'Business as Usual' is NOT Getting it Done in Wisconsin
Lasee’s Notes
Imagine being given a large sum of money to invest in a business venture – with no strings attached and no accountability if your business didn’t succeed. Sounds great doesn’t it? Now what if it was your money on the line? Would you be willing to make that investment? That wouldn’t be wise. Unfortunately that seems to be the criteria state agencies use to determine which businesses get our money in the form of economic development grants and loans.
The non-partisan Legislative Audit Bureau released a report on the state’s economic development programs. According to the Audit Bureau, the state currently offers 152 programs (one hundred and fifty two!!) through eight state agencies for economic development purposes.
From 2001-2005, these programs awarded $180 million in grants and loans, $56 million in tax credits, $240 million in bonding authorizations, and $64 million in loan guarantees. That’s over $500,000,000 in five years or roughly $7 million for each of Wisconsin’s 72 counties.
What did we get for our half-billion dollar investment? Good question. The Audit Bureau couldn’t say for sure because the majority of our development programs are not tracked properly. In other words, we don’t know where the money is going in many cases.
The audit did uncover several ridiculous uses of state development dollars including:
• $29 million in tax credits to insurance companies which created 316 jobs. That means taxpayers spent nearly $92,000 per job. Great investment considering the jobs most likely paid much less. Why are we subsidizing insurance companies anyway?
• At least two companies laid off employees within three years of receiving state grants to create jobs.
• Duplication of program goals is the norm. We have 34 programs devoted to helping businesses purchase land or buildings and 26 programs for business planning. (I wonder which ones of these are truly effective.)
• 21% of state assistance was given to projects in eight counties with no indicators of economic need.
• 17 of the 152 programs are inactive, yet still receive some state support.
Why is this important to you?
It’s our taxpayer money at work - at high costs and low value with little accountability.
Part of the reason taxes are so high is we tax all of us more to do silly things like this. All in the name of economic development, so politicians can say that they did ‘something.’
Whatever happened to competition? What happened to supporting good businesses instead of propping up businesses with millions of dollars in grants and loans that may not make it anywhere else? I contend that we often prop up companies that are on their way out instead of giving good companies what they need to succeed (more sensible regulation and lower taxes).
We pay a lot of money for short term gain in the name of ‘economic development and job creation’ which leads to long term pain caused by a changing economy.
We need to be better stewards of the taxpayer’s money. Rather than taxing all of us and good businesses more only to dole it out to businesses that may not be economically viable in the future, wouldn’t it make more sense to allow profitable companies to keep more of their money to pay their employees, pay down their debt, or create more jobs?
Too often our politicians in Madison want to look good and appear as if something is getting done. Instead of being good stewards and making sure our money is spent wisely, we accept ‘business as usual’ and move on to the next press appearance.
We can and must do better.
------------------------------------------------------------------------------------
Lasee’s Notes is a weekly column by Representative Frank Lasee, 2nd Assembly District, covering events in the Legislature and statewide.
Imagine being given a large sum of money to invest in a business venture – with no strings attached and no accountability if your business didn’t succeed. Sounds great doesn’t it? Now what if it was your money on the line? Would you be willing to make that investment? That wouldn’t be wise. Unfortunately that seems to be the criteria state agencies use to determine which businesses get our money in the form of economic development grants and loans.
The non-partisan Legislative Audit Bureau released a report on the state’s economic development programs. According to the Audit Bureau, the state currently offers 152 programs (one hundred and fifty two!!) through eight state agencies for economic development purposes.
From 2001-2005, these programs awarded $180 million in grants and loans, $56 million in tax credits, $240 million in bonding authorizations, and $64 million in loan guarantees. That’s over $500,000,000 in five years or roughly $7 million for each of Wisconsin’s 72 counties.
What did we get for our half-billion dollar investment? Good question. The Audit Bureau couldn’t say for sure because the majority of our development programs are not tracked properly. In other words, we don’t know where the money is going in many cases.
The audit did uncover several ridiculous uses of state development dollars including:
• $29 million in tax credits to insurance companies which created 316 jobs. That means taxpayers spent nearly $92,000 per job. Great investment considering the jobs most likely paid much less. Why are we subsidizing insurance companies anyway?
• At least two companies laid off employees within three years of receiving state grants to create jobs.
• Duplication of program goals is the norm. We have 34 programs devoted to helping businesses purchase land or buildings and 26 programs for business planning. (I wonder which ones of these are truly effective.)
• 21% of state assistance was given to projects in eight counties with no indicators of economic need.
• 17 of the 152 programs are inactive, yet still receive some state support.
Why is this important to you?
It’s our taxpayer money at work - at high costs and low value with little accountability.
Part of the reason taxes are so high is we tax all of us more to do silly things like this. All in the name of economic development, so politicians can say that they did ‘something.’
Whatever happened to competition? What happened to supporting good businesses instead of propping up businesses with millions of dollars in grants and loans that may not make it anywhere else? I contend that we often prop up companies that are on their way out instead of giving good companies what they need to succeed (more sensible regulation and lower taxes).
We pay a lot of money for short term gain in the name of ‘economic development and job creation’ which leads to long term pain caused by a changing economy.
We need to be better stewards of the taxpayer’s money. Rather than taxing all of us and good businesses more only to dole it out to businesses that may not be economically viable in the future, wouldn’t it make more sense to allow profitable companies to keep more of their money to pay their employees, pay down their debt, or create more jobs?
Too often our politicians in Madison want to look good and appear as if something is getting done. Instead of being good stewards and making sure our money is spent wisely, we accept ‘business as usual’ and move on to the next press appearance.
We can and must do better.
------------------------------------------------------------------------------------
Lasee’s Notes is a weekly column by Representative Frank Lasee, 2nd Assembly District, covering events in the Legislature and statewide.
posted by John Q Cheesehead | 2:07 PM
0 Comments:
Post a Comment
<< Home