Problems at WEDC reflect poorly on GOP

New problems at the Wisconsin Economic Development Corp. have come at a bad time for Republicans who are hoping to win the White House and gain control of the Legislature.

Virtually every Republican candidate from Mitt Romney on down likes to claim the GOP is better than Democrats in creating jobs. They say they know how to do it.

Gov. Scott Walker and the Republican-controlled Legislature created the quasi-public agency in 2011 as a way to spur job growth in the state. Its functions previously had been housed in the Commerce Department, a traditional state agency.

Walker won the 2010 election by vowing to create 250,000 jobs in four years. He said he wanted an agency that could operate more like a business. The latest news suggests WEDC has missed that goal.

Businesses don’t lose track of their overdue accounts.

The corporation has lost track of more than $7 million in past due, job-creation loans to business. About 16 percent of the agency’s loan totals are in the overdue accounts. Loan collection activities apparently were lost in the shuffle as the old commerce department was turned into a quasi-public agency.

Democrats repeatedly contended the Walker administration acted too quickly in creating the quasi-public agency. The criticisms run from a lack of planning to sheer incompetence.

Ryan Murray, chief operating officer at WEDC, conceded that tracking the loans was lost in the change.

“We dropped the ball…” he said.

Murray, a former top aide to Walker, said officials knew it “was going to be an embarrassing story.”

It’s not the first problem at WEDC. Over the summer, the Walker administration had to suspend and restart bidding for a state contract after newspapers reported WEDC offered tax credits to one of the bidders if it won the contract. That would have been illegal.

The federal government also has had concerns about WEDC. The U.S. Department of Housing and Urban Development criticized the handling of almost $10 million in economic development grants made by WEDC and Walker’s Department of Administration.

The Walker administration didn’t bother to tell WEDC board members about the federal inquiry. Newspapers reported it.

Perhaps with the election just weeks away, the administration wasn’t anxious to report the latest trouble. The administration didn’t mention the lost overdue-loan information in testimony to the Legislature’s Joint Audit Committee; agency officials said they wanted to tell board members first about the problem. Again, newspaper reporting brought the issue to the public attention.

Newspapers also have reported that Wisconsin lags in private job creation among the Great Lakes states. Some may contend the public-employee turmoil and recall elections have discouraged private employers from hiring more people in Wisconsin.

A more likely explanation is historical. Wisconsin’s economy has a heavy manufacturing component, and that sector has been slow to bounce back from previous economic downturns. Wisconsin’s economy usually is pegged at about two percent of the national economic picture.

Presidential candidate Romney says he will create 12 million jobs in the next four years. Two percent of that total would be 240,000, just about what Walker claimed in the 2010 gubernatorial race. The job total will be a key issue when Walker runs for re-election in 2014.

Tags: guest editorial, opinion