Pocan and Doggett Request GAO Investigation into Economic Development Subsidies, Including Foxconn
"Under even the most optimistic assumptions, the state is not expected to break even on the deal until 2043, decades after these officials will have left office."
WASHINGTON, DC – Today, U.S. Representatives Mark Pocan (WI-02) and Lloyd Doggett (TX-35), Ranking Member of the U.S. House Subcommittee on Tax Policy, wrote to the U.S. Government Accountability Office (GAO) to request an investigation on the effectiveness of economic development subsidies, such as those provided to Foxconn Technology Group in Wisconsin. This request comes as the Center for American Progress released a new issue brief on the hidden impacts of these business incentives, including potential downsides often not considered by lawmakers, the press, or the general public.
“As incomes for the many workers have stagnated in recent decades, policymakers have looked to other tools to spur jobs and wages. Economic development has become a top policy priority. This is especially true at the state and local level, where elected officials have become increasingly willing to provide subsidies to incentivize business location or relocation as a means of job creation,” wrote Pocan and Doggett.
“According to the Upjohn Institute, these subsidies have tripled since 1990. For example, in Wisconsin, Governor Scott Walker and the state legislature passed a law that would provide up to $4.5 billion in public funding to subsidize Foxconn, a Taiwanese electronics manufacturer,” continued Pocan and Doggett. “Under even the most optimistic assumptions, the state is not expected to break even on the deal until 2043, decades after these officials will have left office.”
Specifically, Pocan and Doggett are requesting the GAO conduct a review and issue a report on the following questions:
- Are there reliable empirical analyses of the net economic effects of these economic development subsidies? Based on any available evidence of economic development incentives affecting business location decisions, what economic impacts have such incentives generated?
- To what extent have large federal economic development programs been used to provide incentives impacting business location decisions and what evaluations have the federal agencies conducted to determine economic impact? How does the federal government evaluate the effectiveness of economic development policies within the federal agencies? Have such evaluations taken into account the incentives provided by state and local governments in incentive packages provided to businesses?
- What kind of coordination takes place among federal agencies, such as the Departments of Commerce, Agriculture, Housing and Urban Development and the Small Business Administration, and state and local governments?
- Given the apparent expansion of such activities by state and local governments, what actions have federal agencies taken to enforce relocation and other provisions intended to ensure that program purposes are met?
- What improvements can be made to processes at the federal, state and local levels to better understand the effectiveness of economic development programs and to what extent can federal authorities encourage further transparency in economic development?
NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. While it is believed to be reliable, Urban Milwaukee does not guarantee its accuracy or completeness.
More about the Foxconn Facility
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- Microsoft’s Wisconsin Data Center Now A $3.3 Billion Project - Jeramey Jannene - May 8th, 2024
- We Energies Will Spend $335 Million on Microsoft Development - Evan Casey - Mar 6th, 2024
- Foxconn Will Get State Subsidy For 2022 - Joe Schulz - Dec 11th, 2023
- Mount Pleasant Approves Microsoft Deal on Foxconn Land - Evan Casey - Nov 28th, 2023
- Mount Pleasant Deal With Microsoft Has No Public Subsidies - Evan Casey - Nov 14th, 2023
- Microsoft, State Announce Massive Data Center Expansion, Land Purchase - Joe Schulz - Nov 11th, 2023
- Gov. Evers Announces Microsoft Makes Major Investment in Wisconsin - Gov. Tony Evers - Nov 10th, 2023
- State Can’t Regulate We Energies $100 Million Project for Microsoft - Joe Schulz - Sep 20th, 2023
- Foxconn Selling Green Bay, Eau Claire ‘Centers’ - Joe Schulz - Aug 16th, 2023
Read more about Foxconn Facility here