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?
- State Reviewing Foxconn Jobs Report - Erik Gunn - Jul 23rd, 2020
- Foxconn Hosts Smart Manufacturing Web Conference, Launches iAI Institute - Foxconn Technology Group - Jul 10th, 2020
- Foxconn Will Make 10K Ventilators - Corri Hess - Jun 19th, 2020
- Medtronic and Foxconn Partner to Increase Ventilator Production - Foxconn Technology Group - Jun 18th, 2020
- Foxconn Audit Delayed Two Months - Erik Gunn - Jun 3rd, 2020
- Back in the News: Foxconn’s Profits Plunge By 90% - Bruce Murphy - May 19th, 2020
- Foxconn to Assemble Procedural Masks in Wisconsin for Pandemic Relief - Foxconn Technology Group - Apr 20th, 2020
- Murphy’s Law: Foxconn Squeezes Evers - Bruce Murphy - Apr 15th, 2020
- Foxconn Says It Earned Tax Credits - Corri Hess - Apr 9th, 2020
- Back in the News: Foxconn Plant Will Make Ventilators - Bruce Murphy - Apr 8th, 2020
Read more about Foxconn Facility here
Recent Press Releases by U.S. Rep Mark Pocan