Wisconsin Assembly committee approves $3 billion in incentives for Foxconn

MADISON -- A Wisconsin state Assembly committee approved a $3 billion tax incentive package on Monday, August 14th 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. If plans go forward, the Foxconn facility would be the first liquid crystal display (LCD) manufacturing plant outside of Asia, but some argue the details of this deal are hardly crystal clear.

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, August 17th. 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.

"Our amendments were meant to improve the bill and also to protect the people of Wisconsin," Rep. Christine Sinicki, D-Milwaukee said. "The protection of our workers and workers' rights."

"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," Rep. Tod Ohnstad, D-Kenosha said. "Refusing to entertain a single amendment here today leads me to believe there may be no interest in having this be a bipartisan vote."

Republicans defended the deal as a once-in-a-lifetime opportunity.

"It is going to be bipartisan. There will be Democrats who have good faith and wherewithal to bring these jobs to Wisconsin," Rep. Joel Kleefisch, R-Oconomowoc said. "People are going to come here from other states. There's no doubt."

"This is an investment that makes sense and we cannot look the other way and let this opportunity go by," Rep. Bob Kulp, R-Stratford said.

"They have come back with, I think, a very good proposal," Rep. Joan Ballweg, R-Markesan 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.

"If you just do simple math -- addition and subtraction -- it does not work out for the people of Wisconsin," Rep. Amanda Stuck, D-Appleton said.

"How the hell are we giving $3 billion to a company and we don't even know what they need? Who does that?" Rep. Jason Fields, D-Glendale said.

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 September 30th.

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.