Is Wisconsin Getting Its Money’s Worth on Economic Development?

Wednesday, June 13, 2012 at 5:39 PM by

The State of Wisconsin spent nearly a quarter of a billion dollars on economic development over the last biennium, according to a new report from the Legislative Audit Bureau. Unfortunately, state agencies administering the economic development programs did not track or report complete information about program results. The result is that it is difficult to track the state’s return on investment for some economic development programs.

Economic development is big money in Wisconsin. In the 2009-11 biennium, Wisconsin spent $227 million on economic development, including $91 million from federal sources. To put this amount in context, it’s about 60 percent of what the state spent on the entire technical college system over those two years. The Milwaukee Journal Sentinel’s article on the report can be read here.

The economic development programs reviewed in the report included grants and loans, bonding authorization, loan guarantees, loan subsidies, tax incentives, and financial assistance – but not tax credits targeting economic development, which can be substantial. As of June 2011, more than three hundred state employees in eight different state agencies administered 139 different economic development programs.

State agencies administering the economic development programs did not always report program results as required, according to the report. State agencies could provide results for only 82 percent of programs active in fiscal years 2010 and 2011, and only 70 percent of mandated reports were actually filed by assistance recipients. Only 65 percent of recipients fully achieved the contractually required results, with another 21 percent partially achieving the required results.

The result of this lax tracking is that too many questions are left unanswered about the value of the economic development spending to Wisconsin. If state agencies are not collecting program results as required, if beneficiaries of the economic assistance are not providing the information required, and if many beneficiaries are not achieving the required results, it is difficult to know whether Wisconsin is wisely spending tax money on these programs. Economic development expeditures can be an important tool to help create jobs and boost the state’s economy, but we need to make sure we know what Wisconsin is getting for its money.

Tamarine Cornelius

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