Health & Human Services

Low Grade: Wis. Audits Its Job Growth Programs

Wisconsin lawmakers plan to restructure the state's economic development efforts, after a sweeping state audit found substantial mismanagement among those programs.
by | October 2006
 

Wisconsin lawmakers plan to restructure the state's economic development efforts, after a sweeping state audit found substantial mismanagement among those programs.

The first-ever report, released in August by the Legislative Audit Bureau, determined that many of Wisconsin's 152 economic development programs are duplicative or uncoordinated. The state also fails to track whether specific economic initiatives meet their goals.

Wisconsin spent $152.8 million on economic development programs during the two-year span covered by the audit. However, as State Auditor Jan Mueller told lawmakers, the state simply does not know which development programs are effective and which are not.

Some of the facts detailed in the audit underscore the state's inconsistent approach to economic development. Twenty-six different agencies or panels have oversight of these programs, but lack of coordination among them has led to a double-counting of some of the benefits reaped from economic grants, including an artificially high estimate of new jobs created in the state. There are 46 different programs that target small business and an additional 40 that focus on early-stage businesses and entrepreneurs.

The audit also indicates that several grants and tax incentives were ineffective in helping businesses create jobs. At least two companies that received grants laid off employees within three years. And in one especially egregious case, tax credits provided to insurance companies ended up costing taxpayers more than $90,000 for each job created.

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