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Democrats say economic agency merger should be put on hold (UPDATE)

Associated Press

MILWAUKEE (AP) — The Democratic leader of the Wisconsin Assembly said Thursday that Gov. Scott Walker should “put on ice” his proposed merger of the state’s chief economic development agency with one that hands out low-interest housing loans.

Speaking before a joint meeting of the two boards, Assembly Minority Leader Peter Barca — a member of one of them — called for the proposed merger to be paused so there could be more study of the idea.

“It’s an ill-conceived idea,” Barca said of Walker’s proposal to merge the Wisconsin Economic Development Corp. and the Wisconsin Housing and Economic Development Authority. Barca said instead of moving quickly, there should be more research done on the implication of the proposed merger in order to “get it right.”

Barca is a member of WEDC, a quasi-private board that Walker created in 2011 to lead job-creation efforts in Wisconsin. Barca was joined by state Sen. Nikiya Harris Dodd, a member of the WHEDA board which hands out loans for affordable housing, in criticizing the merger.

Harris Dodd, of Milwaukee, said she feared what would happen to the low-interest housing loans that WHEDA distributes should it be merged with the agency in charge of economic development.

“There’s not a problem here,” Harris Dodd said. “Nothing is broken.”

Walker initially proposed the merger in his state budget, which is slated to pass the Republican-controlled Legislature in June. But this week, at Walker’s request, a separate bill was introduced. That will draw more attention to the idea and likely slow its passage.

There are several differences between what Walker proposed and the direction taken in the bill. In one change, lawmakers from both parties would still have seats on the newly created board instead of being removed as Walker initially proposed.

Barca said he viewed that as a positive step and he hopes that introduction of the bill will lead to more scrutiny of the proposal. Walker wants the merger to take effect by Jan. 1.

Democrats have been critical of the proposal for not allowing financial audits, something that can be done for both of the existing boards currently. Audits of WEDC in 2012 and 2013 delineated numerous failings, including losing track of $12 million in overdue loans and giving money to ineligible projects.

Barca said WEDC has made numerous improvements, but it’s taken a long time and moving too quickly to again significantly change the agency could create more havoc. High turnover in top positions has also plagued WEDC during his four years in existence.

Walker was slated to lead a discussion of the idea during a joint meeting of the WEDC and WHEDA boards on Thursday afternoon. The new entity would be called the Forward Wisconsin Development Authority. Unlike WEDC, which Walker chairs, the governor would not be a part of the new board.

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