gov. Scott Walker, has been the subject of several scathing audits and news reports about mishandled loan applications and problems tracking job creation and awards.
WEDC CEO Melissa Hughes, the agency’s fourth since 2011, was appointed earlier this year by Democratic Gov. Tony Evers to bring a statewide focus and further stability to the economic development agency. She began Oct. 1, but so far has declined multiple interview requests from the Wisconsin State Journal.
In an emailed statement, she said, “Transparency and accountability are core values in Wisconsin and at WEDC.”
“Over the years, WEDC staff have worked to make our programs and processes as open as possible to Wisconsin taxpayers and stakeholders,” Hughes said. “We welcome the WISPIRG Foundation’s and Frontier Group’s recognition of those efforts, and we will continue to build on them.”
Room for improvement
Cross said the state could improve its transparency rating by adding local economic development subsidy information to the state website. Another area of improvement would be to publish Wisconsin’s tax expenditures report every year, rather than biannually as it is currently done.
“It’s much more preferable that taxpayers and government officials alike are able to have access to information that is updated every year,” Cross said.
Since 2007 state departments have had to report any economic development programs they administered in the previous year. For Wisconsin, there are 57 economic development programs administered by nine state agencies.
The quasi-private WEDC, which dispenses more than $3.1 billion a year in tax credits, grants, loans and bonds, has struggled with criticism at times since its inception.
WEDC’s most notable move was the record-breaking tax credit deal with Foxconn Technology Group, a Taiwan-based electronics manufacturer, to bring an electronics manufacturing campus to Racine County. The company could receive more than $4 billion in state and local tax subsidies if it invests $10 billion and creates 13,000 jobs in Wisconsin over 15 years.
Earlier this year, an audit by the nonpartisan Legislative Audit Bureau found several problems with how WEDC tracks job creation and the awards it provided to companies.
But the agency has continued to improve. Audit recommendations have decreased over the years from 30 in 2013 and 24 in 2015, to 19 in 2017 and 10 in this year’s report.
©2019 The Wisconsin State Journal (Madison, Wis.). Distributed by Tribune Content Agency, LLC.
