Progressive Thinking

WEDC has the new responsibility of overseeing the $3 billion contract for the Foxconn deal despite a very troublesome history watching over Wisconsin’s economic development efforts while tracking job creation, administering loans and verifying their work.

MADISON - “Can you find out the nuclear flaw in the Foxconn deal?” a woman asked me. She was referring to words leaked out of secret negotiations between the state and a Taiwanese billionaire.

Lawmakers, who recently voted in favor of the Foxconn deal, did so without seeing any contract. They put faith in a state operation known as Wisconsin Economic Development (WEDC).

Despite being paid for entirely with public funds, the $3 billion contract with Foxconn is not public. Nor do lawmakers who approved the plan know what problems exist in the draft contract. As the saying goes, the devil is in the details. Lawmakers and the public cannot see the details and are asked to trust WEDC negotiating the deal and later overseeing the Foxconn’s compliance.

But is WEDC worthy of our trust?

For years, the nonpartisan Legislative Audit Bureau (LAB) reported concerns about WEDC’s administration and oversight of economic development programs.

In 2013, nearly two years after WEDC was created, auditors could not report on state dollars spent by WEDC because their financial and accounting systems were not adequate. Members of the Joint Legislative Audit Committee learned spending was tracked largely by credit card statements. To remedy this serious problem, legislators passed a new law that included an independent audit of all WEDC financial statements. Financial statement preparation should be basic for any state agency.

At an October 2013 Audit Committee public hearing, WEDC leaders promised they had complied with all the LAB recommendations. However, a year later, auditors reported many problems related to basic operations and the tracking of money. For example, auditors found some spending not recorded in the accounting system and found past due loans that were missing.

By 2015, auditors discovered a larger than necessary cash balance at WEDC. By the end of June 2015, WEDC had accumulated in excess of $85 million as reported in a 2017 audit.

Losing loans and not properly accounting for internal expenses are problems associated with the operation of a troubled agency. But the problems WEDC could encounter in overseeing a large project like Foxconn are related to the independent evaluation of the company’s promises compared to their actual records.

Four years after WEDC was established auditors finally could report that WEDC made ANY effort to obtain information about jobs were actually created. However, further review by auditors showed the attempts made by WEDC only compared a company’s own promises to report and the reports a company itself filed. WEDC made no effort to verify the information submitted.

In its most recent audit, the LAB reported WEDC paid an outside consultant $24,900 to do the work they were required to do since their existence in 2011. Auditors found concerns including that the contractor’s work was limited and did not include grants.

In the LAB’s own evaluation of completed economic development projects, auditors’ findings included: companies gave money for job creation without any contract requiring such, companies quitting before the end of their contract period without delivering promised jobs, contracts to create jobs were written with no specific number of jobs to be created, WEDC forgave loans even though the company created or retained a lower number of jobs than required, and WEDC counting twice the number of jobs created by a company.

If Wisconsin taxpayers cannot be confident after seven years and the investment of hundreds of millions of state dollars that promised jobs were created, how can we possibly be confident WEDC can negotiate and oversee a $3 billion contract?

No local government would ever agree to spend money without seeing a contract. No banker would agree to loan funds without a contract. No businessperson would ever commit funds without a contract.

Lawmakers bought a pig in a poke – an unknown deal.

WEDC has not earned lawmakers trust, nor that of the public. Lawmakers can and should do more to oversee this project.

Senate Bill 119 would legalize growing hemp and create an active industrial program and license growers, actions eagerly supported by Wisconsin farmers. The Bill has strong bi-partisan support and Sen. Vinehout hopes it will pass quickly.

MADISON - Farmers in diverse states like Hawaii, Kentucky, Maine and Minnesota are researching a new crop: industrial hemp. Many states are changing laws to allow growing of hemp.

Wisconsin is slow to get in the game. Hopefully, this is about to change.

Lawmakers on the Senate Agriculture, Small Business and Tourism Committee are considering a hemp legalization bill. If Senate Bill 119 becomes law, the Department of Agriculture and Consumer Protection (DATCP) would create an active industrial hemp program and license growers.

Hemp is not a new crop to Wisconsin. We once had flourishing fields of hemp. But, as the saying goes, you are sometimes known by your relatives. Even for a plant. Hemp suffered from an association with its cousin, marijuana. By the 1950s, farmers stopped growing hemp. Federal and state drug laws swept up hemp in an effort to eradicate marijuana.

