May 18, 2017
These companies were among about four dozen businesses identified in a Legislative Audit Bureau report on Wednesday as top recipients of state tax credits, grants and loans in the last six months of 2016 from three corporate welfare programs administered by the Wisconsin Economic Development Corp. (WEDC). Here are the audit’s key findings and the full report.
WEDC, which is the state’s economic development and job creation agency created by Walker in 2011 shortly after he became governor, continues to fail to accurately track the number of jobs that are created or retained by the businesses that get WEDC state assistance, the audit said. The agency handed out $10 million in bad loans over the last two years and failed to turn over millions in tax credit repayments to the state until after auditors inquired, the audit said. And job creation numbers reported by the agency were also inaccurate because it double counted some jobs and included others from companies that have gone out of business.
The half-dozen companies named in the report, the state breaks they received, and their contributions to Walker and other Republican legislative and statewide candidates between January 2010 and December 2016 were:
- S.C. Johnson & Son in Racine, which received a $500,000 break from the state’s Historic Preservation Tax Credit Program. S.C. Johnson employee contributions totaled about $30,900 to Walker and $27,650 to other GOP legislative and statewide candidates between January 2010 and December 2016;
- Refrigeration equipment-maker Sub-Zero Group, of Madison, $2.8 million in tax credits. Company employees contributed about $11,300 to Walker and $5,135 to other Republicans;
- Milwaukee Electric Tool Corp., $18 million in tax credits. Company employees contributed $5,200 to Walker and another $5,775 to other Republicans;
- Specialty paper-maker Expera Specialty Solutions LLC, of Kaukauna, a $1 million state grant. Company employees contributed $2,000 to Walker and about $6,100 to other Republicans;
- Impact Seven, of Rice Lake, a community development corporation, $421,200 in state tax credits. Company employees contributed about $955 to Walker and $500 to other Republicans;
- Russ Davis Wholesale, of Wadena, Minn., a produce wholesaler, a $2 million state loan. Company employees contributed $800 to Walker and $1,550 to other Republicans.
The audit released Wednesday was the latest in a string of state audits and media reports – here, here, here, and here – that have found WEDC failed to properly award, document, and track millions of dollars in corporate welfare it has doled out since its creation.
Earlier this month, the GOP-controlled legislature’s Joint Finance Committee, which is reviewing Walker’s proposed 2017-19 state budget, voted to reinstate WEDC’s loan program. Two years ago, Republican lawmakers voted to phase out the loan program as of June 30, 2017, after a 2015 state audit showed WEDC failed to properly track loans or determine whether the recipients created or retained the jobs they promised.
Last year, the agency received about $9.2 million in loan repayments, forgave $6.7 million, and wrote off $2.45 million worth of loans that could not be recouped.