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WEDC proposes broadband upgrades, training incentives in report on COVID's impact
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COVID-19 | ECONOMIC IMPACT

WEDC proposes broadband upgrades, training incentives in report on COVID's impact

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A new report from the state’s top economic development agency recommends Wisconsin rebuild its economy by increasing training opportunities for the unemployed, expanding statewide broadband, and supporting new businesses and startups.

Melissa Hughes, CEO of the Wisconsin Economic Development Corp., said the state will need to learn from the lessons of COVID-19, which shuttered businesses across the state due to mounting public health concerns and state efforts earlier this year to shut down or limit services at businesses in an attempt to minimize the virus’ spread.

WEDC CEO Melissa Hughes

Hughes

“I think what COVID-19 did was show where we have weaknesses in our system ... as we recover it’s really important that we learn our lessons,” Hughes told the Wisconsin State Journal.

The guidelines detailed in the report underscore previous statements by Hughes and Gov. Tony Evers that WEDC will be taking a new direction under Hughes’ leadership, with a larger focus on rural areas and startup businesses. Last fall, Hughes joined the nine-year-old state economic development agency, which got off to a tumultuous start under former Gov. Scott Walker.

“I’ve felt since I came into this role, that we should be having a conversation on where we’re investing our dollars on an economic development side, and this is an extension of what I think is a need to put our cards on the table and decide how we’re going to play this game, but we have to play it together,” Hughes said.

The 150-page report, titled “Wisconsin Tomorrow — An Economy for All,” was submitted to Evers and state lawmakers on Tuesday. In April they passed COVID-19 response legislation that directed WEDC to provide leaders with a plan to support major industries in the state that have been adversely affected by the outbreak.

The report also stresses the need to focus on racial disparities in the state workforce and create equitable inclusion for all communities.

“We felt that it was critical to acknowledge that a recovery plan has to take into account all of the communities in Wisconsin,” Hughes said.

Back to work

The Wisconsin Department of Workforce Development reported the state unemployment rate dipped slightly in May, but still sat at 12%. While retail and service industries experienced some of the biggest gains since April, those industries also took some of the hardest hits as stores and restaurants were forced to close as the pandemic spread.

In addition, a June COVID-19 Business Impact Survey, conducted by UW–Oshkosh, found that most of the nearly 750 respondents reported being open for business. However, 14% said they needed additional resources to reopen or decide not to reopen. Five percent reported hiring staff in the past month.

As Wisconsinites look to return to the workforce, it’s expected some will be forced to enter new industries in order to find employment, according to the report.

“We can assume that many will remain unemployed as their jobs will have disappeared, and as such, it is incumbent upon Wisconsin to endeavor to help these individuals obtain different skills necessary to obtain employment in other sectors,” according to the report.

WEDC recommends the state provide incentives for businesses that train new employees or work with job centers; invest in short-term certification programs at tech colleges and the UW-System; support early care and education to increase back-to-work initiatives; and address access to quality health care.

The report recommends expanding the state Medicaid program to fully leverage federal resources, something Republicans have repeatedly rejected.

Building broadband

WEDC also recommends substantial investment in the state’s broadband infrastructure in order to support growing programs at K-12 and higher education institutions, as well as a growing network of individuals working from home amid the pandemic.

The agency recommends increased funding for broadband expansion with a focus on school districts where children do not have access to high-speed internet.

“Fixing broadband in Wisconsin is not a moon shot; it’s not insurmountable,” according to the report. “But it is critical to economic development and recovery and must happen now.”

In March, the state Public Service Commission awarded $24 million in grants to help bring high-speed internet service to underserved communities. Another $24 million is expected to be awarded next year.

Supporting innovation

WEDC’s third recommendation to state leaders is to encourage and provide incentives for entrepreneurship and startup efforts.

“Entrepreneurship and innovation will be the catalysts for a faster and stronger recovery from the downturn,” according to the report. “Because new businesses are hiring as they grow, they are the best source of job creation — better than the older stabilized firms.”

Recommendations include piloting and funding programs that support entrepreneurs; provide incentives to established firms to work with seed accelerator programs; invest in a state venture fund focused on supporting entrepreneurs; and identify manufacturing trends that could provide entrepreneurial opportunities such as artificial intelligence or data science.

