Businesses getting state incentives for economic development projects would have to disclose major changes to their plans and could not use state dollars to move jobs out of state under Gov. Tony Evers’ proposal for the next state budget.
The budget proposal, set to be released in full Thursday, would also create new incentives for renewable energy projects, according to a summary of changes Evers will propose for the Wisconsin Economic Development Corp. provided Sunday to the Wisconsin State Journal. It was first reported by WisPolitics.com.
Evers aims to make the state’s quasi-public jobs agency, also known as WEDC, operate more openly and track state dollars going to businesses more effectively.
Evers’ plan, while seeking changes to WEDC, falls far short of his campaign proposal to abolish it and move its functions elsewhere in state government.
One provision in the proposal says that for any contracts in which the state provides business tax credits of more than $5 million, the recipient would have to update the state of its plans for employment and investment “if there are any material changes to the activities negotiated in its contract.”
That comes shortly after Taiwanese electronics giant Foxconn revealed it is changing its plans for a $10 billion campus near Racine, for which the state has pledged $3 billion in tax credits plus other state and local subsidies. The company said it is maintaining plans to build a liquid-crystal-display panel manufacturing plant in Mount Pleasant, but it will make smaller panels than what originally was proposed.
Evers’ office did not answer questions on the plan Sunday, including questions about whether this provision would apply to Foxconn or if its inclusion was influenced by recent developments related to Foxconn.
GOP legislative leaders and WEDC officials also could not be reached Sunday for comment on the plan.
Evers’ plan also would require that no loan, grant or tax credit awarded by WEDC be used “to relocate jobs outside Wisconsin or reduce net employment by a recipient in Wisconsin.”
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A State Journal report in 2014 found WEDC and its predecessor, the state Commerce Department, had awarded state funding to companies that outsourced jobs.
On Thursday, Evers is set to unveil his full proposal for the 2019-21 state budget, the two-year cycle starting July 1. Other provisions in his WEDC plan would:
- Provide a new incentive to invest in renewable energy generation or energy efficient projects. The plan would change the state’s business development tax credit to provide an additional 5 percent incentive for such projects.
- Direct WEDC to grant at least $1 million a year to regional economic development organizations, in what Evers’ office calls an effort “to promote widespread economic opportunity around Wisconsin.”
- Restrict jobs the agency could report as being created or retained by companies that receive state assistance. Under the plan, they could only report jobs created or retained that meet terms for the programs in which the company is participating. That follows a recommendation made by the Legislature’s nonpartisan audit bureau in 2017.
- Change how tax credits are calculated for restoring historic buildings. A $3.5 million limit for awards under the state’s historic rehabilitation credit program would be applied on a per-project, as opposed to a per-parcel, basis.
Created in 2011 by former Gov. Scott Walker, WEDC has been the focus of fierce disagreement between its GOP defenders and Democratic critics.
Evers has criticized its secrecy and management of public funds, while Republican lawmakers moved aggressively during a December lame-duck legislative session to wrest control of the agency.
One of the laws passed during the controversial session, held just before Evers took office, bars the governor from appointing the agency’s CEO until September and gives GOP lawmakers control of its governing board.
Another law moved a state liaison position for the Foxconn project from the Department of Administration to WEDC. Evers’ proposal moves that position back to DOA.