According to a Congressional Research Service (CRS) publication, industrial hemp and marijuana are separate varieties or cultivars of the same species of plant cannabis sativa.

Generally, hemp is defined by having less than 0.3% of THC, an active ingredient in marijuana. However, the plant differs in other genetic aspects, in cultivation practices, and in its use.

Thirty counties around the world grow hemp as an agricultural commodity. Hemp can be used to create plastics, mixed with lime to create concrete, as a fiberglass alternative for use by aviation or automobiles or as a potential biodiesel fuel. The CRS reports more than 25,000 hemp products fall into nine markets: agriculture, textiles, recycling, automotive, furniture, food and beverages, paper, construction materials and personal care.

According to the CRS, growth in the sale of hemp products averaged over 15% annually between 2010 and 2015. The biggest demand for hemp related products are hemp-based body products, food or supplements. These products account for more than 60% of the value of U.S. sales.

Until recently, U.S. farmers were forbidden to grow hemp. This policy forced industries to import hemp raw materials or use finished hemp products for further processing. China now leads the world as a grower and supplier of hemp. United States processors also rely heavily on Canadian growers.

A provision in the 2014 federal Farm Bill allowed universities and state agriculture departments to begin supervising hemp in pilot programs. This caused a flurry of activity within state legislatures to create new hemp laws.

According to the National Conference of State Legislatures (NCSL) as of July 2017, 33 states passed some legislation related to industrial hemp including all our Midwestern neighboring states except Iowa. Twenty-six states created laws that began research on hemp, or a grower pilot-program.

Many states passed laws encouraging the development of hemp for certain purposes. For example, Colorado is researching the use of hemp for animal feed. Kentucky funded research on the use of hemp for biofuels. North Carolina is studying hemp for soil conservation and reforestation. The CRS cites research showing hemp may be less environmentally degrading than some other crops. Hemp can play a role in crop rotation, breaking the cycle of disease and pests.

Wisconsin farmers are eager once again to get in on hemp production. The Wisconsin Farm Bureau and the Wisconsin Farmers Union are advocating for the passage of SB 119. Farmers from both organizations and local agriculture agents contacted me asking for quick passage of the SB 119.

Like many agricultural issues, hemp legislation this year has strong bipartisan support. Forty cosponsors of both parties signed up to help pass SB 119. This is a significant improvement from when I introduced the first Senate bill in 2016. Several earlier bills died in the Assembly.

This year, Senators Testin and Harsdorf took the bill I authored and added some important provisions. They gave the UW a role in supervising a seed certification program. The new bill allows any university or tribe to establish agricultural hemp plots. Additionally, it encourages our State Tribal Relations Committee to investigate hemp as an economic development tool for our tribes.

Hemp in Wisconsin is a crop whose time has come. Passage of SB 119 will begin the work of bringing back Wisconsin’s hemp industry. Let’s make 2017 the year of hemp.

Two bills moving through the Senate would create a non-elected council to review professional licenses and propose legislation that would de-license professions in Wisconsin. Many professionals around the state have voiced opposition.

MADISON - Imagine you are with your loved one who is in the hospital. Night comes. You prepare to leave, gently kissing your loved one “good night”.

As you walk down the corridor and into the hospital parking lot, you might wonder how your loved one will feel in the morning. Will things be better, worse or stay the same?

One thing you don’t worry about is the quality of care provided to your loved one because the nurses working the night shift are licensed by the state.

Nurses and other professionals follow “standards of care” that are spelled out in their education and clinical training. They follow licensing and board requirements set in state law. Patients are protected from incompetent nurses by a board that oversees the practice of nursing. This is true for dozens of other professionals in Wisconsin.

Recently, a Senate committee on which I serve passed two bills that set up a process to potentially de-license professionals. Senate Bill 288 establishes a partisan appointed council that reviews licensing, registration or other state approval for ALL occupation and professional licensing in Wisconsin. Senate Bill 296 creates a process for self-certification that allows a person to claim “state certification” even though they may have no training or experience in their chosen occupation.

Electricians, nurses, certified public accountants, plumbers, physical therapists, doctors, and other professionals will have their licensing and continuing education requirements reviewed by a non-elected, partisan council. The Council would have the power to write and introduce a bill making changes to the laws governing occupational licensing. These powers are generally reserved for lawmakers.

