A $100 million taxpayer-funded effort to keep hundreds of manufacturing jobs in the Fox Valley still doesn't have a clear path forward in the state Senate, a top Republican lawmaker who backs the bill said Wednesday.
But if the bill passes, Kimberly-Clark executives said they will not only keep jobs in Wisconsin, but will invest up to $500 million and hire up to 52 new employees at the company's Cold Spring plant, which manufactures hygiene products including Depend undergarments and Kotex pads.
Lawmakers, state economic development officials, union representatives and Kimberly-Clark executives testified before the Legislature's Joint Finance Committee, making the case for the state Senate to approve an incentive package designed to keep Kimberly-Clark from closing its Cold Spring facility in Fox Crossing, which currently employs just shy of 400 people.
"This is important not just because of the high number of family-supporting union jobs that are at stake," said Senate President Roger Roth, R-Appleton, but also because of a greater economic impact stemming from a supply chain that encompasses 230 businesses throughout the state of Wisconsin.
But Roth conceded that the votes to pass the incentive package are "not there right now." And state Sen. Jon Erpenbach, D-Middleton, said Republicans — who currently hold a 18-15 majority in the chamber but lack the votes to pass the bill on their own — have not brought Democrats into the fold to help consider and shape the legislation.
"You talk about wanting Democrats at the table," Erpenbach said. "We don’t even know where the table is."
Senate Majority Leader Scott Fitzgerald, R-Juneau, said last week that if the bill has bipartisan support, the Senate could vote on it later this month.
Gov. Scott Walker called on the Legislature to pass legislation offering tax breaks similar to the ones authorized under the state's $3 billion deal with Foxconn when Kimberly-Clark announced early this year that it would cut as many as 5,000 jobs and shutter 10 plants globally to save up to $550 million.
The Assembly passed the bill with a 56-37 vote in February, but it never made it to the Senate floor.
Under the deal, Kimberly-Clark would be eligible for tax credits of 17 percent of wages for jobs created and retained and 15 percent of capital expenditure investments. The company would also be given a sales and use tax exemption for building materials, supplies and equipment. To remain eligible for the tax breaks, the company would have to retain 93 percent of its full-time employees in Fox Crossing and 93 percent of its employees throughout the state — estimated at about 2,700.
Sen. Luther Olsen, R-Ripon, said he's concerned with the precedent the deal could set for other companies who see the incentives offered to Foxconn and Kimberly-Clark.
"This is setting the stage for the state of Wisconsin," Olsen said, noting that companies like Kimberly-Clark have essentially had their corporate income tax liability erased thanks to existing tax credits for manufacturers. "That isn't enough — now we have to pay them to stay here."
If the deal is approved, Kimberly-Clark Vice President of Global Manufacturing John Deitrich said it would allow the company to retain 388 jobs with an annual payroll of nearly $30 million, add up to 52 new jobs, invest up to $500 million in the facility over the next 15 years and continue to support more than 230 Wisconsin businesses that are part of the company's supply chain.
Cold Spring plant manager Paul Lombardi said the incentives from the state would allow the facility to increase production by almost 40 percent. The market for adult incontinence products is currently about $2 billion per year and is growing at a rate "in the mid-single digits."
"This is a work family, this is a community, and these are people trying to make a difference in their lives with family-supporting jobs, and in turn improving the communities in which we live," said David Breckheimer, president of United Steelworkers Local 2-482 at the Cold Spring facility.
If Kimberly-Clark does not close the Cold Spring plant, it will shutter a similar facility in Arkansas. Cold Spring had originally made the closure list because it's one of the company's higher-cost facilities, Deitrich said. The company's savings if it closes the Cold Spring plant instead of the Arkansas plant would be "very significant," Deitrich said.
The company did not ask for incentives from the state, Deitrich said, but when they were offered, "it changed the game." The company is not interested in a bidding war between Wisconsin and Arkansas, he said.
If the incentive package is not approved, Deitrich said, Kimberly-Clark will be back to its original plan.
"We will finalize our decision after we know the decision from the state," he said.
A smaller plant in Neenah, with about 100 employees, will almost certainly be closed regardless of whether the incentive package passes.
Because the original bill passed by the Assembly includes language relating to both the Neenah and Fox Crossing plants, the bill would likely have to be amended or adjusted with Walker's line-item veto authority.
Asked about potential changes last month, Walker said some technical fixes might be needed, but said he would not make any changes without agreement from Kimberly-Clark management and union leadership.
If the bill passes, it is likely to go to Walker for a signature before the end of his term. Gov.-elect Tony Evers did not say whether he would sign the bill if it were to come to his desk.
“The workers and families of Kimberly-Clark have to be our top priority and they deserved a solution on this issue months ago," Evers spokeswoman Britt Cudaback said in a staetment. "Governor-Elect Evers supports finding a long-term, industry-wide solution to the challenges facing the paper industry like Senator Hansen’s Papermaker Fund Bill that supports workers and families in the paper product manufacturing industry across Wisconsin."
Cudaback was referring to a bill introduced by Sen. Dave Hansen, D-Green Bay; Assembly Minority Leader Gordon Hintz, D-Oshkosh; and Rep. Amanda Stuck, D-Appleton, who have requested $60 million to fund two revolving loan programs that would improve Fox Valley paper mills' energy and water efficiency and help them transition to making brown paper products.
This story has been updated to correctly note the partisan balance in the Senate which is currently a 18-15 Republican majority. When the new legislative session starts in January, Republicans will hold a 19-14 majority.