Moving ahead

Hughes acknowledged the state, which already has allocated more than $13.7 billion in federal and state COVID-19 relief dollars, cannot rebuild from the pandemic without additional federal assistance, due in part to the pandemic’s expected impact on the state’s coffers.

The Legislative Fiscal Bureau reported earlier this year that state sales tax collections were running about $380 million behind last year.

“Let’s look at our strengths, let’s look at what we have for state revenue and then let’s recognize that the impact of this is so big that we need to advocate and access and leverage every federal dollar that we can,” Hughes said.

Hughes said she anticipates the next step toward rebuilding the economy to include conversations with state leaders. However, bipartisan agreements between Evers, a Democrat, and the GOP-led Legislature have been few and far between. Lawmakers in the Assembly and Senate convened just once this year in response to the COVID-19 pandemic.

“We have, as a state, an opportunity to recognize this is a huge change and what do we want the other side of this to look like?” Hughes said. “We have the pieces in place for success in the future, we just need to move forward together.”

WEDC under fire

Irresponsible loans, a lack of oversight and personnel problems have plagued the Wisconsin Economic Development Corp. since its creation by Gov. Scott Walker's administration in 2011.

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De Pere businessman is being investigated by federal authorities in wake of not repaying $1.2 million state loan.

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Also, a state economic development group raised concerns bill would have chilling effect on economic development.

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At issue is the August vote by the state public records board to change the definition of "transitory correspondence."

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Violations could be punished by up to 15 years in prison, under the bill.

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A report recommends more collaboration with other state agencies, but not scrapping the five-year-old model.

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The proposal comes in the wake of reports of at least two companies that made misrepresentations and received loans.

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Gov. Scott Walker's administration has found another novel method to deny the public access to government records.

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The nonpartisan Legislative Fiscal Bureau raised the issue in August, but DOJ and DOA lawyers disagree there's a problem.

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Six months after a scathing audit and news reports about problems at the agency, Robin Vos is contemplating changes.

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The Democratic Senator says loans, including to Building Committee Inc., are "concerning and merit prompt review."

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The job-creation agency announced Friday the upcoming departure of its fifth chief financial officers in four years.

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They are the first confirmation authorities are investigating a company for allegedly misrepresenting itself to WEDC.

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The venture will include visits to two of China's largest cities, Tianjin and Nanjing.

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The agency gave out almost $90 million more in awards, but the total number of related jobs fell by nearly 6,000.

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Fitzgerald said WEDC "is still generating a lot of good successes."

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The Senate's GOP leader said he would consider approach if the proposal's authors don't serve on new board.

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The Legislature's audit committee met Wednesday to discuss the Legislative Audit Bureau report on the Wisconsin Economic Development Corp., which was released in May.

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State Rep. Samantha Kerkman said she is considering creating criminal penalties for defrauding WEDC.

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Rep. Samantha Kerkman is co-chairwoman of a committee that will be reviewing a recent audit of troubled agency.

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Mark R. Hogan was an executive at M&I bank for four decades and most recently a senior adviser at BMO Harris.

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The former Marshfield Clinic CEO steered the Wisconsin Economic Development Corp. through difficult times.

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Earlier this month two top officials left the agency. Other top executives have

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A series of blistering reports prompted a call for additional reviews of companies receiving taxpayer funds.

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Former top managers and employees say interference from Gov. Scott Walker's administration was a problem.

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The Legislature recently decided to keep four lawmakers on the oversight board for the troubled job-creation agency.

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Despite signs of trouble within the companies, jobs agency gave $1.4 million to two firms that have failed to repay the loans or create promised jobs.

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WASHINGTON — As Gov. Scott Walker begins his presidential campaign, he is confronting a stream of embarrassing revelations from a jobs agency …

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Walker was asked about a company that hasn't repaid a $500,000 loan obtained after misrepresenting itself.

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A recent audit found the agency wasn't verifying financial information of award recipients as policies prescribed.

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Raymond Dreger, a board member of the Wisconsin Economic Development Corp., and chairman of the agency's audit committee, said some of the agency's biggest problems have been resolved.

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Assembly Minority Leader Peter Barca says recently released documents include evidence of wrong-doing.

