Wisconsin Assembly committee approves Foxconn $3 billion incentive package
Budget committee could hold hearing early next week
MADISON, Wis. — A Wisconsin state Assembly committee approved a $3 billion tax incentive package on Monday for Taiwan-based Foxconn Technology Group, the first vote in what could be an intense month of legislative action to quickly pass the massive deal.
The Republican-controlled Assembly’s jobs and economy committee voted 8-5 along party lines to send the bill to the full Assembly, which plans to take it up Thursday. Republican-authored tweaks were approved that attempt to address some concerns raised by critics that the state is giving away too much to win the $10 billion plant that could employ up to 13,000 workers.
But the core of the proposal remains — including $3 billion in tax breaks for meeting investment and employment targets. The panel rejected 22 Democratic amendments that sought, in part, to provide extra protections for taxpayers and the environment and ensure that workers come from Wisconsin, are paid a living wage and have union protections.
“I ask that we take a deep breath, slow this down a bit and enter into further discussions to come up with the best deal possible,” said Rep. Tod Ohnstad, a Democrat from Kenosha near where the plant may locate.
Republicans defended the deal as a once-in-a-lifetime opportunity.
“This is an investment that makes sense and we cannot look the other way and let this opportunity go by,” Republican Rep. Bob Kulp said.
The Legislature’s budget committee could hold a hearing on the measure early next week, with a vote in the Republican-controlled Senate sometime shortly after that.
“Rather than rushing through a $3 billion tax break for a foreign corporation, we need to make sure Wisconsin taxpayers aren’t being taken for a ride,” said Democratic Senate Minority Leader Jennifer Shilling in a statement.
The proposal must clear both the state Assembly and Senate in identical form and be signed by Gov. Scott Walker before taking effect. Walker negotiated the deal, which was announced by President Donald Trump with great fanfare about two weeks ago. The deal requires the Legislature to pass the tax break bill by Sept. 30.
Despite the Democratic opposition, Republican Assembly Speaker Robin Vos said last week he expected the bill to pass with bipartisan support. Foxconn is eyeing locations in Kenosha and Racine counties in southeast Wisconsin, areas of the state that include several Democratic lawmakers. It also is considering a secondary site in Dane County, a Democratic stronghold.
Foxconn has said it may invest $10 billion on the plant that would open in 2020 with 3,000 but could expand to 13,000 people within six years.
Concerns about what the state is offering Foxconn increased last week when the nonpartisan Legislative Fiscal Bureau said it will take at least 25 years for Wisconsin taxpayers to break even on the proposed incentives. It would take Wisconsin longer to break even depending on how many workers at the plant come from Illinois, the analysis said.
Under the bill, for every acre of wetland disturbed on the Foxconn site, two acres would have to be restored. The amendment approved Monday would say those should be in the same watershed, if possible. But other key environmental provisions, including exempting Foxconn from having to file an environmental impact statement, remained.
The committee also voted to tie payroll tax credits to the number of jobs Foxconn creates that pay between $30,000 and $100,000. The bill was also changed to call for state officials to encourage in its contract with Foxconn that it hire Wisconsin residents, addressing concerns that many of the workers would come from neighboring Illinois.
The committee also approved spending $20 million on worker training to help create a pipeline for high-tech workers who would be needed at the plant.
If constructed as promised, the Foxconn facility would be the first liquid crystal display monitor manufacturing plant outside of Asia.