I was reading Governor Walker’s budget proposal last night – yes, that’s what constitutes a fun Friday evening for me these days – and among its provisions I noticed that nearly $100 million was allocated for something called the “Wisconsin Economic Development Corporation”.
Much of the budget is transparently appalling, witness the nearly $900 million in education cuts, so that the Corporation at first glance seems benign. According to the budget proposal, it “supports new business start-ups, business expansion and growth by providing economic programs that supply business support, expertise and financial assistance to companies investing and creating jobs in Wisconsin.” A seemingly noble enterprise, but given Walker’s radical agenda in all other areas I thought I should take a closer look.
It turns out that the Corporation is set to replace a large chunk of the Department of Commerce, which Walker in fact eliminates entirely, with its 336 employee positions, in his budget proposal. The most telling sentence is this one:
Statutory authority related to most programs at the Department of Commerce have [sic] been eliminated and will be replaced by the by-laws of the corporation in an effort to insure maximum flexibility.
The more I looked into it, the more it seemed to me that this was the perfect example of Walker’s ideology. He is quite literally replacing a standard government agency with a corporation. And just what might that corporation do? More details are below.
The Wisconsin Economic Development Corporation that will provide such wonderful flexibility for the governor was created earlier this year by 2011 Wisconsin Act 7.
As defined by the act and reiterated in the budget proposal, the Corporation is administered by a board with 13 members. The governor is a member and also the chair. Of the other 12 members, the governor appoints 6 directly, and his tame senate majority leader and assembly speaker appoint three each. The rules for these latter six members are such that, even in the event that Democrats regain control of both houses, at least 9 out of the 13 board members will be the governor’s appointed cronies or legislators of his party.
Day to day operations are handled by a CEO, who is appointed by the governor and paid whatever salary the board deems appropriate.
Much of Act 7 consists of modifications to existing statutes in which the Corporation is added to a long list of entities that constitute a “state agency” for definitional purposes.
There are at least two exceptions, however, in which the Corporation is specifically exempted from the definition of an agency or authority for purposes of the relevant statute. The two statutes are 1.12, and 16.15. When I realized these were exceptions, I took a closer look.
1.12 relates to state energy policy. Its definition of a “state agency” also applies to 1.13, related to land use planning activities. Among the provisions from which the Corporation is exempted is this one:
A state agency or local governmental unit shall investigate and consider the maximum conservation of energy resources as an important factor when making any major decision that would significantly affect energy usage.
Other provisions are more intricate and less quotable, but essentially the Corporation is unfettered by obligations to protect forests, wetlands, and groundwater resources, or to avoid use of non-renewable carbon-based fuels.
16.15 relates to the resource recovery and recycling program. By its exclusion from the definition of an “authority”, the Corporation apparently doesn’t have to participate in the recycling program that is required of other state government agencies.
Lest you think the governor had neglected his war on public employees while forming his Corporation, let’s revisit those 336 positions at the Department of Commerce that he proposes to cut, or at best reorganize. Presumably some staff will be hired back by the Corporation. Under what terms, however? Apparently the governor didn’t completely approve of Act 7, as he used a line item veto on a few provisions. All of the vetoed items relate to the Corporation as an employer under Chapter 40 of the Wisconsin statutes, which defines the state’s Public Employee Trust Fund. It seems that former Department of Commerce employees who are re-hired or re-classified as employees of the Corporation will no longer enjoy state retirement benefits.
A picture emerges of the governor and a few friends, with the “flexibility” to dispose of a large budget to achieve very broadly defined, “pro-business” goals, without any pesky concerns about the environment or clean energy, or providing retirement benefits to their employees.
As long as a grant or loan made by the Corporation is less than $100,000, there is no requirement for the recipient of the funds to make a detailed, independently verified accounting of how they are spent. How many $99,999 grants will be made to Walker’s campaign contributors?
With that, I'm off to run some errands before heading down to the Capitol.