Jul 31

Foxconn special session starts Tuesday amid growing pushback

Governor Walker on Friday called for a special session starting Tuesday on tax breaks and other incentives to bring a massive Foxconn plant to Wisconsin. The governor introduced a bill on Friday to implement the Foxconn Memo of Understanding that lays out expectations for the Taiwanese electronics maker to create up to 13,000 jobs over six years and for the state to provide up to $3 billion in incentives. The plant will be built in the Racine-Kenosha I-94 corridor.

Insiders say this will move fast, evidenced by GOP leaders calling for a public hearing already this week, with a done deal expected by late August.

Meanwhile, Democrats and others are raising questions about the deal.

In an op-ed in UrbanMilwaukee.com, Rep. Jonathan Brostoff of Milwaukee questioned whether $3 billion in state money and incentives could be spent in other ways to boost the state’s economy and improve our quality of life.

“If we are willing to spend billions of taxpayer dollars then let’s employ Wisconsin workers, fix every pothole in our state, hire community connectors and park staff, invest in renewable energy infrastructure, fully fund our world class university system, hire teachers for our schools, and invest in the success of small businesses across our state,” Brostoff writes.

Rep. Dave Hansen of Green Bay wrote in the newiprogressive.com that the state should be extremely cautious in any use of taxpayer dollars to lure Foxxconn to the state, citing concerns that new technologies could eliminate any promised jobs.

“Given recent accounts of how its workers are treated and Foxxconn’s strategy of getting every last nickel and dime it can from taxpayers to lower their costs, Governor Walker and any legislator thinking of supporting what could be a $3 billion incentive package should be very wary,” Hansen writes. “To do otherwise would be a serious case of legislative malpractice.”

By the way, the deal waives all environmental regulations and permits.

In a column on FastCompany.com, Greg LeRoy, executive director of Good Jobs First and author of The Great American Jobs Scam, says the Foxconn deal “exemplifies everything that’s wrong with our nation’s economic development system.”

“Even if the project creates all 13,000 jobs the politicians said it potentially could – and I find that absolutely not credible given how automated high-tech manufacturing has become – that means a cost of more than $230,000 per job,” LeRoy writes. “At that price, the deal is a sure loser for Wisconsin taxpayers. That’s because there is no way the typical Foxconn worker will pay $230,000 more in state and local taxes than she and her family will consume in public services over her work time there. At that price, the deal can only be accurately described as a transfer of wealth from Wisconsin taxpayers to Foxconn shareholders.”

Others have questioned whether Foxconn can be trusted to follow through on its promises, noting that it backed out of a major deal in Pennsylvania. Advocacy group One Wisconsin Now cautions that Foxconn “has a long history of over-promising and under-delivering on their claims of investments and job creation.”

“For example,” OWN says, “Pennsylvania is still waiting on hundreds of promised jobs created at a $30 million facility announced in 2013 that has yet to materialize. Are they really preparing to invest such huge sums in Wisconsin and create well paying jobs when they are lowering costs in factories in China by replacing workers making less than $4 per hour with robots?”