10 Tough Questions About Foxconn Deal
Why legislators are squirming about whether to vote for it.
It’s crunch time for Wisconsin legislators on Gov. Scott Walker’s deal that would give the high-tech giant Foxconn $3 billion in tax breaks, if it builds a $10-billion manufacturing facility in southeast Wisconsin that could employ up to 13,000 in a few years.
With an Assembly vote on the package – the biggest-ever economic development deal between state government and a business – tentatively scheduled for Thursday, here are 10 questions that make legislators squirm.
1: Will my vote help or hurt me in the next election?
If Foxconn breaks ground on the facility by election day in November 2018, a picture of the construction site, and a total of how many employees the company has by then, might make a good TV ad justifying a vote for the deal. But voting “yes” means trusting a deal negotiated by the Walker and Trump administrations with a Taiwan business tycoon.
If you vote no, and Foxconn breaks ground and starts hiring, imagine the TV ads that will run against your before the election: “Foxconn wanted to help return Wisconsin to manufacturing greatness. [Your name here] said, ‘No’.”
2: What financial legacy do I leave my kids and grandkids?
A state Department of Administration forecast –using the most optimistic estimates – predicted that the “break even” year for the deal won’t be until 2042-43. That’s when all tax breaks given Foxconn will finally be outweighed by increased tax revenues resulting from the company’s investments.
Senate Majority Leader Scott Fitzgerald said the 2042-43 estimate was “striking,” and one reason the Foxconn package didn’t have enough Senate votes to pass last week.
In short, what happens after 15 years?
“They can do whatever they want after that 15-year period,” argues Democratic Rep. Chris Taylor, a member of the Legislature’s Joint Finance Committee.
4: What message does $3-billion plus in tax breaks send to tax-paying corporations?
The bill also includes $12.5 million in tax breaks to Fiserv to encourage it to keep its headquarters in Wisconsin. The $3 billion Foxconn tax break, although paid out over 15 years, totals more than three times the $940 million in corporate income taxes other businesses are expected to pay this year.
5: How long will Foxconn’s plant operate, given the short lifespans of electronic products?
The Foxconn plant in Wisconsin would make liquid crystal displays, but how long will they play a dominant role in high-tech communications? A 28-page summary of the Foxconn deal by the nonpartisan Legislative Fiscal Bureau (LFB) raised that issue: “Technological advances and changes in Foxconn’s market share, operating procedures, or product mix could significantly affect employment and wages at the proposed facility over time.”
After all, weren’t state officials once promised that GM vehicles would “always” be built at the Janesville assembly plant? It closed two days before Christmas 2008.
6: Will there be changes to the bill before Legislators vote?
Will the Assembly Jobs and the Economy Committee recommend changes before Thursday’s vote that make the deal more acceptable? Or will those changes be shot down because Walker and Foxconn warn they could kill the deal?
7: Could – and should – Wisconsin’s Investment Board buy into Foxconn, giving it an equity stake?
“If I’m going to give you money, then I want some ownership,” said Democratic Rep. Jason Fields, who said the deal as written offered Wisconsin only “wishes and prayers.”
The state’s public employees rely on growth in the pension fund overseen by the state investment board for their retirements. Is a Foxconn investment a smart decision to help recoup the taxpayers’ investment or too risky a choice for such a fund?
8: What is the impact on the environment?
Besides exempting a new Foxconn plant from an environmental impact study, what other concessions – for filling in wetlands and diverting Lake Michigan water, for example – are part of the deal?
9: What enforcement does the deal have?
Why does the deal’s fine print say state government “may” – and not “must” – clawback or try to recover past tax breaks, if Foxconn cashes those refundable tax-break checks and then leaves Wisconsin?
10: Can any financial estimates projected as far into the future as 2043 be trusted?
Especially when they come from Foxconn and from Walker loyalists at the state Department of Administration?
“Any cash-flow analysis that covers a period of nearly 30 years must be considered highly speculative,” the LFB analysis warned.
It will be a tough vote. “My Facebook page comments say ‘no’,” one Kenosha County lawmaker says. “But the people I meet on the street want it.”
