Senate passes $3 billion Foxconn incentives package with 20-13 vote

Foxconn

MADISON — The Wisconsin Senate passed $3 billion in cash payments for Taiwan-based Foxconn Technology Group on Tuesday, September 12th, an unprecedented incentive package for the electronics company to locate a flat-screen factory in the state. The bill now heads to the state Assembly, where Republicans say they intend to pass it Thursday.

The 20-13 vote closely followed party lines, with state Sen. Bob Wirch, D-Kenosha, the only Democrat to break ranks and vote in favor. Sen. Rob Cowles, R-Allouez, was the lone Republican against the bill.

"This project will benefit our entire state with tens of thousands of direct, indirect, and construction jobs," Gov. Scott Walker said in a statement after the vote. "This bill is an amazing win for the people of Wisconsin."

Republican leaders approved two amendments before Tuesday's vote, including one that allows Foxconn to get an expedited appeals process through the state court system.

The proposed subsidy would be the largest ever from a U.S. state to a foreign company and 10 times bigger than anything Wisconsin has extended to a private business. It would take at least 25 years for Wisconsin to see a return on its investment, the nonpartisan Legislative Fiscal Bureau estimated.

Alberta Darling

Republican lawmakers urged their Democratic colleagues to vote for the deal, warning about possible consequences if they did not.

"For as many people who are coming to you saying 'Don't do it,' you're gonna hear from more people saying, 'Why in the heck did you mess this opportunity up for us?'" said state Sen. Alberta Darling, R-River Hills.

Foxconn would receive $2.85 billion in cash payments over 15 years if it invests $10 billion in the state and employs 13,000 people. It could also qualify for $150 million in sales tax exemptions for construction equipment.

Republicans gave Foxconn fast-track status in the state court system, allowing the Wisconsin Supreme Court to rule on lawsuits related to Foxconn's economic development zone before state appeals courts. The state Supreme Court could still decide to send a case to the appeals courts.

The language partially reverses a change made last week by the Legislature's budget committee, which had required the state Supreme Court to decide those cases with no opportunity for the appeals court to weigh in. Legal experts had questioned the constitutionality of that change.

Meanwhile, Republicans defeated more than a dozen Democratic amendments, which focused on tighter job-creation requirements for Foxconn. One amendment would've required Foxconn to locate its corporate headquarters in Milwaukee while it receives cash payments from Wisconsin taxpayers.

Jon Erpenbach

"For crying out loud, you get a guarantee when you buy a refrigerator," said State Sen. Jon Erpenbach, D-Middleton. "If it doesn't work, you can take it back and get your money back. There are no guarantees in this legislation and we don't know what we're buying."

In response, Republicans compared the Foxconn bill to the Milwaukee Bucks' arena deal, which cleared the legislature in 2015. Majority Leader Scott Fitzgerald said that deal allowed negotiations on job-creation targets to continue, and the Milwaukee Common Council later put additional hiring requirements on the Bucks.

Scott Fitzgerald

"I'm elated that we're kind of in the same position here today," said Fitzgerald, R-Juneau.

Democrats slammed the comparison.

Milwaukee Bucks arena

"This ain't no Bucks' deal," said State Sen. Jennifer Shilling, D-La Crosse, noting that the Legislature approved $250 million in taxpayer money for the downtown Milwaukee arena compared with the $3 billion for Foxconn.

Democrats argued that the Bucks owners and team president came to the Capitol to meet with lawmakers while Foxconn executives have stayed away.

The Assembly, which like the Senate is firmly in GOP control, takes a final vote Thursday. The bill then would head to Gov. Scott Walker, who led negotiations on the deal and has a deadline to sign a bill by the end of the month.

Wirch, the lone Democrat to vote for the bill, said his decision was a response to Midwestern factory jobs going to China.

"I had to vote to get some of that Far East money coming into our area to create manufacturing jobs," Wirch told FOX6 News. "Manufacturing jobs are the best jobs."

Cowles, the only Republican to vote against the bill, said Tuesday's debate left him with too questions to approve the deal.

"The incentives that Foxconn was presented were too steep," Cowles said in a statement. "The bill as presented on the floor left uncertainties that I felt were too crucial for me to pledge support for this legislation."