The process set up by these bills is eerily similar to a process laid out in an August 2017 publication of the ideologically conservative Mercatus Center:

Policymakers…would be wise to follow these steps:

1. Pass legislation that sets an ambitious goal for the elimination of licenses and the reduction of licensing burdens.
2. Establish an independent commission charged with examining the state’s licensing laws. …the commission should be charged with evaluating all licenses.
3. The commission should be charged with setting a comprehensive path for licensure elimination and reform. The authorizing legislation should commit elected officials to accepting the commission’s recommendations in their entirety or not at all.

…the institutional structure that we recommend borrows elements from other reforms that have succeeded in eliminating favoritism. In particular, it allows elected officials to cast conspicuous votes in the public interest while giving them some degree of “cover” from the special interests that will inevitably be harmed by the elimination of their regulatory privilege.

Let’s break down that last sentence.

The elected officials cast “votes in the public interest” – your elected representative is voting to de-license your plumber. “Giving them some degree of ‘cover’” – your elected official is now able to say, “I didn’t really want to de-license your plumber, but it was part of a larger bill and I couldn’t change the bill.”

“Special interests that will inevitably be harmed”—those “special interests” would be the plumbers’ union or the nurses’ association.

The public likely did not hear about the de-licensure plan because the daylong hearing by both the Senate and Assembly committees happened at exactly the same time as the public hearing on Foxconn. The Foxconn hearing dominated headlines, not the concerns of over 100 Wisconsinites who traveled to Madison to testify or register against the de-licensure bills. Those speaking in favor of the bills were, almost exclusively, conservative ideological groups.

When I asked what problem the bills were trying to solve, proponents said they wanted to eliminate “fence me out” legislation that left people unable to get into a desired profession. When I asked them to provide me a list of professions with licenses that create a “fence me out” problem, they did not give me a single example.

Over the years, the Legislature created licensure requirements in conjunction with professionals. If we have unnecessary licensing, committees of the Legislature should review details of a professional license and determine if change is necessary.

Setting up a process to de-license professionals by unelected appointees is an attempt by conservative ideological groups to remake Wisconsin in their own image. In fact, a republican colleague commented that these ideological groups have become a shadow legislature.

These bills need to be stopped.

The contrast between the frenzy in the Capitol on the state budget and Foxconn and the slow pace of life along the Great River Road in western Wisconsin is great, but the decisions made in Madison will significantly influence people’s lives in western Wisconsin.

MADISON, WI - “Oh, my gosh,” I said to the Senate page. “I need that book.” The ‘book’ was a 744-page binder written by the nonpartisan Legislative Fiscal Bureau (LFB) detailing, in plain language, the decisions in the massive state budget.

Knowing what was in the binder was critical to making an informed vote on the state budget. However, there was no time. The binder showed up in my office just as the Senate was about to go into session to debate a $3 billion dollar deal for Foxconn.

Less than twenty-four hours earlier, the budget writing committee made its final decisions on the state’s two-year, seventy-six billion dollar spending plan. In the next twenty-four hours, the full Assembly would vote on the budget bill. By the end of the same week, Friday night, a majority in the Senate would pass the budget. In less than another week, both Foxconn and the budget would be law.

Lawmakers, on both sides of the aisle, scrambled to know what was in the budget bill.

After three months of delays and false starts, the rush was on. For the first time, we had the actual bill – a 1,087-page document listing specific changes to 9,052 sections of Wisconsin law. Each of the sections modified parts of the law, although some single law changes had many sections devoted to accomplishing the change. In addition to a 744-page summary, the LFB wrote over 200 papers detailing individual changes.

The rush to move both Foxconn and the budget left little opportunity for the public to know what was happening and to react. Additionally, the public had no opportunity to react to nearly seventy pieces of policy unrelated to the budget but added into the budget at the last minute.

All this activity, and the magnitude of the decisions committing state funds forward for decades, stood in sharp contrast to the western Wisconsin world I returned to following the last Senate votes.

On the Great River Road that runs along the Mississippi and down the western edge of Buffalo County the state budget was not on people’s minds.

Conversation was about the hot weather and this being the first week of autumn. The leaves are beginning to drop. There is not much color yet except in the bottomland of the Buffalo River where the marsh plants are turning a rosy, reddish purple.

The grapes up on the bluff at Danzinger’s Vineyard were harvested. The view as the sunsets over the Mississippi Valley is magnificent. The organic sunflowers at Hetrick’s farm turned black, the heads hang down, waiting for the combine.

The corn and soybeans are drying down and a year’s worth of work will soon be in storage bins or taken to the grain elevator.

