One Wisconsin Now
Press Release

If ‘Ifs’ and ‘Buts’ Are Candies and Nuts We’ll Have Foxconn Deal Paid Off in 2043

Nonpartisan Analysis Finds Gov. Scott Walker’s Foxconn Deal Would At Earliest Pay Back in 2043, Possibly Much Later

By - Aug 9th, 2017 10:09 am
Foxconn chairman Terry Gou and Governor Scott Walker hold a memorandum of understanding. Photo by Jeramey Jannene.

Foxconn chairman Terry Gou and Governor Scott Walker hold a memorandum of understanding. Photo by Jeramey Jannene.

MADISON, Wis. — The nonpartisan Legislative Fiscal Bureau’s analysis of a $3 billion state taxpayer-funded deal proposed by Gov. Scott Walker to lure an electronics factory operated by Taiwanese-based manufacturer Foxconn to Wisconsin would, at best, be a net loser of revenue for nearly three decades. Variables including the percentage of jobs that go to Illinois and other state residents and changing business conditions could delay Wisconsin taxpayers from recouping the billions they are being asked to pay in subsidies for much longer, according to the analysis.

“This confirms the concerns about Scott Walker’s Foxconn scheme being a terrible bet with our tax dollars,” commented One Wisconsin Now Executive Director Scot Ross. “Even the best case, rosiest scenario shows Wisconsin taxpayers losing money on this deal for decades.”

According to the Fiscal Bureau analysis of August 2017 Special Session Assembly Bill 1, proposed legislation implementing a deal negotiated in secret between Gov. Walker’s administration and Foxconn, could start costing taxpayers money almost immediately.

The fiscal impact in the 2017 budget that has still not been passed, despite a July 1 start to the fiscal year, is projected at over $15.6 million. Costs quickly balloon in the 2019 budget to over $522 million, and even with projections of new revenue being generated the net cost will be over $307 million. Over the next 15 years the deal would be a net loser of over $1 billion for state taxpayers.

Based on the rosy projections of Walker’s administration and an analyst hired by Foxconn, the Fiscal Bureau finds Wisconsin wouldn’t recoup its investment for nearly three decades, in the 2042-43 fiscal year. But the analysis warns that date could be significantly delayed based on factors like how many out of state residents are employed at Foxconn and pay taxes elsewhere, changes in markets or changes in manufacturing processes like increased reliance on automation replacing taxpaying workers.

Ross concluded, “If Gov. Walker gets his way, we’ll be writing checks for hundreds of millions to Foxconn in Taiwan to subsidize a single project instead of investing in our public schools, our roads and bridges and small businesses and entrepreneurs across Wisconsin. That’s a bad deal on its face and that at best we won’t make our money back until the mid 2040s doesn’t make it better.”

One Wisconsin Now is a statewide communications network specializing in effective earned media and online organizing to advance progressive leadership and values.

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11 thoughts on “Eyes on Milwaukee: Foxconn Lands in Milwaukee”

  1. Josh says:

    This would be absolutely huge news.

  2. WashCoRepub says:

    Trying not to get my hopes up too much, but this would be such a feather in the cap of Wisconsin, and our mounting ‘jobs Renaissance.’ Great for a community like Racine, and this could also draw people across the border from Northern IL to work as well.

  3. Roulette says:

    Hopefully they won’t need to install safety nets around their buildings to thwart suicides.
    Guardedly optimistic-

  4. tyrell track master says:

    Fundamentally this is great news, but it’s sad to see it be a car-dependent wasteland style development. I’d take half the jobs if this were placed in a legitimate urban environment. But hay, can’t complain if this happens!

  5. sharon pendleton says:

    Tyrell hit it on the nose! Another project to expand “roadway development” etc, that ignores the needs of cities. Car centric America is doomed if we don’t turn this around soon.

  6. Bob says:

    While this appears to be great news just remember that FOXCONN failed to follow through on plans to build a plant in Pennsylvania. If the company actually selects Wisconsin for one of its plants it could also spark the economy in other ways such as increased demand for suicide netting which could benefit Carron Net Company Inc. of Two Rivers Wisconsin!!!

  7. AG says:

    Sharon, reports of “car centric America’s” death are greatly exaggerated.

  8. tyrell track master says:

    Yes, also there are like 10 other states in the running, so I’m afraid this means nothing until it means something…

  9. John says:

    While I understand having issues with the potential ex-urban location that would require driving, my understanding is they require 100+ acres for their plant, and close proximity to the interstate. If Ikea spent years trying to locate a 25-40 acre parcel, I can understand why it would necessitate locating further out from population centers.

  10. @John – IKEA obviously needs to be close to the urban center to be within a short drive of many customers.

    The RFP for Foxconn specifies 1,000 acres, so they’re looking for something roughly similar in size to all of the Menomonee Valley (1,200 acres). So yes, they’re going to end up on the fringe somewhere.

  11. Rich says:

    No modern factory is going to require 50k workers. Get real, robots will make all of the TV panels and there will be 100 people there to fix the robots. Even WashCoRepub will have to admit that this news won’t end up helping his friend Scott too much in the end. Plus, we’ll all vomit when we hear how much WI will give them for the “privilege” of adding those 100 workers…likely an overall net loss and that’s not even counting the exurban location and loss of whatever those 1000 acres are doing now (like state forest or other land reserve — don’t think I’m kidding here either)

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