State News

Foxconn incentive bill passes out of budget-writing committee, on to Senate

The Joint Finance Committee finalized the two-month late 2017-’19 budget Wednesday with the passage of transportation funding, taxes and wrap-up motions.

Image By: McKenzie Halling

Legislation to secure Wisconsin's multi-billion dollar investment in bringing a technology giant to the state is moving swiftly through the state Legislature after the state’s budget writing committee passed the incentive package Tuesday on a party-line vote.

Lawmakers hope to pass two massive pieces of legislation by the end of the week. First, a bill that would give up to $3 billion dollars to Foxconn Technology Group—an electronics company that manufactures LCD screens and is most well-known for producing Apple products—in exchange for the company bringing up to 13,000 jobs to Wisconsin.

The bill must pass by Sept. 30 due to the agreement between Gov. Scott Walker and Terry Gou, the head of Foxconn. The initial agreement was signed on a piece of office paper, reported the Milwaukee Journal Sentinel.

Once out of the Joint Finance committee, the bill will head to the state Senate. The bill has already passed in the state Assembly with bipartisan support, but due to an amendment added in committee to jump any lawsuits against Foxconn straight to the state Supreme Court, the bill must go back to the Assembly before heading to Walker’s desk and signed into law.

State Republicans cheered the bill’s approval.

The incentive package would mark the largest amount of money a state has ever given to a foreign company in U.S. history to influence them to come to a certain area. Foxconn will not receive the full $3 billion taxpayer dollars until the company has created 13,000 jobs and fulfilled other promises.

An amendment to the bill assigned an economic development agency to track Foxconn’s job creation rate, but didn’t set a minimum number of jobs that Foxconn must create before getting paid.

Walker was joined by President Donald Trump and Paul Ryan in August to announce Foxconn’s decision to come to Wisconsin. The deal represents Trump’s fulfillment of one of his campaign promises—bringing manufacturing jobs, many of which have moved overseas, back to the states.

Estimates say the deal would bring more than 13,000 direct jobs at the Foxconn plant. If all goes according to plan, Foxconn’s presence in Wisconsin could create 22,000 indirect jobs in the form of restaurants and other local business.

It will take 25 years until the state’s investment in Foxconn is slated to break even.

The site where the technology plant will be built is expected to be in Racine or Kenosha County because huge factories like Foxconn need a high quantity of water, making southeast Wisconsin an ideal point with easy access to Michigan Lake.

Some state Democrats, however, are concerned about the impact the plant could have on the environment.

“I would love to support a proposal to help create 13,000 new jobs in Wisconsin but I cannot give away our water, wetlands and environment to get there,” said JFC member state Sen. Jon Erpenbach, D-Middleton.

The plant will cost $10 billion to build and is expected to create 10,000 construction jobs in the state.

The plant, deemed “Wisconn Valley,” borrowed from Silicon Valley, will be so large it can fit 11 Lambeau fields, officials say.

The other key bill the Legislature must address is finalizing the state’s biennial budget. The spending bill is two months late due to disagreements between the two Republican-controlled chambers over transportation funding and taxes.

Although Foxconn isn’t likely to significantly affect the 2017-’19 budget, it will play a pivotal role in future budgets. It will also influence the current budgets’ transportation funding.

As part of the incentive package, officials want to borrow $250 million for Interstate 94 South to finish projects and maintain the road which trucks will travel on to transport Foxconn products.

To fulfill all the state’s transportation needs, officials also requested $341 million from the federal government. The state, however, was only granted $66 million, a fraction of the original request.

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