Kimberly-Clark bailout looking even worse, now that we know the details

Less than a week after Governor Walker announced a deal with Kimberly-Clark to give them up to $28 million over 5 years to keep one of their plants open in northeastern Wisconsin, Wispolitics got their hands on the contract the Wisconsin Economic Development Corporation (WEDC) plans to have with K-C. And the details might make this already-sketchy deal look even worse for Wisconsin taxpayers.

The bulk of the awards Kimberly-Clark could receive each year comes from capital investment credits, which total $20 million over the five-year deal, or 10 percent of the $200 million the business has pledged to invest at the Cold Spring facility.

But the contract notes any unearned capital investment credits can be carried forward for the company to earn in the later years of the deal.

In order to receive the tax credits, the contract requires Kimberly-Clark to maintain 388 full-time jobs at the Cold Spring facility and 2,418 total full-time employees across the state.

A WEDC spokesman says the statewide employee count is made up of the company’s 19 plants — including Neenah Nonwovens, another Fox Valley facility. That plant, though, is slated for closure by the middle of next year.

This is where I remind you that there were an estimated 600 total jobs at the Cold Spring facility and the Neenah Nonwovens plant at the start of this year. So K-C can CUT 200 jobs between those facilities and still be OK under this contract.

Tamarine Cornelius of the Wisconsin Budget Project gave some perspective as to how much will be paid out to this one company under this contract.

Kimberly-Clark is on track to get a state subsidy of $8.5 million next year. There are 302 school districts in Wisconsin that will get less than that in general state aid. #priorities pic.twitter.com/SZebhUb3mV

— Tamarine Cornelius (@Tamarine608) December 18, 2018

As Cornelius alludes to, when you have WEDC handouts, that money is not available for other priorities. But unlike most budgetary items, these WEDC handouts are not debated in public by the State Legislature, but instead awarded through closed-door negotiations and a rubber stamp from the Scott Walker and WisGOP-stacked WEDC Board. And that WEDC Board just got further WisGOP protection from this month's Lame Duck bills, and doesn't have to go as far to verify "job creation".

I also took a look at the contract with Kimberly-Clark, and noted that most of the handouts go to things THAT K-C WOULD ALREADY DO if they stayed in Wisconsin.

So Kimberly-Clark gets a 10% kickback on capital investments they would make anyway, a 1% kickback on "supply chain" purchases they'd make anyway, and get $5.5 mil if they only cut 200+ jobs.

And we pay for it.#wiunion #wipolitics #wiright @WisDems https://t.co/48aPpZcnhe

— JakeEdwards (@JakeMadtown) December 18, 2018

And then in 5 years, does K-C try for more tax-funded extortion from the state? And where does this leave every other papermaker in Wisconsin that has to deal with the same economic pressures without K-C's tax-funded assistance?

The sunk costs of this WEDC welfare is yet another mess that Tony Evers is going to have to clean up when he takes over in 19 days, and as I've noted before, WisGOP has rigged WEDC's funding and administration in such a way that it won't be easy to undo.