Fox-con numbers keep getting worse, so GOP hacks turn up the spin

As I like to say, “When you’re lying, you’re losing.” Well, if the recent comments from Governor Walker and his puppetmasters are any indication, they are losing big-time when it comes to convincing people that the Fox-con is a good idea. Take a look at this pile of crap from the mouthpiece for Wisconsin’s right-wing corporate oligarchs, where he claims the Legislative Fiscal Bureau isn't taking into account all of the benefits of Foxconn.

Wisconsin Manufacturers & Commerce lobbyist Scott Manley said the analysis “fails to take into account the tremendous ripple effect Foxconn will have on the state’s overall economy.”

“There is no doubt that Wisconsin will experience greater revenue growth thanks to this once in a lifetime investment from Foxconn,” Manley said. “In the long run, this project will allow for greater investment in the state’s priorities, not less.”

Those are two paragraphs from WMC’s chief scumbag are dishonest, to the point of flat-out LIES. The LFB analysis absolutely accounts for higher revenue growth from the Fox-con, and the “ripple effect” of more jobs in the nearby area. This passage comes directly from the LFB paper on the Fox-con, which assumes the “best-case” scenario for jobs and wages on this project.

The estimates assume that the project will require an average annual employment of approximately 10,200 construction workers and equipment suppliers earning an average total compensation of approximately $59,600 (including benefits) per year during the four-year construction period (from 2018 through 2021). Total income for these individuals is estimated at $2.4 billion. In addition, it is assumed that nearly 6,000 indirect and induced jobs will be created during the construction period, with an average total compensation of $48,900.

It is estimated that the additional construction-period jobs would generate increased state tax revenues (primarily income and sales taxes) equal to approximately 6.3% of the additional gross wages. The total increased state taxes associated with the construction period are estimated at $186.9 million.

As noted, permanent staff at the Foxconn facility are estimated to increase from about 1,000 in the second half of 2017 to 13,000 beginning in calendar year 2021. The average annual wage for these employees is estimated at $53,875, based on a headcount distribution, by job type, provided to EY by Foxconn and median wages for each occupation from the Economic Research Institute. Total ongoing payroll at the company is projected to be $13.8 million for the remainder of this year and increase to approximately $700 million annually beginning in 2021. State tax revenues associated with the additional employees and wages are estimated to increase from about $900,000 this year to $44 million annually beginning in 2021.

Indirect and induced jobs associated with the project are estimated to total 22,000 beginning in 2021, based on a multiplier of 2.7. Average annual wages for these individuals are estimated at approximately $51,000. Total ongoing wages are estimated at $1.12 billion annually, and related state taxes are estimated at $71 million per year. Smaller impacts are estimated in calendar years 2017 through 2020 as the project ramps up.

The analysis assumes practically all of the employees that both work at the facility and the Fox-con related jobs in the supply chain will live in and spend money in Wisconsin – quite a risky assumption for a facility that will be located within 15 miles of the Illinois border.

Now, it’s not a bad thing in itself that FIBs might be working on the Foxconn construction or in Foxconn-related jobs. It is logical to assume that if those individuals work in Wisconsin, they will spend some of their money in Wisconsin, benefitting the economy that way (as part of those indirect/induced jobs). In addition, tax reciprocity with Illinois means that Wisconsin would cut a smaller check to Springfield if more people from Illinois worked here. It wouldn’t add tax revenue, but would help the state’s bottom line in a similar fashion by “lowering” spending.

A bigger concern is the idea of Illinois freeriding on any economic improvement that comes from Foxconn, while Wisconsinites pay for it. The Chicago Sun-Times pointed this out in an editorial earlier this month.

Best we can tell, it’s a crap shoot as to whether luring the giant electronics company to Wisconsin would work out well for you, given the billions of dollars in tax breaks your governor has promised, but it would be terrific for Illinois. It would cost our state nothing, yet up to half of the new jobs could go to our residents, while O’Hare Airport would get the new international travel business.

The best thing that ever happened to Illinois might be losing Foxconn to you, Wisconsin. Much appreciated….

Wisconsin would be taking all the risks, even as Illinois enjoyed a nice share of the benefits. The Foxconn plant likely would be located right across the border in Kenosha County or Racine County. The commute from Waukegan to Kenosha is just 16.5 miles. The commute from Zion is ten.

Border wars are stupid. Interstate job-poaching is nothing but a race to the bottom. And the best way to tap global markets would be to create a regional economic development strategy.

But Scott Walker’s not interested in a regional partnership, as he and WEDC frequently use their tax giveaways incentives around Illinois as an example of Wisconsin “winning." This is an attitude I’ve frequently compared to the Packers caring more about being better than the 3-13 Bears than actually trying to win a Super Bowl. Because with cuts in education, road funding and quality of life, Wisconsin is definitely not trying to excel in the Age of Fitzwalkerstan.

And there’s little reason to believe Wisconsin's situation would become better any time soon if the Fox-con is approved, as Mark Sommerhauser noted in Sunday’s Wisconsin State Journal that the LFB says the biggest costs to taxpayers would come in the near future. Which means other state services will face more budget cuts, even if the Fox-con does create a lot of jobs

The budget impact would be most acute from 2021 through 2026, when the credits would cost the general fund between $169 million and $196 million each year, according to the fiscal bureau analysis.

Matt Kussow, director of Badger Advocates, a nonprofit group independent of UW-Madison that rallies state support for the university, said the cost of the Foxconn incentive deal is worrisome — in part because university funding often is targeted in a budget crunch.

“Are we concerned? Absolutely,” Kussow said. “From a state budget perspective, absolutely, this will put pressure on very valuable resources.”

This is why State Rep. Gordon Hintz rightfully questioned UW-Milwaukee Chancellor Mark Mone for testifying in favor of the Fox-con in last week’s public hearing in Sturtevant. Mone claimed that UWM would benefit from the partnerships and research that may come from Foxconn, but Hintz noted that lower available revenues would cause fiscal problems, and basically told Mone “You’re crazy if you think UWM won't see budget cuts as a result of this.”

I'm not even going into the environmental damage and displacement of other economic activity that would happen as a result of the Fox-con (which by itself should be enough of a concern to put this thing back in the oven and massively improved), because the absurd costs to Wisconsin taxpayers and the resulting strain on every other part of the state’s finances that are the largest problem with this giveaway. And those worsening budget situation caused by the Fox-con should make anyone who cares about this state should say “HELL NO” to this corporate welfare scam.