Democrats propose splitting WEDC in two to improve performance, accountability

Two Democrats are touting a plan to replace the Wisconsin Economic Development Corp., abolishing an agency they said has been “lurching from crisis to crisis.”

At a news conference Tuesday, Assembly Minority Leader Peter Barca and state Sen. Julie Lassa — both of whom are on WEDC’s board — proposed a plan to replace WEDC with a hybrid agency that has two parts.

One, a cabinet-level agency called the Wisconsin Department of Economic Opportunity, would oversee all of the state’s economic development programs. The other, the Badger Innovation Corp., would be a state-owned private corporation that would handle trade missions, marketing and developing a vision for the state’s economic future.

The move would happen following a one-year implementation study and approval from lawmakers in the next biennial budget.

“WEDC is irretrievably broken,” Lassa, D-Stevens Point, said. “Its brand is damaged beyond repair, and its credibility has been compromised to the point where internal reform efforts are no longer sufficient.”

Gov. Scott Walker and the Republican Legislature created WEDC in early 2011 to replace the state’s Department of Commerce; Lassa and Barca emphasized they don’t want to go back to a Commerce Department.

Walker’s office, meanwhile, said WEDC is “more nimble and flexible to the needs of job creators across the state than the Department of Commerce and continues to be an important tool to spur economic growth.”

And WEDC spokesman Steven Michels said the agency is “committed to the mission of economic development for the State of Wisconsin and we are seeing results.”

“Last week alone WEDC announced that Dollar General and Quad/Graphics both chose Wisconsin over other states to expand their operations,” Michels said. “WEDC’s responsiveness was integral to those projects coming to Wisconsin and they will create over 1,000 jobs and $150 million in capital investment.”

Yet both Dems criticized WEDC over a recent audit that found WEDC has broken with its own policies and state statutes several times. They said their proposed Department of Economic Opportunity would more accurately report jobs numbers, work with the Department of Justice to recoup funds, boost requirements that prevent outsourcing and improve its focus on entrepreneurship.

“Taxpayers have a right to know that their investment in job creation is actually creating jobs in Wisconsin,” Lassa said.

The Badger Innovation Corp., meanwhile, would be overseen by a board made up of industry stakeholders and lawmakers and would be “truly responsive and responsible” to that board. Both Dems have said WEDC hasn’t been fully responsive to their requests for information.

Barca, D-Kenosha, acknowledged the specific plan faces difficulties, but described it as a “launching pad” for discussions with GOP lawmakers who’ve expressed concern over WEDC.

“We don’t have any illusions that the Republicans will just pass this as is by any stretch of the imagination,” Barca said. “But I think we need a new conversation. We need to look at it differently.”