WEDC handed out about $48.3 million less in awards last fiscal year, according to the agency’s latest annual economic development report.
The report, approved by the WEDC board yesterday, shows WEDC handed out 354 awards during FY16 that totaled $197.3 million. That compares to 351 awards the previous fiscal year, when WEDC handed out $245.7 million.
A decline in tax credits accounted for $32.1 million percent of the drop. Part of that is because WEDC consolidated two programs into one but the latter didn’t start for a while into the fiscal year. It also is due to decreased interest in the historic preservation tax credit, which had seen significant pent-up demand the previous fiscal year after an expansion of the credit.
The rest of the $48.3 million drop was largely because fewer municipalities sought industrial revenue bonds to support industrial development. Under that program, WEDC is authorized to allocate bonding authority on behalf of those municipalities, but WEDC has no control over whether the municipalities seek those bonds, WEDC spokesman Mark Maley said.
WEDC’s leverage ratio, which measures how much outside money the state investment will bring in, increased to 11-to-1, up from 9-to-1 in FY15.
WEDC Secretary and CEO Mark Hogan, who hits a year on the job next month, called it a “good report.”
“This is a good summary of what we’re doing, but there’s a lot more that’s being done in the state of Wisconsin through our local and regional partners,” Hogan said at the meeting, which took place at the Fitchburg luxury appliance maker Sub-Zero Group, Inc.
The number of jobs WEDC’s programs impacted stayed about the same, just below 27,000. That’s more than double the FY16 goal of 12,134, though Sen. Julie Lassa, D-Stevens Point, questioned why last year’s jobs goal was almost half of the 23,396 goal of FY15.
WEDC spokesman Mark Maley said in an email that’s due to the consolidation of two WEDC tax credit programs. He said the agency “was conservative” in setting a jobs goal of 2,800 for the new program, called the Business Development Tax credit, though it actually impacted 5,000 jobs.
WEDC had also lowered its jobs goal for one of the programs that was phased out, as companies had been increasingly turning to the separate manufacturing and ag tax credit. The agency had set the old program’s goal at 2,149 jobs impacted, but the actual figure of jobs impacted “exceeded expectations” and was 7,908.
The meeting included some tension between Lassa and outgoing Sen. Rick Gudex, R-Fond du Lac.
Lassa and Assembly Minority Leader Peter Barca, who are both WEDC board members, have been consistent critics of the agency. This session, they called for the agency to be scrapped, saying its brand is “irretrievably broken” following years of negative headlines.
Gudex, though, said yesterday’s report shows the agency has “consistently exceeded” its goals despite facing tough competition from other states. The “sad part,” he said, is the critics within the state who “keep re-hashing the re-hash because it’s good fodder.”
“If we don’t have people on the board that don’t wish to participate in a positive way, maybe they should move on,” Gudex said.
Later in the meeting, Lassa responded that WEDC’s board needs to “take its oversight responsibilities strongly” due to the amount of taxpayer funds involved.
“I’m hoping you’re not suggesting we become a rubber stamp and not fulfill our duties to the taxpayers,” Lassa said.
Lisa Mauer, the WEDC board chair and Rickert Industries CEO, said the board takes its “responsibility as fiduciaries of this organization” seriously.
“It’s my hope as we go forward that we can work closely together and find that common ground to continue to improve WEDC,” she said.
Lassa, though, gave the agency credit on a couple of points. She noted the awards for minority business development are up $175,000 and that the agency doubled the amount of awards for its program aimed at developing targeted industries.
The demand for that program, said WEDC vice president Lee Swindall, continues to grow as groups like the energy research group M-WERC and the Madison entrepreneurial hub StartingBlock seek funds to help startups.
“That is really good news,” Lassa said.
— By Polo Rocha,