Foxconn Deal Doesn’t Reduce Local Government Risk
Mount Pleasant and Racine County face big debt burden from upfront costs.
The deal, approved last month after more than a year of negotiation, reduces Foxconn’s maximum tax breaks in the state from $2.85 billion to $80 million and significantly reduces the amount of jobs and capital investment Foxconn is required to make.
According to the report, the updated agreement does not introduce new risks to Mount Pleasant or Racine County, where Foxconn’s current facilities are located. It also doesn’t alleviate the existing risks that have contributed to declines in credit quality for both local governments.
In 2019, Moody’s lowered the credit ratings of Mount Pleasant and Racine County because Foxconn failed to meet its targeted job goals.
The separate development agreement between Foxconn, Mount Pleasant and Racine County remains unchanged, because it is not linked to the state’s incentive package and because the local incentives are not tied to job creation targets.
Moody’s points out Mount Pleasant and Racine County carry significant debt burdens associated with upfront costs. Local taxpayers have already spent over a billion dollars on land acquisition, infrastructure and road improvements for the project.
Foxconn must make these minimum tax payments regardless of the project’s completion. If they don’t, the state will cover the debt.
Favorably, over the past two years, Foxconn has paid both its property taxes and special assessments early, Moody’s found.
Report: New Foxconn Deal Does Not Add Risk To State, Local Governments was originally published by Wisconsin Public Radio.
- Foxconn Deal Doesn’t Reduce Local Government Risk - Corri Hess - May 3rd, 2021
- Murphy’s Law: The True Costs of New Foxconn Deal - Bruce Murphy - Apr 28th, 2021
- The State of Politics: All Sides Won On New Foxconn Deal - Steven Walters - Apr 26th, 2021
- New Foxconn Deal Cuts Incentives By $2.77 Billion - Jeramey Jannene - Apr 20th, 2021
- Rep Hintz: Statement on Approval of Revised Foxconn Contract - State Rep. Gordon Hintz - Apr 20th, 2021
- New Foxconn and WEDC Agreement Provides Flexibility and Clarity for Renewed Tech Investments in Science and Technology Park - Foxconn Technology Group - Apr 20th, 2021
- Gov. Evers Announces Renegotiated Foxconn Contract to Save Taxpayers $2.77 Billion - Gov. Tony Evers - Apr 20th, 2021
- Rep. Hintz: Statement on Foxconn Announcement - State Rep. Gordon Hintz - Apr 19th, 2021
- Evers Announces New, Smaller Foxconn Deal - Jeramey Jannene - Apr 19th, 2021
- Gov. Evers, Foxconn Reach New Agreement - Gov. Tony Evers - Apr 19th, 2021
Read more about Foxconn Facility here