Foxconn subsidies headed to Wisconsin governor's desk
CHICAGO -- Wisconsin’s $3 billion incentive package for a proposed Foxconn Technology Group plant is headed to Gov. Scott Walker’s desk.
The plan passed the Assembly Thursday. The Assembly had previously approved the legislation but the Senate made some changes when it took up the bill earlier in the week so another Assembly vote was needed.
Walker thanked the legislature for approving what he called a “historic, bipartisan jobs bill” and said he looked “forward to signing this historic bill into law soon."
Walker had been aiming to have the package in place before the end of the month despite criticism that legal and environmental provisions of the legislation and the state’s fiscal obligations should receive more review. The Taiwanese electronics manufacturer and Walker announced the company’s choice of Wisconsin to house the plant at a White House ceremony with President Trump in July.
The plan calls for an estimated $10 billion capital investment to build and equip the facility by 2020 that will produce liquid crystal display, or LCD, products. Under the incentives package that helped lure the company, the state will grant Foxconn approximately $3 billion in tax incentives over a 15-year period.
The legislation also authorizes $252 million of general fund supported state borrowing to finance infrastructure improvements to the Interstate 94 corridor in southeastern Wisconsin where the plant is to be built. The package also allows the state to back some local borrowing.
Walker has touted the project for 16,000 construction-related jobs and 13,000 permanent jobs it’s projected to create, $348 million in state and local tax revenues during construction, and then $181 million in state and local tax revenues generated annually.
But the investment commitment comes with a hefty price tag that critics say is not worth it and they’ve questioned environmental and legal rules that are relaxed in the legislation.
“The Foxconn boondoggle diverts $3 billion we could invest in our neighborhood schools, higher education, vital infrastructure, or health care for our most vulnerable residents,” Rep. Lisa Subeck, D-Madison, said in a statement ahead of the Assembly vote.
GOP lawmakers altered a controversial provision that the Joint Finance Committee had included which would have allowed legal challenges involving the Foxconn economic development zone to bypass the appellate court and go directly to the state supreme court. Instead, an expedited process challenging any local and state decision would be used with the appellate court gathering information and sending it on to the high court without rendering a decision.
The legislation passed the Senate along party lines with Democrats opposing it. Four Assembly Democrats who represent southeastern Wisconsin districts supported it. Walker is a Republican and the legislature is controlled by the GOP.
A recent report from the non-partisan Legislature Fiscal Bureau warned the state won’t break even from the tax breaks until 2043. A recent report by the Center for Research On the Wisconsin Economy at the University of Wisconsin said the project has the potential to create an economic ripple effect that could generate a nearly $4 return for every $1 in state subsidies.
The project has been billed as the largest economic development project in the state’s history but it’s also the largest subsidized incentives package ever awarded by a state.