More about the Foxconn Facility
- Walker picks Foxconn over Wisconsin schools and roads - State Sen. Jennifer Shilling - Sep 18th, 2017
- Governor Walker Signs Wisconn Valley Special Session Bill into Law - Gov. Scott Walker - Sep 18th, 2017
- The State of Politics: Mr. Gou – Your Turn - Steven Walters - Sep 18th, 2017
- Governor Walker Applauds Legislature for Approving Wisconn Valley Special Session Bill - Gov. Scott Walker - Sep 14th, 2017
- Governor Walker Releases Statement on Bipartisan Senate Passage of Wisconn Valley Special Session Legislation - Gov. Scott Walker - Sep 12th, 2017
- WEDC’s Poor Jobs Accountability Record Makes Foxconn Deal a Scandal Waiting to Happen - Citizen Action of Wisconsin - Sep 11th, 2017
- Op Ed: Foxconn Deal Suspends Judicial Rules - Wisconsin Democracy Campaign - Sep 11th, 2017
- GOP Puts $3 Billion Foxconn Thumb on Scales of Justice - One Wisconsin Now - Sep 5th, 2017
- Op Ed: Foxconn Multiplier Overstates New Jobs - William L. Holahan and Charles O. Kroncke - Sep 2nd, 2017
- Walker administration misleads on environmental rollbacks for Foxconn - State Rep. Katrina Shankland - Aug 31st, 2017
- Murphy’s Law: Newest Deal Shows Foxconn Flaws - Bruce Murphy - Aug 29th, 2017
- The State of Politics: Would Democratic Governor Kill Foxconn Deal? - Steven Walters - Aug 28th, 2017
- Op Ed: Illinois Loves Our Foxconn Deal - State Sen. Kathleen Vinehout - Aug 26th, 2017
- Biking: Foxconn, Biking and State Roads - Dave Cieslewicz - Aug 25th, 2017
- Op Ed: Foxconn Should Embrace Green Goals - John Torinus - Aug 24th, 2017
- Washington State Representative Offers Warning for Wisconsin on Foxconn - One Wisconsin Now - Aug 24th, 2017
- Murphy’s Law: Paper Peddles Bogus Foxconn Report - Bruce Murphy - Aug 23rd, 2017
- Representative Lisa Subeck Calls on Joint Finance Committee Co-Chairs to Focus on Budget, Prioritize People over Profits - State Rep. Lisa Subeck - Aug 22nd, 2017
- Governor Walker Highlights Opportunities Foxconn Brings for Wisconsin’s Healthcare Industry - Gov. Scott Walker - Aug 22nd, 2017
- The State of Politics: Foxconn Biggest Deal in State History - Steven Walters - Aug 21st, 2017
- Statewide Online Tool Assists Wisconsin Companies Seeking to Do Business with Foxconn - Gov. Scott Walker - Aug 21st, 2017
- The Senate Must be The Grownups in the Room… Again. - State Sen. Tim Carpenter - Aug 21st, 2017
- Op Ed: The Many Broken Promises of Foxconn - State Rep. David Bowen - Aug 20th, 2017
- Rep. Goyke Statement on Foxconn Special Session Bill - State Rep. Evan Goyke - Aug 18th, 2017
- Wisconsin Budget: Foxconn Could Take Till 2058 To Pay Off - Jon Peacock - Aug 18th, 2017
- Governor Walker Releases Statement on Bipartisan Assembly Passage of Wisconn Valley Special Session Legislation - Gov. Scott Walker - Aug 18th, 2017
- Republican Agenda Puts Corporate Welfare Package for Taiwanese Company Ahead of our Public Schools - State Rep. Dianne Hesselbein - Aug 17th, 2017
- Rep. Sinicki Votes No on Foxconn Package - State Rep. Christine Sinicki - Aug 17th, 2017
- Statement from Rep. Barca on the Assembly Passage of Foxconn Bill - State Rep. Peter Barca - Aug 17th, 2017
- Facts on Foxconn Trump Proponents’ Protestations Deal Would Benefit Wisconsin - One Wisconsin Now - Aug 17th, 2017
- Foxconn Debate Cheat Sheet - State Rep. Gordon Hintz - Aug 17th, 2017
- $3 Billion Foxconn Boondoggle Sells Out Wisconsin’s Future to Foreign Corporation - State Rep. Lisa Subeck - Aug 17th, 2017
- Op Ed: How to Get a Better Deal From Foxconn - John Torinus - Aug 17th, 2017
- Data Wonk: Will Foxconn Deal Fight Poverty? - Bruce Thompson - Aug 16th, 2017
- Governor Walker Moderates Foxconn Roundtable Discussion in Green Bay - Gov. Scott Walker - Aug 16th, 2017
- Op Ed: Where Will Foxconn Find Workers? - State Rep. Gordon Hintz - Aug 16th, 2017
- Vukmir: The time is now for Foxconn - Assistant Majority Leader Leah Vukmir - Aug 15th, 2017
