Empower Wisconsin | Feb. 3, 2020
By M.D. Kittle
MADISON — The big story recently for Foxconn-hating media outlets was that the Taiwan tech giant’s slower development pace in Racine County could free up as much as $150 million for the state.
Buried in the coverage was the real story: that the incentives package agreement crafted by Gov. Scott Walker and the Wisconsin Economic Development Corp. (WEDC) is protecting taxpayers.
The Legislative Fiscal Bureau last month posted fresh projections showing the state’s general fund is expected to take in $800 million more in tax revenue than previously expected.
LFB also notes that the 2019-21 state budget includes maximum cash payments Foxconn would receive should it hit its employment and investment targets. All told, the company could earn nearly $3 billion in incentives over time.
As the mainstream players gleefully reported, Foxconn hasn’t created enough jobs or made enough capital expenditures to earn hundreds of millions of dollars in tax credits under the terms of the $10 billion development agreement. While Foxconn has not hit early development goals, it hasn’t been collecting on incentives.
And that’s the ultimate point for taxpayers.
“I think this is a taxpayer protection story,” said state Sen. Dale Kooyenga (R-Brookfield). He said the incentives deal specifically requires Foxconn to “perform first” before it receives tax credits.
Democrats have blasted the Foxconn deal, mainly because it was the work of Republicans. More so, it was the work of Republicans they truly loathe, Walker and President Trump.
While Foxconn’s development pace may not be as rapid as naysayers of the project would like, the company is delivering massive economic growth to the Racine area. Recent estimates show Foxconn’s Wisconn Valley facilities, completed or under construction, total more than a half-billion dollars.
“…(T)o put that into perspective, $522 million would already be more than the rest of Racine County’s combined manufacturing tax base of $513.9 million as of last year,” the Racine Journal Time reported.
That’s investment that did not exist before Foxconn Chairman Terry Gou pledged to build his first North American technology plant in southeast Wisconsin.
By the way, don’t think the same liberals who are rooting for Foxconn’s failure will give taxpayers any money back from the incentives fund.
“Because the Foxconn project has fallen apart and is not on schedule, the amount included in the project is available to spend on other things,” Assembly Minority Leader Gordon Hintz (D-Oshkosh) told Wisconsin Public Radio in his usual hyperbolic way.
Don’t expect “tax relief” in their list of “other things.”