Wisconsin’s economic development agency that negotiated the state’s deal with Foxconn Technology Group continues to have a host of problems with how it tracks job creation and awards given to companies, an audit released Friday found.
The report from the nonpartisan Legislative Audit Bureau examined the Wisconsin Economic Development Corporation, a quasi-private agency created under former Gov. Scott Walker that is in charge of job creation and dispenses more than $3.1 billion a year in tax credits, grants, loans and bonds.
The agency, known as WEDC, has struggled since its creation in 2011 on a number of fronts, including recovering loans made to companies that don’t meet contractual requirements. It has been in the political crosshairs for years and remains a focus because of the Foxconn deal. Under that agreement, the Taiwan-based electronics manufacturer could receive more than $4 billion in state and local tax credits if it invests $10 billion and creates 13,000 jobs in Wisconsin over 15 years.
Gov. Tony Evers campaigned as a critic of Foxconn and on wanting to dissolve the economic development agency, but backed off that promise after he defeated Walker. In response, the Republican-controlled Legislature sought to protect WEDC from changes by passing a law in a lame-duck legislative session before Evers took office preventing him from replacing its CEO until September.
The audit covered July 2017 through December 2018, just before Evers took office and during the time when the Foxconn deal was reached. Evers had no immediate comment on the audit.
The audit said that only about 35% of required jobs had been created by recipients of 68 tax credit and loan awards through the fiscal year that ended in June 2018. The report said WEDC could have required loan recipients to repay $4 million and $414,000 in previously awarded tax credits.
That money could have been used to support other projects, the audit said.
The report also said WEDC awarded $462,000 in tax credits for creating jobs to one unnamed recipient that actually lost 17 jobs. Those tax credits will be reclaimed by the state, WEDC leader Mark Hogan said in an interview. He declined to name the company.
WEDC also doesn’t know exactly how many jobs were created or retained as a result of awards that had ended because it did not collect enough information from recipients, the audit said. Between 2011 and 2018, 436 awards totaling nearly $131 million ended.
The audit also faults WEDC for not consistently complying with state laws and its contracts because it awarded tax credits to recipients that created or retained jobs filled by people outside of Wisconsin or who were not state residents.
It cited one example in which an unnamed recipient received $61,100 in tax credits for creating 261 jobs filled by people who lived in 36 states, none of which were even contiguous to Wisconsin. Hogan declined to name the company.
Hogan said WEDC interprets the law to permit the awarding of credits for companies that create jobs out of state. He said that latitude and flexibility is critical to attract companies, especially with more people working from home or off site.
Hogan said in a letter in response to the audit that it is focused on continuous improvement, noting that audit recommendations have decreased from 24 in 2015 to 19 in 2017 and 10 in the latest report.
Hogan addressed all of the recommendations in detail and said WEDC would be working internally to come up with an action plan.
He said all recommended changes should be “substantially implemented” by the end of the year.
Republican state Sen. Rob Cowles, co-chair of the Legislature’s Audit Committee, said it was disappointing that “new emerging issues” continue to be uncovered by audits. He suggested that law changes might be necessary to address the problems. Hogan said WEDC was not advocating for any law changes.
“The inability of WEDC to comply with state statutes and guidelines has put taxpayer funds at risk,” Cowles said. “This isn’t just an issue of unaccountability but shows the desired outcomes of these programs have not been consistently achieved.”
Six-year-olds are confident they know what their moms like.
A surprising number of moms thoroughly enjoy trips to water parks. Watching superhero movies and attending parent-teacher conferences also are on moms’ bucket lists.
We should add a disclaimer: Our polling population was limited to six first-graders at Washington Elementary School’s library. The subject was, of course, Mother’s Day.
Here’s something unsurprising we learned: These first-graders love their moms with all their hearts and aren’t afraid to say so.
In honor of Mother’s Day, here our polling results—as well as inside information about the presents some moms will be getting Sunday.
Jayden Ruiz’s mom is sick right now, but when she’s not, she likes mint chocolate shakes at Frostie Freeze on Court Street.
Jayden, 6, tended to supply answers in the form of questions. Under the category of “Do you have any messages for Mom,” Jayden said, “I love my mom?” It wasn’t that he was unsure about it; he just wanted to be certain he was providing the right answers.
Why does he love his mom?
“Because she takes me places?” Jayden said. “Because she cares about me a lot?”
Yes, both of those are excellent answers. Jayden’s mom has even taken him to a Wisconsin Dells water park.
Wyatt Renken, 6, informed us that his mom works at night, sleeps in the morning and plays video games during the day. We suspect this is not an accurate accounting of her whole schedule, but we didn’t want to pry.
What’s his favorite thing to do with his mom?
“Just snuggle,” Wyatt said.
Did he have a message for his mom?
“I love her very much, and I don’t want to lose her,” Wyatt said.
Sam Knueppell, 6, said his mom likes it when he brings her breakfast in bed when she’s sick.
Here’s another cool thing: Sometimes his mom gets him presents just because she likes him. Once she got him a basketball hoop because she knows he likes basketball.
Does his mom play basketball?
“I can beat her, but she’s kinda good at it,” Sam said.
What makes his mom the most amazing mom in the world?
“When me and my brother get into trouble, she doesn’t, like, punish punish us, but she’s still nice to us,” Sam said.
He said his mother’s favorite things to do include “going on trips and going to (school) conferences to see how good we’re doing.”
Lucas Staltz, who is “7, almost 8,” said he and his dad have already picked out his mom’s present.
“I like to play football with her a lot, “ Lucas said. “Mostly we just play catch. Sometimes we play games together, and I usually win.”