- Foxconn tax break could exceed $1 million per job - State Sen. Jennifer Shilling - Aug 14th, 2017
- Paul Ryan Challenger Opposes $3 Billion Corporate Handout to Foxconn - Cathy Myers - Aug 14th, 2017
- The State of Politics: 10 Tough Questions About Foxconn Deal - Steven Walters - Aug 14th, 2017
- Dana Wachs Announces Opposition to Foxconn Package - State Rep. Dana Wachs - Aug 13th, 2017
- Campaign Cash: Did Foxconn Lobby Illegally? - Wisconsin Democracy Campaign - Aug 12th, 2017
- Statement from Rep. Barca Regarding Republican Amendment to Foxconn Bill - State Rep. Peter Barca - Aug 11th, 2017
- Statement: Amendment to Special Session Assembly Bill 1 - Wisconsin Assembly Speaker Robin Vos - Aug 11th, 2017
- Op Ed: Renegotiate the Foxconn Deal - Matthew Flynn - Aug 11th, 2017
- Murphy’s Law: Walker’s Desperate Deal With Foxconn - Bruce Murphy - Aug 10th, 2017
- Foxconn Deal Flounders in State Legislature - One Wisconsin Now - Aug 10th, 2017
- If ‘Ifs’ and ‘Buts’ Are Candies and Nuts We’ll Have Foxconn Deal Paid Off in 2043 - One Wisconsin Now - Aug 9th, 2017
- Rep. Shankland: Statement on Foxconn Analysis - State Rep. Katrina Shankland - Aug 8th, 2017
- Foxconn Fiscal Analysis Deeply Troubling for Wisconsin Taxpayers - State Rep. David Crowley - Aug 8th, 2017
- Statement from Rep. Barca on New Fiscal Analysis of Proposed Foxconn Deal - State Rep. Peter Barca - Aug 8th, 2017
- Rep. Hintz Statement on Foxconn Cost to Taxpayers - State Rep. Gordon Hintz - Aug 8th, 2017
- Campaign Cash: Bill Has $10 Million Giveaway to Fiserv - Wisconsin Democracy Campaign - Aug 8th, 2017
- Wisconsin Veterans Chamber of Commerce Calls For Foxconn Project to Include Disabled Veteran Owned Businesses - Wisconsin Veterans Chamber of Commerce - Aug 7th, 2017
- Wisconsin Budget: The High Cost of Foxconn - Jon Peacock - Aug 4th, 2017
- What Does the Foxconn CEO Say About His Employees? - One Wisconsin Now - Aug 4th, 2017
- Foxconn Hearing: Big Promises, Little Details, Lacks Transportation Plan - State Rep. David Crowley - Aug 3rd, 2017
- One Wisconsin Now Testimony on Foxconn Subsidy Legislation - One Wisconsin Now - Aug 3rd, 2017
- No Guarantees to Prevent Wisconsin Tax Dollars From Subsidizing Illinois Jobs in Foxconn Deal - One Wisconsin Now - Aug 2nd, 2017
- Unnecessary to Sacrifice Natural Resources for Foxconn - Wisconsin League of Conservation Voters - Jul 31st, 2017
- Statement from Rep. Barca on Foxconn Developments - State Rep. Peter Barca - Jul 28th, 2017
- The Contrarian: Walker’s Reelection Now A Certainty - George Mitchell - Jul 28th, 2017
- Eyes on Milwaukee: Foxconn Loves Wisconsin, Walker - Jeramey Jannene - Jul 27th, 2017
- Governor Walker, Foxconn Founder and CEO Terry Gou Sign Memorandum of Understanding in Milwaukee - Gov. Scott Walker - Jul 27th, 2017
- REALTORS® Welcome Foxconn - Greater Milwaukee Association of REALTORS® - Jul 27th, 2017
- MATC Statement on Foxconn - Milwaukee Area Technical College - Jul 26th, 2017
- Statement from Rep. Barca on Foxconn Economic Development Announcement - State Rep. Peter Barca - Jul 26th, 2017
- Milwaukee County Executive Chris Abele Statement on Foxconn Announcement - County Executive Chris Abele - Jul 26th, 2017
- Global High-Tech Manufacturer Foxconn Announces $10 Billion Investment, Will Create 13,000 Jobs in New Wisconsin Campus - Gov. Scott Walker - Jul 26th, 2017
- Foxconn Frenzy: Proceed with Caution - State Sen. Chris Larson - Jul 26th, 2017
- Shilling cautious on Foxconn announcement - State Sen. Jennifer Shilling - Jul 26th, 2017
- Op Ed: Loss of Talgo Train Hurts Foxconn Deal - James Rowen - Jul 20th, 2017
- Mayor Barrett Supports Siting Foxconn Facility in Southeastern Wisconsin - Mayor Tom Barrett - Jul 17th, 2017
- On the Air: How Likely Is It Foxconn Will Create 10,000 Jobs? - Urban Milwaukee - Jul 13th, 2017
- Murphy’s Law: Walker Building Yesterday’s Economy - Bruce Murphy - Jul 13th, 2017
- Eyes on Milwaukee: Foxconn Lands in Milwaukee - Jeramey Jannene - Jul 10th, 2017