September 21, 2014

Latest audit of Wisconsin jobs agency shows concerns over records

File photo

File photo

A new state audit shows Wisconsin’s job creation agency did not keep records to justify its spending on travel, salaries, and grants during its first two years.

The report from the Legislative Audit Bureau contains a fiscal review of the Wisconsin Economic Development Corporation, the public-private agency Governor Scott Walker created in 2011. Auditors said previously identified processing errors within the agency have been fixed, and there’s a new tracking system in which expense numbers upload directly into the agency’s accounting network. That reduces the chances for errors.

The audit showed that spending on 223 administrative items were not properly documented to indicate whether the items were reasonable, or even approved. The auditors also looked at 44 grant payments to businesses, economic groups, and local governments. They turned up processing errors, and a lack of supporting documents. The review covered 2011-2013 and noted that $1.7 million in job creation loans to businesses had not been paid back by the end of last year.

Agency CEO Reed Hall said his department now has a policy on documenting spending, and it plans to review its loan portfolio.

Concerns raised about campaigning lobbyists

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File Photo

The head of a government watchdog group is weighing in on a move by Assembly Republican leaders to recruit lobbyists to campaign for candidates.

Recent reports revealed several lobbyists have been included in emails sent out by Legislative leaders, which ask them to go knock on door in certain areas to help promote Republican candidates, talking to voters and dropping off campaign literature.

Jay Heck of Common Cause says some voters might consider it unseemly, if not wrong, that paid lobbyists are helping candidates. He says lobbyists already have tremendous influence at the Capitol, and getting them involved in the campaigning process seems very “counterproductive and ill-advised.”


State tax cut causing problems for municipalities

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File Photo

A change in how the state handles property taxes for technical colleges is hurting the income from TIF districts across central Wisconsin.

State legislators and Governor Walker’s office pushed through a massive property tax cut at the start of 2014, based on a projected billion dollar tax surplus coming in 2014. Inside that bill was a modification on how technical colleges collected their funding. The measure cut some of those funds from local taxes and to be paid out of state grants instead. That means that local tax rates are lower for residents, but it also means that tax valuation is down for many municipalities, which changes the calculations on tax incremental financing districts. Those are tools local governments can use to collect taxes on improvements in the tax rates in order to fund capital improvements and business investments in the area.

Officials in the village of Weston says this has hit them especially hard, at a time when the village is already projecting several years of operating deficits. Weston finance director John Jacobs says the funding formula reduces resident taxes at the cost of the municipalities. “Since the bill will go down, that means the portion that municipalities collect for TIF districts will also go down. And it happens that for us for December 2014, we will have a reduction about $175,000 that we will lose.”

He’s hoping they can convince lawmakers to give some of that money back to the communities. “There’s nothing in this act that says that there will be a payment made to municipalities, so we’re not kept whole in this whole situation.”

Wausau will be seeing a similar hit, although finance director Mary Ann Groat says they will be able to weather the change more easily. “Based on the increments we received for the 2014 budget, it looks like a $164,000 reduction for next year.”

Stevens Point Treasurer-Comptroller Corey Ladick says his staff is not seeing much in the way of damage. “It’s about $10,000 for us over all,” due to the fact that the city’s TIF districts are not seeing much growth right now.

Some legislators, including Representative Bob Kulp of Stratford, are optimistic the shortfall will not affect the municipalities as much. He says preliminary figures from the Legislative Fiscal Bureau project property values to go up around 2 to 3 percent, meaning more tax dollars will be coming in.

Representative Mandy Wright says this is an unintended consequence of the tax cuts. “It is something I voted against, because I did not think that we were making these cuts in a responsible manner.” She says it shows that the state needs to do more to protect local funding to municipalities. “If we’re truly talking about cutting past the bone, which is the case here as well as in public transit and public education, that’s extremely problematic and the state is not meeting its fiscal obligations to local municipalities.”

Senator Jerry Petrowski says he will be talking to the Legislative Audit Bureau for more information. “I know that it is a real benefit for the property tax payers to have property taxes go down, but it makes it a little tighter on the municipalities. I think we have to look at a number of things to see how this will be affecting how many people and how many TIFs across the state.”


Lawmaker concerned about elections agency secrecy

Sen. Mary Lazich (R-New Berlin)

Sen. Mary Lazich (R-New Berlin)

Wisconsin’s attorney general says the state Government Accountability Board does not have to release information about investigations conducted by the agency, and that has one lawmaker worried there may be a lack of accountability.

An opinion from Attorney General J.B. Van Hollen states that the GAB is prohibited under state law from releasing confidential information about its investigations to state auditors. State Senator Mary Lazich (R-New Berlin), who requested an audit of the agency that’s currently underway, says that raises some major concerns about the ability of the Legislative Audit Bureau to do its work and could be “problematic” in the future.

Lazich says it’s essential that lawmakers have access to all information about a state agency’s practices and finances, so they know how their decisions will impact its operations. She notes that the Legislative Audit Bureau has handled sensitive information from several other agencies in the past, and “we’ve never, to the best of my knowledge, ever had a problem with the Audit Bureau dealing inappropriately with sensitive information.”

The New Berlin Republican says it’s an issue lawmakers may want to revisit when they return to the Capitol next year.

Nass to run for state Senate

Rep. Steve Nass (R-Whitewater)

Rep. Steve Nass (R-Whitewater)

A long time Assembly Republican has announced plans to run for the state Senate.

State Representative Steve Nass (R-Whitewater) says he will not seek re-election to the 33rd Assembly District this fall. Instead, the Whitewater Republican plans to run for an open seat representing the state’s 11th Senate District. The announcement comes just a day after Republican state Senator Neal Kedzie (R-Elkhorn) announced he plans to retire at the end of the year, instead of seeking another term in office.

Nass has served in the Legislature since 1990. He says his campaign will focus on tax relief, creating private sector jobs, and reforming the state’s K-12 and higher education system.

Kedzie has already come out in support of Nass’ campaign, along with state Rep. Tyler August, who also lives in the Senate district. No Democrats or other Republicans have registered yet to run in the 11th Senate District.