His mom’s favorite thing to do is “watch ‘Avengers’ movies.” She also likes Florida because it is warm.
“She takes us to water parks in the summer,” Lucus said.
Does he have a Mother’s Day message for his mom?
“I love you very much, and I would give you five presents,” Lucas said.
Reed Pratt, 7, likes to bake with her mom.
“I was really tired one night, and we came home, and she said, ‘Do you wanna bake something?’ And I said, ‘Sure,’ and then she asked me what I wanted to bake, and I said, ‘A cake,’ and so we baked a cake and then frosted it,” Reed said.
Reed’s mom, who has blond hair and green eyes, is amazing because she “hugs me at night and tells me that she loves me.”
On Mother’s Day, Reed plans to give her mother a lot of hugs and thank her for all she does.
She’ll also tell her, “I love you very much.”
Seven-year-old Avalon Pierce’s favorite thing to do with her mom is to have a “mommy-daughter day.” They go out and do fun things such as shopping and eating in restaurants. Noodles & Company is their favorite spot to eat.
For Mother’s Day, Avalon and her dad will cook her mom breakfast in bed and make her “lots of projects.” She’s not sure what those projects will be yet.
Does she have a Mother’s Day message for her mom?
“I love you with all my heart.”
Eric A. Buckoltz
Joseph L. “Chief” Coulter
Kevin G. Cox
Antoinette “Dolly” James
Tiffany T. Minami
President Donald Trump’s administration told China it has a month to seal a trade deal or face tariffs on all its exports to the U.S., even as both sides sought to avoid a public breakdown in negotiations despite a developing stalemate.
The threat was made during talks Friday in Washington, hours after Trump upped the ante by imposing a second round of punitive duties on $200 billion in Chinese goods. The talks are under close scrutiny across global financial markets, and U.S. stocks turned positive after negotiators on both sides said the session had gone fairly well.
In a series of tweets that cheered markets, Trump declared Friday that the talks with China had been “candid and constructive.”
“The relationship between President Xi and myself remains a very strong one, and conversations into the future will continue,” he said. Further talks are possible, but there’s no immediate plan for the next round, according to a person familiar with the negotiations.
Earlier, in a meeting with Chinese Vice Premier Liu He, U.S. officials laid out their bottom line, telling him that Beijing had three or four weeks to agree to a deal or face additional 25% tariffs on a further $325 billion in exports to the U.S., according to people familiar with the talks. The threat came in response to the lack of any meaningful concessions by China during two days of meetings, the people said.
In a statement late Friday, U.S. Trade Representative Robert Lighthizer said the administration would release details of its plans for tariffs on roughly $300 billion in imports from China on Monday, setting the process in motion for Trump to deliver on his latest threat.
The lack of progress left major question marks hanging over the search for a deal on trade—just one source of tensions in a growing geopolitical rivalry that’s already shifting supply chains and testing established economic and security alliances.
In an interview Friday with Chinese state broadcaster CCTV, Liu said both sides agreed to keep talking despite what he called “some temporary resistance and distractions,” and to hold future meetings in Beijing. He dismissed the idea that talks had broken down. “It’s normal to have hiccups during the negotiations. It’s inevitable.”
He also struck a note of defiance. “For the interest of the people of China, the people of U.S. and the people of the whole world, we will deal with this rationally,” the vice premier said. “But China is not afraid, nor are the Chinese people,” adding that “China needs a cooperative agreement with equality and dignity.”
Chinese state media released a statement of the official view of fault lines in the talks. In a commentary published Saturday, Xinhua news agency said the two sides differ on whether all tariffs should be removed as part of an agreement. The second sticking point is on the amount of purchases China should make in order to even the trade balance. The third is on the “balance” of the text—Chinese commentators have long signaled that they see the agreement as being one sided and damaging to Chinese sovereignty.
In a series of morning tweets Trump, who is seeking re-election on the back of a booming U.S. economy, sought to justify his decision to hike tariffs and convince businesses and financial markets that he wasn’t walking away from a deal.
“There is absolutely no need to rush,” the U.S. president said. In another tweet, Trump proposed a vast new plan to use income from tariffs to buy up the crops of American farmers, who have watched their exports to China collapse, and send them to poor countries as aid.
The presidential good humor hid what people familiar with the discussions say has been an increasingly gloomy mood around the negotiations in recent days.
In a call with Trump supporters Friday, trade adviser and China hawk Peter Navarro said the two sides hadn’t reached a deal yet.
He also denied that the Trump administration’s actions amounted to a trade war, telling supporters that the U.S. was defending itself against a China that did not obey international norms, according to two people on the call.
Before the rebound late Friday, U.S. markets had posted their worst week of the year so far as the trade truce that had been in place for months was shattered by the new U.S. tariffs.
The S&P 500 recovered from earlier losses Friday, ending the day 0.4 percent higher.
This week’s tariff move is likely to have significant short-term consequences for retailers and other U.S. businesses reliant on imports from China. But extending it to all trade would increase the economic and political stakes even further for Trump and American businesses.
Such a step would see price increases on smartphones, laptops and other consumer goods—the kind that Trump’s advisers have been eager to avoid out of concern for the fallout. It would likely provoke further retaliation, and some economists are predicting it could even tip the U.S. economy into recession just as Trump faces re-election in 2020.
Those risks are one reason why some analysts believe the two sides will eventually strike a deal.
“It is in both sides’ interest to keep talking,” said Clete Willems, who until last month served as director of international economics on Trump’s National Economic Council. “I don’t think there is any reason that we can’t still have an agreement. There was a lot of progress made over the last four or five months, and we shouldn’t throw that away.”
But this week’s talks have also amplified the differences that remain between the two governments.