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Wisconsin GOP legislation eases corporate tax break rules

December 10, 2018
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FILE - In this Oct. 19, 2018, file photo, Democratic challenger Tony Evers, left, and Wisconsin Gov. Scott Walker, a Republican, shake hands during gubernatorial debate in Madison, Wis. Republicans pushing to hang on to power in Wisconsin and Michigan aren't stopping at curbing the authority of incoming Democratic governors. They're also trying to hamstring Democrats who are about to take over as attorneys general. (Steve Apps/Wisconsin State Journal via AP, File)
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FILE - In this Oct. 19, 2018, file photo, Democratic challenger Tony Evers, left, and Wisconsin Gov. Scott Walker, a Republican, shake hands during gubernatorial debate in Madison, Wis. Republicans pushing to hang on to power in Wisconsin and Michigan aren't stopping at curbing the authority of incoming Democratic governors. They're also trying to hamstring Democrats who are about to take over as attorneys general. (Steve Apps/Wisconsin State Journal via AP, File)

MADISON, Wis. (AP) — Companies seeking tax credits from Wisconsin’s troubled job-creation agency would face less scrutiny under a provision Republicans included in a package of lame-duck legislation designed to weaken newly elected Democrats.

The measure awaiting GOP Gov. Scott Walker’s signature would loosen the reins on an agency he created, which has marred by allegations of failing to recover loans from some companies and handing out $126 million without a formal review.

Gov.-elect Tony Evers, who ousted Walker in last month’s election, would be blocked from overseeing the Wisconsin Economic Development Corporation for nine months under another provision in the lame-duck package. It’s one of several components in the legislation that would reduce the powers of Evers and the incoming Democratic attorney general.

Current law requires the WEDC to annually verify payroll and employment data from tax credit recipients to make sure they’re creating enough jobs to qualify. State auditors found last year that the agency isn’t living up to that requirement and was accepting information recipients submitted as accurate and complete.

The lame-duck legislation would erase those annual verification requirements. The agency instead would be required to have a third party verify a sampling of the information. Recipients also would have to send a signed statement to WEDC attesting to the accuracy of the information they submit.

WEDC’s chief executive officer, Mark Hogan, told reporters Monday that the agency can’t possibly verify information about the tens of thousands of employees that work for the 300 or so credit recipients. The agency has been verifying data samples for years and the lame-duck bill simply codifies that practice into law, he said.

“You’re never going to be able to independently verify over 200,000 employees,” Hogan said. “It’s a process that cannot work. The only solution was to change the statutes to codify what we’re doing.”

Hogan said changing the law has been his “top priority” for three years. He tried to get lawmakers to pass the changes before the Legislature adjourned its two-year session this past spring, but legislators told him then it was too late.

WEDC is a quasi-governmental agency Walker created in 2011 that hands out grants, loans and tax credits to businesses and other organizations. A May 2017 audit found the agency didn’t require recipients to supply enough detailed information to determine how many jobs were created or retained as a result of the agency’s award.

WEDC officials played a key role in persuading Foxconn Technology Group to build a huge flat-screen plant in Mount Pleasant. The agency administers an unprecedented $3 billion state incentives package that Walker and Republican lawmakers created for the manufacturer. Walker has promised that if Foxconn doesn’t create jobs it won’t receive state tax credits.

“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 multistate 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.

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Follow Todd Richmond on Twitter at https://twitter.com/trichmond1

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This story has been corrected to reflect that Shilling is the minority leader, not the majority leader.

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