Tax breaks for Foxconn plant considered in Wisconsin
Supporters of a planned $10 billion electronics factory that could bring 13,000 jobs in the largest economic development project in Wisconsin history called it a once-a-generation opportunity during a public hearing Thursday, while critics said the state was being held for ransom.
State lawmakers are moving quickly to approve a $3 billion tax incentive deal for Foxconn Technology Group, based in Taiwan. The company, the world's largest contract maker of electronics, announced last week that it planned to construct the first liquid crystal display panel factory outside of Asia in southeast Wisconsin. The deal, which Wisconsin leaders and President Donald Trump have heralded as transformational for the state and national economy, requires the state to approve $3 billion in tax breaks tied to Foxconn hiring and spending as promised.
Thursday's hearing came just six days after the bill was introduced. Democratic critics, who don't have the votes in the Republican-controlled Legislature to stop it, have cautioned that there shouldn't be a vote without a detailed analysis from the nonpartisan Legislative Fiscal Bureau.
"Why do we have to be held ransom for $3 billion?" asked Democratic Rep. Amanda Stuck, of Appleton. "Why should they come here with their hand out when there are already reasons to be here?"
Wisconsin's top economic development official Mark Hogan said Wisconsin had to be competitive with other states also trying to land the plant.
Critics have raised alarms about other provisions waiving environmental permits and regulations to speed construction of the plant. Foxconn has said it intends to build a campus with 20 million square feet of office space over 1.56 square miles. But critics question whether Foxconn will follow through, noting that it promised in 2013 to invest $30 million and hire 500 workers for a new, high-tech factory in Pennsylvania that was never built.
"We cannot let this opportunity pass us by," said Scott Neitzel, the top aide to Gov. Scott Walker.
Foxconn CEO Terry Gou submitted a statement that was read by committee chairman Rep. Adam Neylon. Gou said the project would "transform the American electronics industry."
"Made in America makes sense for Foxconn and our customers and our business partners," Gou said in the statement.
Foxconn hopes to open the plant by 2020 with 3,000 workers that could grow to 13,000 over six years. Walker's administration said there would be 22,000 additional indirect jobs created through the plant's opening, 16,000 of which would be construction-related.
Under the deal, most of the $3 billion in tax breaks would be tied to Foxconn delivering on its investment and job creation promises. The money would go as cash payments, as much as $200 million, but there is a provision for the state to recoup the money if the jobs are lost.
There is also a provision calling for the state to reimburse local governments 40 percent of costs related to infrastructure expenses, like expanding roads and sewer lines, if the factory is not built.
The bill would also allow the state to borrow $250 million for the Interstate 94 rebuilding project, which connects Milwaukee and Chicago and is near where the plant is expected to be.
The committee on jobs and the economy planned to vote on Tuesday to advance the bill to the full Assembly, which is expected to pass it as soon as Aug. 14. It must also clear the GOP-controlled Senate, but Republicans there have said they first want to pass Wisconsin's month-late budget.
Foxconn is best known for making iPhones and other Apple devices but its long list of customers includes Sony Corp., Dell Inc. and BlackBerry Ltd. In addition to the primary plant in southeastern Wisconsin, Foxconn is also eyeing a location in or near to Madison for a possible secondary site.
Madison Mayor Paul Soglin said during a news conference Thursday that Foxconn wants green field space for a facility that could employ as many as 600 people.
He said he has offered the company two field sites as well as a shuttered Oscar-Mayer plant in the city. He acknowledged the plant isn't what Foxconn wants but said it would make sense for the company.
Soglin, who is mulling a run for governor, warned that the city would not get into a "race to the bottom" in incentives.
"We are not in a position where we have to give away the farm," Soglin said.
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