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Racine Journal Times, July 16

No outsourcing after taking WEDC money

We've editorialized in this space regarding actions we wanted to see taken by the Wisconsin Economic Development Corp., the quasi-public agency created by Gov. Scott Walker to replace the Department of Commerce. We've called for the WEDC to do a better job of being, in the governor's own words, "good stewards of the taxpayers' dollars," and for greater transparency from the agency, including an endorsement of the idea to require the WEDC to report more information to the Legislature annually.

After a recently published report, we have another item for the WEDC's to-do list. Once again, it's an item that we thought would be generally understood: Don't take Wisconsin money, then send Wisconsin jobs overseas.

Greg Neumann of WKOW.com in Madison reported on July 9 that at least two companies that received financial awards from the WEDC later outsourced jobs to foreign countries, with one of those companies receiving a second WEDC award after the fact.

Eaton Corp. and Plexus Corp. received millions of dollars in financial awards from WEDC, only to later lay off workers whose jobs were taken by employees at the companies' foreign facilities, WKOW.com reported.

In 2011, WEDC awarded Eaton Corp. with up to $1 million in tax credits if the company met job creation and retention goals at its manufacturing facility in Menomonee Falls. WEDC officials say the company has received $190,000 in tax credits so far.

In April 2013, Eaton laid off 163 employees at its Cooper Power Systems plant in Pewaukee and announced it was moving those jobs to Mexico. Less than a year later, WEDC awarded Eaton Corp. with up to $1.36 million in additional tax credits for a proposed $54 million expansion at that same Pewaukee plant.

On July 9, WEDC spokesperson Mark Maley told WKOW.com that Eaton Corp. "recently notified WEDC it will not seek any tax credits for this project." How thoughtful of them.

Eaton Corp. is based in Dublin, Ireland, but has numerous offices and interests in the United Kingdom, United States, Indonesia, Singapore, France, Germany and Mexico.

In the Plexus case, WEDC awarded Plexu of Neenah with tax credits of up to $2 million in 2011 and up to $15 million in 2012. Maley says Plexus has received $4.7 million in tax credits to this point.

In July 2012, Plexus announced it was laying off 116 workers from its Neenah facility. The U.S. Department of Labor has since ruled those employees, as well as all Plexus employees laid off since December of 2011, are eligible to receive federal Trade Adjustment Assistance benefits. Those benefits are only available to employees who were laid off because their jobs were outsourced to foreign countries. Plexus did not identify where it relocated those jobs to in 2012, but also has offices and interests in the United Kingdom, China, Germany, Romania, Malaysia and Thailand, WKOW reported.

This is astonishing, but not nearly as astonishing as what Maley, the WEDC spokesperson, said to Neumann of WKOW.com: "If a company makes a business decision to move some of its jobs out of the state — despite our best efforts — we will continue to work with that company to ensure that as many jobs as possible remain in Wisconsin."

What's that saying about fool me once, shame on you? Just how far backwards is the WEDC willing to bend for Eaton or for Plexus?

For the record, we don't want to see any Wisconsin jobs going overseas. In August,Lynda Paasch of the state Department of Workforce Development, submitted a petition for special federal aidfor former Trek Bicycle workers through the TAA program. Paasch wrote that most Trek employees working second and third shift making composite lugs and mountain bike frames were laid off March 16, 2013. Fifteen to 20 jobs from the Waterloo facility were outsourced to China. These were the only layoffs the company had had to that point in 2013, the Milwaukee Journal Sentinel's Daniel Bice reported last October.

Trek Bicycles, of course, is the company founded by the father of Mary Burke, who is seeking the Democratic nomination for governor. While Burke has not worked for the company since 2004, she remains a significant shareholder. We presume that, given her campaign's criticism of the WEDC and the Walker administration in the wake of the WKOW.com report, the jobs that moved from Waterloo to China in 2013 were moved over her strenuous objection. We don't like that outsourcing, either, but we find it only slightly less troubling because it didn't involve tax credits obtained through the WEDC.