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The agency review comes on the heels of a State Journal investigation into a questionable $500,000 loan.

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Assembly Democratic Leader Peter Barca of Kenosha accused the Wisconsin Economic Development Corp. of stonewalling his requests for the documents.

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The state gave a federally funded $686,000 loan to Morgan Aircraft but failed to perform an up-to-date financial review of its finances. State officials say the company, which created no jobs, is expected to default on the loan by the end of the year.

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It was previously unknown whether documents justifying the 2011 unpaid loan were missing or never drawn up.

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As Scott Walker's signature job-creation agency continues to generate controversy, Democrats and Republicans call for changes to state's economic development approach.

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Walker tells reporters that then-Secretary Mike Huebsch was just doing his job when he pushed for a $500,000 loan that was never repaid.

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Two years after request for investigation into jobs agency, Ismael Ozanne says he is considering whether to open one.

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Rep. John Nygren, R-Marinette, says the Joint Audit Committee should review the loan to Scott Walker donor.

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The original proposal would have exempted disclosure of financial information and other company records.

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The governor never received a 2011 award letter to a struggling company, and still doesn't routinely get letters.

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The announcement follows a State Journal investigation showing top Scott Walker aides pushed for the loan deal.

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Building Committee Inc. heavily lobbied Democrats for funding, but only got money from Gov. Scott Walker's jobs agency.

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The loan was never repaid; it’s one of numerous agency awards that have raised questions since it was created under Walker.

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As the state made a $500,000 loan and later extended the due date for repayment, Building Committee Inc. was collapsing.

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After a scathing WEDC audit, Walker calls for diverting $55 million revolving loan fund to education and job training.

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The governor also answered questions about his John Doe comments and the state of race relations in America.

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The latest audit looked at more than 100 grants and loans made by the Wisconsin Economic Development Corp. and found many did not follow the agency's own policies.

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They spoke shortly before boards of the two agencies -- Wisconsin Economic Development Corp. and Wisconsin Housing and Economic Development Authority -- were set to meet in joint session to discuss the proposed merger.

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The state's flagship job creation agency has had trouble tracking loans and is looking for its fifth CFO in four years.

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The WEDC board approved the award for a creek project a year ago with no guarantee jobs would be created.

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CEO Reed Hall said he doesn't know if Gov. Scott Walker will appoint him to lead a new merged state agency.

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A Democrat said the proposal, part of a state economic development agency merger, "flies in the face of reason."

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In the letter, Lee Swindall said WEDC chief operations officer — a former aide to Gov. Scott Walker — Ryan Murray was “lacking either the talent or experience” to function in his position. 

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The board OK'd a $6 million tax credit for a $35 million Ashley expansion that would allow 1,924 layoffs.

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According to a WEDC memo, the Arcadia-based furniture maker is planning a $35 million expansion.

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The Joint Finance Committee held on to more than $35 million in surplus funds that the co-chairs want to use for economic development programs in the future.

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The beleaguered economic development agency had $34 million in unassigned reserves, or 54 percent of revenues, which was $18.4 million more than the limit set by its board.

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The state's quasi-public economic development agency has hired a new controller.

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The bills' measures would make the Wisconsin Economic Development Corp. board more independent, and would require an annual audit.

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The minority party repeats its call for stronger WEDC oversight.

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WEDC officials are grilled by the Legislative Audit Committee.

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Assembly Speaker Robin Vos, R-Rochester, said he thinks that the Wisconsin Economic Development Corp. is headed in the right direction despite some embarrassments. And he said that he supports the WEDC budget vote scheduled for Thursday to go forward.

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Gov. Scott Walker said he is working to set up a meeting of the board for the Wisconsin Economic Development Corp. in the wake of a scathing state audit. That meeting may be as soon as Wednesday, he said.

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Democratic lawmakers on Wisconsin's powerful finance committee are calling for for next week's budget votes on the state's troubled jobs agency to be postponed, saying the Wisconsin Economic Development Corporation shouldn't get more money until questions raised by a recent audit have been answered.

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A scathing state audit of Gov. Scott Walker's Wisconsin Economic Development Corporation calls for numerous improvements to the flagship jobs agency.

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Madison Police Chief Mike Koval calls the arrangement "a malady that has laid siege to our department."

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