$3 billion package:— Patrick Marley (@patrickdmarley) July 26, 2017
$1.5b - income tax credits for job creation
$1.35b - income tax credits for cap investment
$150m - sale tax holiday https://t.co/HlXuVmOW9S
That "sales tax holiday" is a write-off for businesses that will do construction work on the Foxconn project, which Marley says mirrors a similar provision for work on and around the new Bucks arena in Milwaukee.
Among many questions that arise with announcement is "when do we see an actual bill, and when will the State Legislature vote on it?" According to the Wisconsin State Journal's Mark Sommerhauser, Governor Walker answered that part today.
Handout from @GovWalker office says a special session of the WI Legislature will be called to pass an incentive package for Foxconn— Mark Sommerhauser (@msommerhauser) July 26, 2017
(Raises hand) Why are we doing a special session for this when we STILL HAVE TO COMPLETE THE STATE BUDGET? Shouldn't we do these things together, given the massive tax handouts and infrastructure that'll be part of it, so we can see how all the pieces fit together?
To ask the question is to answer it. The Walker/WisGOP folks want to (ab)use the special session rules to hide the details of this package, and jam it through as quickly as possible. They don't want it to be taken in as part of the already messy budget deliberations. Not a good sign.
Neither is it a good sign that WE DON'T EVEN HAVE A SITE FOR THE PLANT, only that it'll be "somewhere in Racine or Kenosha County". Given that this plant and related sites are allegedly going to be 1.8 SQUARE MILES, it kind of seems like we might need to have a spot cleared and infrastructure ready to go to handle a facility that could have thousands of people working at it (if we ever get thousands of people working there).
Oh, and here's another red flag.
I mean what could go wrong with that? It's not like there were any problems from WEDC's most recent audit from 2 months ago.
Gov. Scott Walker's troubled economic development agency is still struggling, failing to accurately track jobs its awards are supposed to create and retain, handing out nearly $10 million in bad loans over the last two years and failing to turn over millions in tax credit repayments to the state, an audit released Wednesday shows.Even before the massive $3 billion price tag with Fox-conn was revealed, State Representative Jimmy Anderson (D-Fitchburg) expressed severe skepticism about the deal. Anderson questioned the priorities of the Walker Administration, and drew a contrast between the huge incentives likely to be given to Foxconn with investments that Walker and WisGOP are choosing not to make.
Wisconsin taxpayers should not be subsidizing private corporations at the expense of our children, schools, and roads. And despite Governor Walker’s alleged fiscal conservatism, the truth is that he is fine with spending money so long as it doesn’t go to you, the real hard-working taxpayers of our state. The Republican-controlled legislature and Governor Walker have consistently asked you to tighten your belt or have rejected other opportunities to create family sustaining jobs, but when a multinational corporation wants a multibillion-dollar handout, Governor Walker more than bends over backwards. All the while, our schools struggle to stay open, Main Street is littered with potholes, and huge numbers of Wisconsinites cannot even drink the water coming out of their taps. That’s not leadership.Well stated Jimmy. And given our deficit-ridden budgets, you have to wonder what gets hurt in the next few years as Fox-conn racks up its tax write-offs, which adds to that bill. And I can't think that Foxconn would be thrilled with the prospect of looking at a lot of this for the next 5-10 years as Wisconsin falls further behind on highway repairs.
This is why I’m going to make a wacky prediction here- the FoxConn package will include the Trump Administration allowing Wisconsin to put toll lanes on I-94 between Milwaukee and the state line. Wisconsin would need approval from DC to put in tolls, but Trump has indicated that he is fine with tolls as a way to pay for roads, as part of having corporations take on much of the costs of building the roads (and getting a payback for doing so). Note this story from May.
President Donald Trump administration’s proposal for a $1 trillion bill to improve the quality of the nation’s roads and highways will be paid for mostly by private funding that will be stimulated by $200 billion in federal spending, Transportation Secretary Elaine Chao announced Monday.Wouldn’t the highway next to Foxconn’s new Wisconsin plant be a perfect spot to try out this scam? This would go along with Trump’s pose about “reinvesting in American jobs” and improving infrastructure, while giving Walker a photo op that makes it look like the state’s going in the right direction on both issues (in reality, it’s not). And it would explain why the press conference was in DC today with Trump and House Speaker Paul Ryan- because they're going to play a role in this deal.
Speaking at an event in Washington, Chao said the transportation bill will include $200 billion in federal spending that will “be used to leverage $1 trillion in infrastructure investment over the next 10 years.” The remainder of the money would come from private companies that would enter into partnerships with local and state governments to provide financing that is necessary to complete expensive construction projects in exchange for revenue that would be generated by things such as road tolls or rail fares.
This toll scam might be the only way the State of Wisconsin can come close to fixing the roads in the next decade, especially if the state is giving away $1 billion to $3 billion to Foxconn, which is on top of the $1 Billion deficits the state is facing for both the Transportation Fund and the General Fund. Of course, it doesn’t change the fact that it takes 3-4 years before the state would ever get anything back for the tolls, and would cost hundreds of millions of dollars (that we don’t have) to start up. Which may be where the
Now there is a long way to go before we ever see any LCD panels get made in Wisconsin. I would love to be proven wrong on this, and hope that Foxconn chose Wisconsin because it was a good location with a strong work force, and that the incentives that are given out are limited in the final package, potentially making it a worthwhile investment for the state to get involved in. And I hope part of that final package includes something that keeps homeowners and current businesses in the area from being socked with major tax increases at the local level (because you know there will be more subsidies at the local level, and the already-existing taxpayers will be paying the difference).
But if it’s anything I’ve learned in the 6 ½ years of the Age of Fitzwalkerstan, it’s that these guys are never about fiscal responsibility and legitimate, long-term economic development, but instead are all about political poses and other attempts to trick unsuspecting voters into thinking this state is doing fine. This is despite chronic budget deficits and job growth that’s been in the lower half of the US every year that Scott Walker and WisGOP has been in power.
Which makes me wonder this - how desperate are Walker, WisGOP and Trump these days? Sure seems like they feel they need to try to pull a lot of stunts and trick plays like photo ops with Chinese companies as they give the store away. And just like in football, these guys are likely running those trick plays because their current game plan is failing- bigly.