- MARK SOMMERHAUSER msommerhauser@madison.com
- Jan 17, 2018
Taxpayer incentives for the Foxconn project currently total $4.5 billion, a nonpartisan state agency says.
MATTHEW DeFOUR, STATE JOURNAL
A newly released memo projects the public cost for a planned Foxconn manufacturing project near Racine could near $4.5 billion — nearly 50 percent more than the $3 billion cost initially cited by the project’s chief proponent at the state Capitol, Gov. Scott Walker.
The figures were compiled by the nonpartisan Legislative Fiscal Bureau in a memo requested — and released Tuesday — by Assembly Minority Leader Gordon Hintz, D-Oshkosh. The individual cost figures are not new but had not previously been compiled in a single document.
They reflect costs to state government, mostly through tax credits for Foxconn over a 15-year period. They also include costs to local governments near the proposed site of the Foxconn campus, in eastern Racine County.
The breakdown of public costs from the project, according to the memo, is as follows:
- State tax credits, $2.85 billion
- Local government incentives, $764 million
- U.S. Interstate 94 North-South project, $408 million
- Utility costs, $140 million
- State sales tax exemption, $139 million
- Road improvements, $134 million
- Worker training, $20 million
- Local government grants, $15 million
Walker and Republican lawmakers who helped him pass the incentive package for Foxconn say it will give the state’s economy a transformative boost. The Taiwanese company says it plans a $10 billion liquid-crystal display manufacturing plant that could employ as many as 13,000 people.
Walker’s office noted the public incentives “are tied to job creation and investment, and the local government incentives will be repaid by the taxes Foxconn generates.”
Walker said in a tweet Tuesday that “once upon a time, Democrats claimed to be for good-paying, family-supporting jobs.”
“Now they seem to find new ways to attack them,” Walker said.
Hintz said the figures validate Democratic lawmakers’ predictions that the cost of the project to the public would exceed the $3 billion amount originally cited by Walker and his state jobs agency, Wisconsin Economic Development Corp.
“That money is not going to be available for higher education, is not going to be available for K-12 education, is not going to be available for infrastructure,” Hintz said.
At least one of the figures cited in the memo might have been incurred without the Foxconn project: the I-94 North South project. That project had been on the short list of projects in line for state funding prior to the Foxconn announcement. After the announcement, lawmakers expedited it and included funding for it in the Foxconn legislation.
The memo makes clear that some costs associated with Foxconn should not be viewed as a “state revenue loss” because “it is highly unlikely that Foxconn would locate in the state without the incentives.” That includes the $139 million state sales tax break for materials used to build the company campus.
The local government incentives are tax incremental financing, or TIF, incentives to fund the costs of public improvements associated with the Foxconn development, according to the memo. They are structured to be repaid with payments connected to the increased property value generated by the new development.
The utility costs, to build an electricity transmission line to power the Foxconn campus, are to be absorbed by American Transmission Company, not state or local governments. The memo says its “impact on individual rate-payers is not expected to be significant.”
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