If you're a company taking Wisconsin's money in the form of a tax credit in the name of bringing more jobs to Wisconsin, we would have thought it would be understood or made clear to you that we expect that jobs would not be leaving not only the Badger State, but the United States. We think it's time that expectation was put into writing, with an agreement between the WEDC and participating companies that if jobs leave the state, Wisconsin gets its money back in the form of a revocation of the tax credit and a demand of payment for the unpaid taxes.

It seems that being "good stewards of the taxpayers' dollars" must now also include significant strings attached to those dollars.


Wisconsin State Journal, July 16

Tell UW students how much they'll pay

It won't fix the soaring cost of college. But it will help.

Indiana University students just reduced their borrowing by 11 percent — far more than the national average — after the state's system of seven public campuses made one simple change.

Indiana started sending letters to students detailing what their loan totals and eventual monthly payments would be after graduation. That led to a $31 million reduction in federal undergraduate Stafford loan disbursements at Indiana universities.

Natalie Cahill, 22, in her final year in nursing at Indiana's Bloomington campus, said she decided to seek more scholarship money and borrow less after seeing how much she was in line to pay after graduation. She also will use money from a summer hospital job to help cover costs.

"When you take out loans for the year, you just see a smaller number than the grand total," Cahill told Bloomberg News. "Seeing the letter definitely put things into perspective."

Wisconsin should give it a shot. More information about what students can expect to owe and pay after leaving school should encourage better financial decisions.

Besides sending letters with detailed loan and payment information, Indiana now requires returning students to confirm they want more loans on the school's website. Reacting to rising default rates, Indiana also started a personal finance course, peer-to-peer advising and improved information on its website.

"I'm not surprised it drives down the borrowing once you know the consequences," said Jim Kennedy, associate vice president and director of financial aid for Indiana schools. "If they know at all times their debt, and the repayment, it helps with a lot of planning."

UW-Madison encourages students in person and online to check their loan details. But the Madison campus and other University of Wisconsin System schools don't send letters detailing future payment amounts.

Not yet, anyway.

"We're aware of it. We're exploring it. We are interested in doing something similar," said Jim Villa, vice president for university relations. "It's a very good idea."

Students seem to understand the many benefits of college. They also need a clear picture of the cost.


Post-Crescent of Appleton, July 16

Transportation aid needs to change to go to intended school districts

The idea was to help rural school districts with large enrollment areas and, as a result, high transportation costs.

The reality has turned into something else altogether.

The solution is to change the formula to aid the intended targets.

As part of the 2013-15 state budget, $5 million was devoted to the High Cost Transportation Aid program and was distributed to school districts based on their per-pupil transportation costs. If a district's cost was more than 150 percent of the average district, it was eligible for funding.

But, as the Milwaukee Journal Sentinel reported, the plan didn't turn out as intended. While rural — and particularly northern rural — districts got much of the money, that wasn't always the case.

Durand, in the Eau Claire area, got the most — $179,000 — in the 2013-14 school year and the Lakeland district in Minocqua got the second-most — $143,000. They were among eight districts that got more than $100,000. But among the districts right behind them were Glendale-River Hills at $97,000, Nicolet Union High School at $80,000, Fox Point-Bayside at $71,000 and Maple Dale-Indian Hill at $68,000.

In fact, if you total those four districts — Glendale-River Hills, Fox Point-Bayside and Maple Dale-Indian Hill are unusual in that they're K-8 districts that feed into the Nicolet high school district — it's the highest in the state, at $316,000.

The reason? Those districts have high transportation costs because they don't have many sidewalks in their residential areas so they're required to provide busing. Yet, those districts also have among the highest income levels and home values in the state.

Meanwhile, some rural and northern districts with much lower wealth but spend a big chunk of their budgets on transportation got little or nothing.

That's obviously wrong. The state Department of Public Instruction, which administers the aid, should come up with a new formula — factoring in income level, percentage of total budget spent on transportation or another variable — to focus the money on the intended purpose.

The extra funding is a good idea. Now, the execution of distributing it needs to be improved.

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