Walker defends proposal to merge state's chief job-creation agency with one that hands out housing loans

MILWAUKEE (AP) — Governor Scott Walker is defending his proposal to merge the state's chief job-creation agency with one that hands out low-interest housing loans.

Walker spoke in support of his idea during a joint meeting Thursday, April 30th of the two boards that run each of the affected agencies.

But Democratic Sen. Nikiya Harris Dodd told Walker that the proposed merger is "completely useless."

Harris Dodd says the Wisconsin Housing and Economic Development Authority is working well now. She is a member of the board.

Walker says he's looking to improve operations in general, not address any particular problem. He says a new combined agency would serve people better and be less confusing.

Assembly Democratic Minority Leader Peter Barca tells Walker the idea should be "put on ice" and studied more.

"It's an ill-conceived idea," Barca said of Walker's proposal to merge the Wisconsin Economic Development Corporation and the Wisconsin Housing and Economic Development Authority. Barca said instead of moving quickly, there should be more research done on the implication of the proposed merger in order to "get it right."

Barca is a member of WEDC, a quasi-private board that Walker created in 2011 to lead job-creation efforts in Wisconsin.

Walker initially proposed the merger in his state budget, which is slated to pass the Republican-controlled Legislature in June. But this week, at Walker's request, a separate bill was introduced. That will draw more attention to the idea and likely slow its passage.

There are several differences between what Walker proposed and the direction taken in the bill. In one change, lawmakers from both parties would still have seats on the newly created board instead of being removed as Walker initially proposed.

Barca said he viewed that as a positive step and he hopes that introduction of the bill will lead to more scrutiny of the proposal. Walker wants the merger to take effect by January 1st.

Democrats have been critical of the proposal for not allowing financial audits, something that can be done for both of the existing boards currently. Audits of WEDC in 2012 and 2013 delineated numerous failings, including losing track of $12 million in overdue loans and giving money to ineligible projects.

Barca said WEDC has made numerous improvements, but it's taken a long time and moving too quickly to again significantly change the agency could create more havoc. High turnover in top positions has also plagued WEDC during his four years in existence.

The new entity would be called the Forward Wisconsin Development Authority. Unlike WEDC, which Walker chairs, the governor would not be a part of the new board.