Wednesday, December 29, 2021

Foxconn finally gets state tax dollars for some jobs. After $1 billion+ that was already spent for them

Hey look, Foxconn's finally added enough jobs to get some money back from the state of Wisconsin!
Foxconn will receive $28.8 million in state tax credits for 2020, just shy of the maximum award the Taiwanese manufacturer could receive under the revised deal Gov. Tony Evers signed this spring.

WEDC CEO Missy Hughes said Wednesday the state certified 579 jobs the company had created at its Racine County facility, which was within the target range. But it fell short of the target capital investment of $268.6 million by nearly $2.5 million.

Had the company hit that target, it would’ve qualified for $29.1 million in credits....

The Wisconsin Economic Development Corp. on Wednesday also released an auditor’s report from late August that found the company paid $40.2 million in wages during 2020.
So basically, Foxconn had just enough people working at the end of last year that they will get $28.8 million back for building a few warehouses....and whatever is going on in here.

$28.8 million for 579 jobs comes out to just less than $50,000 a job. For that kind of cash, we could have just paid the workers ourselves.

To backtrack, the new Foxconn contract that Governor Evers got them to sign earlier this year is limited to $80 million in total, and means that 10% of Foxconn's capital expenses are paid back. That's better than it would have been under the disastrous original contract that Scott Walker set up with Foxconn 4 years ago, as the Foxconn contract would have given back 15% of all construction costs to the company. That lowering of payback from 15% to 10% means a savings of about $13 million.

The flip side is that the new contract allowed for lower job thresholds for Foxconn to get their refund from the state, to try to salvage something out of this white elephant and keep Foxconn from pulling out entirely (wait, would that be all bad? Anyway). The original contract said that they needed to have 1,820 jobs by the end of 2020, which should remind you about just how BS the claims that Scott Walker, Foxconn and the rest of the lowlifes involved in this scam were giving 4 years ago. Let's go back to the Legislative Fiscal Bureau's original paper on the deal, and remember the numbers that were being thrown around.
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.

Based on these figures, DOA projects that the cost of the refundable state tax credits under the bill will exceed the potential increased tax revenues until the last EITM payroll credit is paid in fiscal year 2032-33. As of the end of that year, the cumulative net cost of the incentive package is estimated at $1.04 billion. Beginning in 2033-34, payments to the company would cease and increased state tax collections are estimated at $115 million per year. DOA estimates that the project's break-even point would occur during the 2042-43 fiscal year.
Yeah, not thinking we're breaking even on this one.

Also remember that those empty Foxconn promises led Walker and WisGOP to blow hundreds of millions of state dollars to upgrade roads while other parts of Wisconsin saw Scottholes crop up all over. Then add on the hundreds of millions more that the local communities are still on the hook for, and are paying big amounts of debt back on today.

For example, the Village of Mount Pleasant paid more than $93 million in debt costs for its Foxconn Tax Incremental District this year, and is planning to re-sell much more debt to cut that cost down in 2022 to $9.6 million between Foxconn and Foxconn's clean water fund, and to keep from going under. (Click on the picture to see the numbers clearer)

That's the real reason Governor Evers and WEDC felt like they had to allow Foxconn to come away with some kind of tax credits, because otherwise that foreign company might well pack up and go off to scam some other place, and leave Wisconsin taxpayers to bail out the local yokels in Racine County who would have bankrupted their community.

Oh, and let's not forget this great nugget from a Wisconsin Public Radio, which goes into another part of the Foxconn grift that has led Mount Pleasant to throw away even more taxpayer dollars.
The project director hired to oversee the struggling Foxconn development in the Village of Mount Pleasant is consistently billing taxpayers for 40 hours per week, but records are unable to account for how all his time is being spent.

Claude Lois is a contracted consultant with engineering firm Kapur and Associates, and he works in Mount Pleasant’s Village Hall. His role as project director has no official job description, and records obtained by Wisconsin Public Radio of Lois’ time card and village-owned calendar do not match...

Lois, who bills $175 per hour, is scheduled to get a raise to $200 an hour starting Aug. 21. Lois declined to comment.

As of Dec. 13, Kapur and Associates billed Mount Pleasant approximately $362,000 for 2021, which was largely for Lois' salary. By comparison, [Village Administrator Maureen] Murphy is paid $108,000 annually, according to the village budget.
Come to think of it, maybe those dopes in Mount Pleasant don't deserve the state bailout that will likely be requested.

Foxconn continues to be the grift that keeps on giving (away) in this state, and as Rebecca Kleefisch gears up to run for Governor in 2022, she should be tied with a cord of steel to the other scammers who tried to BS Wisconsinites before the last Governor's election 4 years ago.

FUN FACT - All these guys are now out of power!

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