Wis. Counties Association: AB 605 will help state reach top priority of job creation

Contact: Mark D. O’Connell

WCA Executive Director

866.404.2700

County and Private Business Officials Testify Before Assembly Committee on Urban and Local Affairs Today

At a time when Wisconsin’s economy continues to struggle, a bill aimed at creating jobs continues to make its way through the legislative process, where today county economic development, local government and private business officials testified on Assembly Bill (AB) 605 before the Assembly Committee on Urban and Local Affairs.

“During this recession, Wisconsin has lost thousands upon thousands of good paying jobs,” said WCA Executive Director Mark D. O’Connell. “Governor Doyle has made it clear in his State of State address that job creation is his number one priority. In every election this year, from the Governor’s office to local races, job creation is the most important issue. AB 605 helps local governments and businesses rise to the call and help the Governor and our elected officials reach their top priority.”

O’Connell continued, “If our state is to recover and prosper, then we must find ways to get people back to work. We must find ways to get inexpensive capital into the hands of those businesses that are ready to expand and grow. AB 605 is a powerful tool that will allow private sector businesses and the public sector to accomplish this necessary goal.”

The bill is authored by Representative Donna Seidel and authorizes the creation of a joint powers authority, or commission, which can act at the request of Wisconsin local governments to issue conduit bonds for private entities engaged in public benefit projects through the financing process – or refer them to WHEDA, WHEFA, or the state Department of Commerce – saving individual local governments the financial burden of directly employing the necessary experts.

“In nearly every corner of the state, there are businesses that are ready to grow, but cannot acquire affordable financing; or financing at all,” said Patrick Drinan, Sheboygan County Economic Development Corporation Executive Director. “These are businesses that need to expand; that need to hire more people if they are to compete in the global economy and this bill will give them additional options.”

AB 605 gives access to capital for both public and private sector projects. This is access that has been difficult at best with frozen credit markets and extremely high capital costs. The Senate companion bill authored by Senator Pat Kreitlow, SB 399, is slated for a vote before the Senate Committee on Economic Development Activity on Thursday, February 25, 2010.

Under current law, Wisconsin local governments may issue federally tax-exempt municipal bonds for public purposes and conduit bonds for private projects that serve a public benefit. Additionally, unique financing opportunities have recently been made available for the use of these development tools through $3.8 billion in Midwest Disaster Area (MDA) Bonds and $238 million in Recovery Zone Facility Bonds.

However, these financing opportunities have a time limit that require local governments to act quickly in order to promote needed development in their communities. Unlike traditional tax-exempt bond programs, the MDA and Recovery Zone allocations were granted directly to local governments. Therefore, local officials need a central mechanism to effectively use these unique programs – a mechanism that currently does not exist.

Several Wisconsin businesses and government representatives testified today on the benefits of AB 605, including:

* Jim Mortenson of Mortenson Family Farms, Adams County: Multimillion-dollar facility expansion.

* John West of Adams-Columbia County Electrical Cooperative: Equipment upgrades and maintenance.

* Patrick Drinan, Sheboygan County Economic Development Corporation Executive Director.

* Barb Petkovsek, Adams County Administrative Coordinator/Director of Finance

“We are grateful for the leadership of Representative Seidel and Senator Kreitlow and we commend their efforts in championing for legislation that will result in more jobs for Wisconsin,” said O’Connell. “We will continue to work with them to ensure Wisconsin and its economy is positioned for the future.”