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Finance committee reinstates WEDC loan program

Associated Press

MADISON, Wis. (AP) — Gov. Scott Walker’s jobs agency would be able to issue business loans again under provisions in the state budget the Legislature’s finance committee approved Tuesday in a sign that Republicans’ faith Walker’s troubled flagship economic engine is growing again.

The 2015-17 state budget prohibited the Wisconsin Economic Development Corp. from originating new loans totaling more than $10 million in fiscal year 2015-16 and $5 million in 2016-17. The budget also prohibited WEDC from issuing any new loans other than loans to develop technology after this June 30.

WEDC has faced frequent scrutiny over its operations since Walker and Republican lawmakers created the agency in July 2011 to replace the Department of Commerce. The agency hasn’t recovered loans made to troubled companies, gave out $126 million without a formal review and has experienced high turnover in top positions. Republicans included the loan prohibitions in the budget in response to the problems. They have allowed WEDC to continue issue tax credits and grants, however.

Walker included a plan his 2017-19 budget that would fully restore WEDC’s ability to issue loans as long as the loans are funded by repayments of other loans and not new tax dollars.

The Legislature’s Joint Finance Committee, which is revising Walker’s budget before forwarding the spending plan on to the full Assembly and Senate, decided Tuesday to follow Walker’s plan and allow WEDC to issue loans again. The committee removed the provision that the loans would have to be funded through repayments of other loans, however.

Sen. Alberta Darling, the committee’s co-chairwoman, said she believes WEDC has improved its operations in the last two years and is in a much better position now. She added that many people and business around Wisconsin depend on WEDC’s loan program.

All 12 Republicans on the committee voted for the plan. The four Democrats on the panel voted against it.
The committee was also scheduled Tuesday to vote on the state Department of Justice and Department of Military Affairs’ budgets. DOJ’s budget includes grants to cover police overtime, $2 million for upgraded DNA analysis kits and an additional $1 million for drug investigations. DMA’s budget provides $500,000 in grants to help police form crowd-control units.

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