Motorcycles are angled neatly in front of the Nelson Cheese Factory. Riders sat on benches in the shade licking ice cream cones and considering the next stop on their weekend ride down and back along the River.

The Fresh Art fall tour is on tap for next week. The self-guided tour wanders through the back roads of Buffalo, Pepin and Pierce counties with stops at 17 galleries. Local artists display local art of all kinds, including, painting, pottery, photography, ceramics, weaving, sculpture, jewelry, metalwork, furniture and more – a glorious display of a year of work coming to fruition.

The two worlds – the state Capitol and the Great River Road – seem so disconnected. It is hard to move so quickly from one back to the other. Nevertheless, the ties are strong.

Even as crops are harvested and we enjoy the turning of the seasons, county boards, city councils and school boards are beginning to work on next year’s budgets. Trying to figure out how to catch up on fixing the damage to roads caused by flooding, how to deal with increasing mental illness and drug addiction and provide alternatives to incarceration, how to maintain the classes and opportunities for students in our schools.

All of those decisions by local officials are shaped and limited by what the legislature did at the Capitol. The quality of life along the Great River Road will depend on those local decisions. We are all connected.

Sen. Kathleen Vinehout examines the lack of foresight in the budget just passed by the legislature and how it relates to three major issues – education, transportation and shared revenue.

MADISON - “Policy is who pays, who doesn’t pay and where the money gets spent,” said the President of the NAACP in a recent speech.

Policy making was center stage at the State Capitol when the long delayed $76 billion two-year state budget was rushed to passage just days after a majority of lawmakers voted to give a Taiwan billionaire $3 billion in state subsidies.

Budgets are about choices. Budget writers this year chose to leave major problems for the next budget writers.

Education is the most important job state government does. For years, lawmakers on both sides of the aisle agreed the state’s school funding formula was broken.

This budget, there were enough funds to change the formula. Efforts to do so were voted down. Instead, more state dollars were spent on vouchers for unaccountable private schools.

Under this budget, private schools will receive $8,396 a year in state taxpayer money for a high school student. Public schools would receive $6,671 for the same student. These estimates are detailed in a memo from the nonpartisan Legislative Fiscal Bureau.

The total cost of an average public-school student is a little over $11,000. Most of the difference comes from local property taxes. Remember, these numbers are averages. Many of our local districts receive much less than the state average of $6,671.

Particularly hurt by the formula are small rural schools. There is a fundamental disconnect between what drives school revenue – the number of students - and what drives expenses – the cost structure. For example, if three students leave a class of 20, the district revenue is cut by 15%. But the cost of teaching a class of 17 is almost the same as teaching a class of 20.

Other problems exist. The formula assumes all children cost the same to educate. But children who are in poverty or are English Language Learners, for example, cost more to educate. Costs also vary with the size of districts.

The solution by majority lawmakers was to add money outside the broken formula instead of fixing the formula. This increases the inequity between school districts and makes fixing the problem later more difficult.

Fixing transportation was also left for the writers of the next budget. Instead of adding sustainable funding sources, budget writers cut 253 positions from the Department of Transportation (DOT). A few years ago, the former DOT Secretary added positions arguing engineering costs decrease when work is done by in-house engineers rather than by consulting firms. A recent audit by the nonpartisan Legislative Audit Bureau confirmed that conclusion.

The transportation budget was “balanced” in part by lowering inflation estimates. Which made me wonder since DOT in the past has underestimated inflation when anticipating costs.

Potholes and locals turning asphalt roads back to gravel are the result of past state budget decisions that are not fixed in this budget. In the past six years, local road aid has been underfunded. After steady increases to keep up with inflation – even during the recession – the 2011 budget cut over 9% out of county road aid. All but one of the following years saw no increase at all. This budget includes an increase, but nothing near what is needed to make up for past cuts and inflation.

An even worse pattern exists in the general funding of local government. It’s budget time for local communities. But counties and cities do not have the money to keep up with expenses. Recently, a county board chair shared that department budget requests far exceeded a miniscule increase in expected revenue.

Over the past sixteen years, there has been a 20% decrease in state dollars given to locals in what we call “shared revenue.” In the same time period Wisconsin has seen a 56% increase in the state budget. I’d say the state has not done a good job of sharing. No wonder county and city services are being cut back.

The budget has passed, but the problems in local communities have not been addressed. Roads aren’t getting repaired, people aren’t getting mental health placements, referenda are being passed to keep the lights on at local schools. A lot of heavy lifting has been passed on to whoever will be writing the next budget.