Confirmation hearings held for Hughes, Pechacek

By: - March 25, 2021 6:35 am
Amy Pechacek and Missy Hughes

Amy Pechacek (left), secretary-designee for the Department of Workforce Development, and Missy Hughes, CEO and secretary-designee for the Wisconsin Economic Development Corp., speak during back-to-back Senate committee confirmation hearings Wednesday (screen capture | Wisconsin Eye)

Wisconsin’s economy and workforce were in the spotlight as two cabinet nominees sat for confirmation hearings Wednesday.

Senate votes have not been scheduled on the nominations of Missy Hughes as secretary and CEO of the Wisconsin Economic Development Corp. (WEDC), or Amy Pechacek as secretary of the Department of Workforce Development (DWD).

That the hearings were held at all, however, suggested that the Republican-led state Senate may be preparing to move ahead in approving additional members of Gov. Tony Evers’ cabinet more than two years after he took office and more than a year after the most recent confirmation.

Wednesday’s back-to-back hearings for Hughes and Pechacek took place before the Senate Economic and Workforce Development Committee. In their remarks to the committee as well as in the question periods that followed, both spoke of their visions and priorities for their agencies, along with the challenges that their departments had faced in the COVID-19 pandemic.

Economic development

Hughes, who took office Oct. 1, 2019, said that WEDC’s pre-pandemic programs — incentives for large businesses and manufacturers, community revitalization programs and assisting entrepreneurs — are still active. But as the coronavirus upended the economy, especially in the restaurant and hospitality industry, the agency plunged into carrying out a series of grant programs to help small businesses, concentrating on those with no other sources of aid.

In the typical year the agency awards about 300 grants, loans and tax credits. “Last year we made more than 60,000,” Hughes said.

Wisconsin Economic Development Corp. CEO Missy Hughes (Photo courtesy of WEDC)

Hughes said that the pandemic exposed challenges for the state that WEDC would work to address. In the economic aftermath, Wisconsin has lost nearly a third of its small businesses, with the impact hitting hardest in minority-owned businesses as well as in rural communities.

She described the WEDC as an agency that, while continuing in its original missions, is also increasing its focus on small business and encouraging the state to ensure its assets are robust enough to keep people.

“Economic development is ultimately about people,” Hughes said. “It’s about having the opportunity to participate in the economy and removing obstacles that keep Wisconsinites on the sidelines. It’s about making sure that Wisconsinites have the skills and abilities to work for the companies that need them to grow and thrive.”

When Sen. Patrick Testin (R-Stevens Point) asked Hughes her view of the WEDC’s role in drawing skilled workers to the state, she replied that promoting Wisconsin as a good place to live and do business wasn’t enough.

“We also have to make sure that when we’re saying that, we’re able to deliver it for folks,” she said, in the form of a sturdy infrastructure and services people want, including adequate child care, health care or reliable broadband internet service.

“We need to be making sure that we’re investing in our communities and we’re investing in our infrastructure, and then WEDC will also take on the role of making sure that we’re talking about it and promoting the great things about Wisconsin,” Hughes said.

Agency history

Gov. Scott Walker and the Legislature created WEDC, a state agency that also has private sector participation, to replace the state’s former Department of Commerce. Using grants and tax incentives and other financial mechanisms, it has helped businesses making capital investments and promising to increase employment.

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The WEDC’s first eight years were the subject of controversy over some of its projects, most notably the Foxconn development in Racine County, which was promised state and local tax credits and other aid in excess of $3 billion. To date, the company has not qualified for any of Wisconsin’s tax credits because it has departed from its original plan, which was to build advanced flat screens for electronics applications. It has since floated a series of alternative possible uses for its plant, none of them coming to fruition.  

WEDC and the Taiwan-based manufacturer have been in discussion over how to “realign their contract [for the state’s tax credits] with their project” in response to Testin’s request for an update, Hughes said. “I’m really optimistic about those conversations,” she added. “Throughout my tenure, my goal has been to find a partnership with Foxconn that works for Foxconn and works for Wisconsin.”

A U.S. Postal Service contract with Oshkosh Corp. to build new postal delivery trucks offers an opportunity to connect with Foxconn’s latest proposal, which is to enter the electric vehicle market, Hughes added.

Workforce development

Pechacek joined DWD in September charged with addressing an unprecedented backlog of unemployment insurance (UI) claims that had festered since early in the pandemic, when hundreds of thousands of people were laid off.

Amy Pechacek, secretary-designee, Department of Workforce Development (DWD)

On the eve of the second of three critical Legislative Audit Bureau reports on the UI program, Evers fired former DWD Secretary Caleb Frostman, naming Pechacek, who was in the Department of Corrections, as a transitional director. The governor appointed her secretary at the end of 2020.

In her hearing Pechacek reviewed the steps by which the department reduced the backlog in the months that followed her arrival. She also reported progress on the department’s beginning steps to overhaul the technology that manages its UI application and approval system, and described elements of the Evers 2021-23 budget proposal that focus on worker training and economic recovery.

“The COVID-19 pandemic has underscored and exacerbated existing economic disparities, and has had disproportionate effects on certain communities across our state,” Pechacek said. “It’s also likely had a permanent impact on certain industries. DWD is here to help workers and employers adjust to the new economic realities.”

Both Hughes and Pechacek received a cordial reception from lawmakers Wednesday, and both appear to have garnered a measure of goodwill. Sen. Dan Feyen (R-Fond du Lac), the committee chair, complimented Hughes and the WEDC for having efficiently processed applications for the numerous grant programs that were instituted because of the pandemic.

Testin, the committee’s vice chair, credited Pechacek with drawing down the UI backlog.

“I know you inherited a tough situation,” Testin told her Wednesday. “I don’t think any of us are envious of the position that you were in, but I appreciate the efforts to really turn things around with unemployment insurance.”

Confirmation votes haven’t yet been scheduled for either nominee. Feyen said he intended to schedule committee votes on the nominations, but would do so after they had met with all members of the Senate.

At that point, they will be the first of Evers’ nominees to be confirmed in more than a year since Frostman was confirmed in January 2020, a year after he was nominated.

Evers’ first agriculture secretary, Brad Pfaff, was in office without being confirmed until November 2019, when the Senate, on a party line vote, instead fired him. Pfaff subsequently ran for Senate and won in 2020 and now sits on the committee that held Wednesday’s hearing.

Evers’ original nominee for secretary of the state Department of Health Services (DHS), Andrea Palm, who became a lightning rod for criticism from GOP lawmakers in the pandemic, left the office in November 2020 to join the administration of President Joe Biden, nearly two years after she was appointed and without ever being confirmed.

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Erik Gunn
Erik Gunn

Deputy Editor Erik Gunn reports and writes on work and the economy, health policy and related subjects, for the Wisconsin Examiner. He spent 24 years as a freelance writer for Milwaukee Magazine, Isthmus, The Progressive, BNA Inc., and other publications, winning awards for investigative reporting, feature writing, beat coverage, business writing, and commentary. An East Coast native, he previously covered labor for The Milwaukee Journal after reporting for newspapers in upstate New York and northern Illinois. He's a graduate of Beloit College (English Comp.) and the Columbia School of Journalism. Off hours he is the Examiner's resident Springsteen and Jackson Browne fanboy and model railroad nerd.

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