Delinquent WEDC loans on the rise

Last updated on July 2nd, 2019 at 09:08 am

The value of Wisconsin Economic Development Corp. loans that are considered delinquent more than tripled in the last quarter, according to figures compiled ahead of this week’s board meeting.

The WEDC has been criticized for the number of delinquent loans in recent years. The numbers prepared for Thursday’s board meeting show the value of those loans jumped from almost $1.3 million in the second quarter to $4.9 million, according to a report by WisPolitics.com, a media partner of BizTimes..

WEDC spokesman Mark Maley stressed that is not uncommon in the third quarter of a fiscal year because the first payments on loans are due at the start of that three-month period. For example, the value of delinquent loans jumped from $5.7 million in the second quarter in the last fiscal year to $10.2 million in the third quarter.

He also pointed out the $4.9 million now considered delinquent is significantly less than the $12.8 million that was behind on payments in the first quarter of fiscal year 2014.

Maley said, “WEDC is aggressively pursuing payment from the companies currently delinquent” and anticipates the amount now considered delinquent to decline dramatically over the next quarter.

The agency’s figures also show a spike in the number of performance reports that are now delinquent. Those who receive aid through the agency are required to file the reports annually to update, for example, how many jobs had been created.

There were 59 reports considered delinquent in the three-month period that covered October through December. That jumped to 191 reports in the first quarter of this year. Maley said many of the reports are due during the first part of the calendar year.

Laura Smith, a spokeswoman for Assembly Minority Leader Peter Barca (D-Kenosha), a member of the WEDC board, said the numbers raise concerns about how vigorously WEDC is tracking taxpayer dollars.

“Rep. Barca hopes to get answers at the upcoming WEDC Board meeting but the big-picture concern is: Who will be asking those questions once Gov. Walker and Republicans have removed lawmakers from the WEDC Board? The last thing our state jobs agency needs is less oversight and transparency,” she said.

The board meets on Thursday in Milwaukee. The agenda includes a discussion of the proposed merger between the agency and the Wisconsin Housing and Economic Development Authority. Officials from WHEDA will join the meeting for that portion of the agenda. The proposed merger would drop lawmakers from the board of the new entity.

The WEDC also was criticized earlier this week after the announcement that Eaton Corp. is closing its plant in Watertown, eliminating 93 jobs. The company plans to outsource the jobs to a plant in Tijuana, Mexico. Eaton previously laid off 163 employees in Waukesha County and moved those jobs to Mexico in 2014. The layoffs came after Eaton received nearly $370,000 in tax assistance from the WEDC.

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