Thursday, June 14, 2012

Corporate Welfare Programs Sketchy On Jobs But Good For Wealthy Special Interests

A recent state audit couldn't figure out how many jobs were created or retained from the hundreds of millions in taxpayer dollars the state gave away through nearly 200 economic development programs since 2007.

But while the job and overall economic development boost - if any - is a mystery, the campaign contributions these corporate welfare programs help the governor and legislators draw from business, manufacturers and more than a dozen other wealthy special interests is known.

A related pay-to-play report released last month by the Democracy Campaign shows the state will spend about $335 million on new tax credits, cuts or other breaks billed to create or retain jobs in fiscal year 2012-13. That works out to $235 a year for a family of four, and the costs will balloon to $439 million or $291 for a family of four by 2020-21.

The report, "Special Interest Smorgasbord," details nearly five dozen proposals that benefit special interests - usually at a cost to consumer protections or pocketbooks - that were passed in the most recent 2011-12 legislative session. And those tax breaks and giveaways are in addition to present economic development programs highlighted in the state audit that cost state taxpayers $226 million in 2009-11.

The special interests that benefit from all this welfare contributed $13.7 million to Republican Governor Scott Walker from 2009 when he started his run for governor through 2011, and $9.9 million to legislators.

In addition to giving the money away, a new state law makes it difficult to gauge their performance, essentially shielding them from accountability.  State agencies that administer the programs are no longer required to report the number of jobs these programs create or retain in an industry or municipality or the amount of tax benefits that are given out and the identity of the recipients that get them.

But measuring the success or failure of these programs isn't a recent problem. Past audits have identified the same problems. A three-part series done in 1999 by Milwaukee Journal Sentinel reporter Steve Schultze highlighted the difficulty in Wisconsin and elsewhere of measuring their performance and cost effectiveness.

Another Democracy Campaign report, "Serving the Have-Mores," done in 2005 reviewed about 3,900 state grants and low-interest loans totaling $771 million from 1999 through 2004 to foster job creation and economic development. It found big donors got the biggest breaks, multi-billion-dollar corporations got state aid they didn't need and the required tracking and performance evaluations of many of the programs was spotty.

Sound familiar?

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