Elected officials would no longer serve on the board that oversees the state’s merged economic development arm, under a proposal from Gov. Scott Walker.
The idea drew a swift rebuke from a top Democratic lawmaker who serves on the board of the Wisconsin Economic Development Corp. and has been one of its sharpest critics.
“It flies in the face of reason that an agency that has had a history of serious issues would move to have less accountability to taxpayers,” Assembly Minority Leader Peter Barca, D-Kenosha, said.
The proposal would effectively eliminate minority party oversight of the new board and consolidate appointments in the governor’s office.
After speaking at the Dairy Business Association’s conference Wednesday evening at Monona Terrace, Walker told the State Journal that the combined agency would still be subject to audits and “checks and balances.” But he insisted that the new model would bring the agencies more in line with other state agencies that rely mostly on gubernatorial appointments.
“That’s the way it is for every other agency, every other commission, every other board,” he said. “The Board of Regents doesn’t include members of both parties. It includes appointments that are made and confirmed by the Senate. These two entities are two of the very few out there that specifically have legislative appointments.”
Walker announced in his State of the State address Tuesday a proposal to merge WEDC — the state’s flagship job creation agency — and the Wisconsin Housing and Economic Development Authority (WHEDA).
On Wednesday he met with employees from both agencies to discuss the proposal — which includes keeping himself and other elected lawmakers off a proposed new oversight board — spokeswoman Laurel Patrick said.
“Probably the most important thing I said to them is that they didn’t need to worry — for the frontline staff — they didn’t need to worry about their jobs, that this wasn’t about massive job reduction,” Walker said. “If anything, there will be a few positions (cut) at the top. There will eventually just be one CEO.”
Patrick didn’t have an estimate of how much money the elimination of those positions would save. Those details will be included in Walker’s budget proposal, which he plans to introduce Feb. 3.
She said Walker prefers the new entity’s board be made up entirely of private citizens who would be appointed by the governor and confirmed by the Senate.
The effective date of the merger would be Jan. 6, 2016. More details will be available when the legislation is introduced, Patrick said.
Walker converted the state Commerce Department into WEDC four years ago, but the quasi-public agency was stung from the outset by accounting problems and more recently by turnover among top officials.
Democrats have cited those problems — which the agency says it has addressed — doing so again Tuesday when they criticized Walker’s merger proposal.
The WEDC board is made up of 15 members, including the governor, six private citizens appointed by the governor, and three appointments each for the Senate Majority Leader and Assembly Speaker, including a majority party lawmaker, minority party lawmaker and private citizen. The secretary of administration and secretary of revenue also serve on the board as non-voting members.
Though the board is dominated by appointees of the majority party and governor, minority party members can still critique board action, both within closed session meetings and in public.
WHEDA was created in 1971 and provides loans for business and agricultural development, and low- and moderate-income housing. It has a 12-member board, including four legislative members who must represent the majority and minority party in the Assembly and Senate, the secretary of administration, WEDC CEO and six citizen members appointed by the governor and confirmed by the Senate.
Sen. Rick Gudex, R-Fond du Lac, who was recently appointed to the WEDC board, said in a statement he supports merging the agencies, but offered neither praise nor criticism for removing lawmakers from the board.
“It is too early to comment on the makeup of any boards or agencies,” Gudex said. “As the governor stated, the elimination of elected officials is his preference. Any changes will have to be made through the Legislature. I am committed to making sure that any merger/consolidation legislation is presented in a way that best represents the citizens of the state.”
State Journal reporter Jeff Glaze contributed to this report.