Walker and the Wisconsin Economic Development Corp. (copy) (copy) (copy)

Gov. Scott Walker announces his appointment of Reed Hall in early 2013 to head the Wisconsin Economic Development Corp.


Democrats and Republicans on the Wisconsin Legislature's budget committee agreed on something on Thursday: changes to Gov. Scott Walker's flagship jobs agency are necessary. 

That's where the agreement ended. 

"The first step in starting to fix your economic development agency is admitting you have a problem," quipped Rep. Gordon Hintz, D-Oshkosh. 

Both parties introduced omnibus motions aimed in part at putting more legislative oversight on the embattled Wisconsin Economic Development Corporation. The proposals even shared some elements, including removing Walker as chairman of the WEDC board.

But while Democrats insisted that Walker was being "fired" — or that he should be — Republicans countered that Walker himself requested to be removed as a means of spurring productivity.

"I think he loves Wisconsin so much that he felt that if some of the members on the board feel like the group would be better off if he would not be the chair ... I'd say that's leadership on his part," said Joint Finance Committee co-chair Sen. Alberta Darling, R-River Falls. "He feels that he is a factor that's not contributing to constructive dialogue, and he knows that chemistry has has to be changed. I give him credit for doing it, so let's see what happens."

JFC co-chair Rep. John Nygren, R-Marinette, said the move is about depoliticizing the state's economic development agency, citing discord on the board to the point of distraction from its mission.

Sen. Jon Erpenbach, D-Middleton, shot back that if the governor did ask to be removed from the board, "he's running away from the problem."

The debate meandered as lawmakers sparred over how successful the agency has been, whether similar missteps occurred under Democratic former Gov. Jim Doyle's commerce department and whether the government should be so deeply involved in economic development to begin with.

Sen. Lena Taylor, D-Milwaukee, said WEDC has become "a hot mess."

In his two-year budget, Gov. Scott Walker called for a merger between WEDC and the Wisconsin Housing and Economic Development Authority, to be known as the Forward Wisconsin Development Authority. Under that plan, Walker called for removing all elected officials from the board, including himself.

Earlier this month, Walker scrapped the merger plan, calling for all proposed agency mergers to be removed from the budget. He also asked lawmakers not to move forward with separate legislation proposing the same thing.

Though the governor's request came hours after a searing audit found the agency hadn't followed state law or tracked job creation, he cited concerns from legislators, stakeholders and the WEDC and WHEDA boards in his request to halt the merger.

Since then, bad news has continued to follow WEDC, the quasi-private economic development agency the governor created to replace the state’s commerce department four years ago. Days after pressing pause on the FWDA merger, Walker said he wants to phase out direct loans to businesses.

A Wisconsin State Journal investigation, published Sunday, revealed that Mike Huebsch, Walker's former secretary of Administration, pushed for a $4.3 million WEDC loan for Building Committee Inc. — eventually reduced to $500,000, which was not repaid — even as the company was collapsing. Walker's move to halt loans came hours after the state released records relating to BCI's loan on Friday.

"If we had someone at WEDC who had Google, we could've found out some of these things," Hintz said. "This isn't 'The Girl With the Dragon Tattoo.'"

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In La Crosse last weekend, Walker defended WEDC itself, saying the “broader vision is actually very successful,” according to the Associated Press.

Republicans on Joint Finance agreed, touting examples throughout the state where WEDC played a role in job growth. Nygren said he stands by his previous assertion that "WEDC is a proven job creator."

Rep. Dean Knudson, R-Hudson, said he disagrees with the agency's core mission, adding that he doesn't think it's the proper role of government to be as involved in economic development at the state level as WEDC is. 

"We share your major concern about WEDC," Darling said. "Everybody at this table wants more accountability, transparency, legislative input and better results. There’s no question about that."

But generalizations and negative rhetoric do a disservice to both WEDC and the state's economy, she said. 

Nygren told reporters that further concerns will be addressed by the Legislative Audit Committee. He said the model for the agency can work well, if improvements are made.

The Republican motion, which passed on a party-line vote, will scrap plans for the merger, along with a new $55 million regional revolving loan fund. It will also abandon proposed changes to WEDC's open records policy.

Rep. Amy Loudenbeck, R-Clinton, said the committee was only looking at first steps, noting that job creation doesn't happen overnight and neither will reforms.

The changes the committee approved "are going to be important," Loudenbeck said, "but there's more to come."

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Jessie Opoien covers state government and politics for the Capital Times. She joined the Cap Times in 2013 and has also covered Madison life, race relations, culture and music. She has also covered education and politics for the Oshkosh Northwestern.