Young men and women used to dream about starting a business in their garage, or discovering a way to make a living while doodling on the back of a napkin in an all-important moment of inspiration. Today, they’re more apt to dream about finding a taxpayer subsidy or low-interest, government business loan.
Subsidies are easy to find. Wisconsin’s Legislative Audit Bureau published a review of the state’s economic development programs the other day, and found that since 2007 there have been 196 of them that dispersed up to $1 billion in financial assistance.
No one, I suspect, has any real idea just what these programs accomplish.
There’s a small problem. Many of the recipients, the audit discovered, don’t always submit the reports that are supposed to help taxpayers determine whether the loans and grants and tax credits are a good investment. But there’s also a much larger problem the audit ignored. The case of Mercury Marine, the Fond du Lac engine and boat manufacturer, shows why.
In March of 2010, the Wisconsin Department of Commerce gave Brunswick Corp., the parent company of Mercury Marine, a $10 million grant. The cash, federal stimulus money actually, was funneled through the State Energy Program and was spent on new windows, HVAC improvements and energy-efficient lighting at the Mercury Marine plant, among other things.