The State Assembly on Thursday passed a $3 billion incentive package for electronics manufacturer Foxconn to build its first U.S. plant in Wisconsin on the promise that the deal will bring up to 13,000 jobs to a part of the state that has seen its manufacturing industry decimated.
Lawmakers passed the legislation authored by Gov. Scott Walker 59-30, after the chamber’s Republicans cheered it as a smart bet for taxpayers with massive upside for the state’s economy and over Democrats’ criticism that the deal is a gigantic gamble with state funds.
The legislation drew “no” votes from two Republicans and “yes” votes from Democrats who represent southeastern Wisconsin where Foxconn wants to build — including Rep. Cory Mason, who is running for mayor of Racine.
Mason, D-Racine, said he has serious concerns with the bill, but that the promise of returning jobs to an area that has lost about 12,000 in 25 years convinced him to get behind the proposal.
“It is harder and harder for Americans to make it if America doesn’t make anything the way they used to,” he said. “This is not an easy vote for me. There are things about this bill that I don’t like ... but for me, for the good jobs that this represents for in Racine ... my vote is green.”
Rep. Tod Ohnstad, D-Kenosha, also supported the bill, calling it “the biggest opportunity for Kenosha since the automobile industry.”
But most Democrats voted against the bill, saying it hadn’t been vetted and required too much money from taxpayers.
Assembly Speaker Robin Vos, R-Rochester, told reporters that Assembly Republicans did everything possible to win Democrats’ support for the measure, but Assembly Minority Leader Peter Barca, D-Kenosha, disputed that — saying he “never got that call” to work with Republicans on the package.
Barca proposed moving the bill to a committee tasked with approving financial measures and writing the state’s budget, but Republicans rejected the motion.
Barca, who represents the area in which Foxconn is eyeing to build, argued that “we can come back on a better, stronger deal for the taxpayers, the workers, the small businesses and will protect the environment.”
Even so, Barca ended up supporting the bill.
“When my father immigrated to the United States and settled our family in Kenosha, it was a factory job that gave him the chance to eventually buy his own business and achieve the American dream. But as time passed, manufacturing left my hometown and communities all across Wisconsin,” Barca said in a statement. “If we can create new good-paying, family-supporting jobs in a high-tech industry, it could give future generations the same opportunities my family had.”
The bill now heads to the state Senate, where Senate Republicans have yet to vote on their version of the bill and are pursuing it on a different track.
Senate President Roger Roth, R-Appleton, told WTAQ on Monday that the Assembly’s action on the bill is “largely irrelevant” because the legislation must go through the Legislature’s budget-writing committee, which could make changes to the package requiring another Assembly vote.
The first step
The Assembly’s action is the first vote by one the state Legislature’s houses to advance a project proposed by Walker and Foxconn chairman Terry Gou that would bring up to 13,000 jobs to a campus the Taiwanese company wants to build in southeastern Wisconsin. Gou has agreed to spend up to $10 billion on the facility that Walker has dubbed “Wisconn Valley.”
But to make the plan a reality, Walker has proposed to give Foxconn $2.85 billion in refundable tax credits for jobs and for the construction of the campus. The company would be exempt from another $150 million in sales taxes, be eligible for lower utility rates and be exempt from some environmental regulations.
Republican and Democratic lawmakers in the Assembly debated the package for hours Thursday, with Republicans urging their counterparts to consider the economic impact statewide — with tens of thousands of jobs projected to be created at the Foxconn plant and with suppliers.
“It’s a field of American dreams,” Vos said.
But two of Vos’ members — Rep. Adam Jarchow, R-Balsam Lake, and Rep. Todd Novak, R-Dodgeville, opposed the measure.
“My constituents want to be assured that these jobs actually will happen,” Novak said in a statement. “They want to be confident that we’re making a sound investment with taxpayer dollars. They want a guarantee, a time table for making it happen. Without it, I worry about whether this is the best deal for Wisconsin.”
And Democrats contended there is not enough information about where the money to fund the incentive package will come from. A nonpartisan analysis released last week showed it would cost $1 billion annually and the state would not begin to break even on the deal until 2043.
“Where is this money coming from? Can anyone tell me? What are you not going to fund?” said Rep. Chris Taylor, D-Madison.
Before the vote, Vos waved off those concerns. He told reporters that all big economic development projects have “naysayers.”
“It is a good deal for the taxpayer. It’s no different than how we’ve done economic development in Wisconsin for other companies,” Vos said. “Once in a while, I think it’s worth it for us to take that kind of big leap.”
Both sides speaking out
Foxconn has said it’s looking to build the campus to manufacture liquid crystal display panels, which initially would employ 3,000 and, over time, as many as 13,000. The company has not said where it will locate but reportedly has investigated sites south of Milwaukee, in Racine and Kenosha counties.
Reps. Shannon Zimmerman, R-River Falls, and Mary Felzkowski, R-Irma, said the project would benefit all of Wisconsin.
“There’s a ripple effect,” Zimmerman said. “The implications of a Foxconn to the broader Wisconsin economic environment are profound.”
But Rep. Gordon Hintz, D-Oshkosh, who also is considering running for governor, said the Foxconn legislation is an ill-conceived proposal from a desperate governor who has been a “colossal failure” at creating jobs.
“If you go with the reality with Gov. Walker and Foxconn’s over-promise and under-perform, it’s not likely to happen,” he said, referring to Walker’s first-term, unfulfilled promise to create 250,000 jobs and Foxconn’s previously announced plans to build a plant in Pennsylvania that never materialized.
Also on Thursday, Taylor released an analysis completed by the Baker Tilly accounting firm in July that showed the Foxconn project would create about 8,200 jobs at the Foxconn plant — contrary to the 13,000 Walker has touted since announcing the project — raising questions about what size facility will be built.
But Mark Maley, spokesman for the Wisconsin Economic Development Corp. jobs agency, said during negotiations with Foxconn the “size and scope of the project and the number of employees evolved during the discussions with the company,” prompting a revised analysis that reported 13,000 jobs projected at the plant.
“There’s a ripple effect. The implications of a Foxconn to the broader Wisconsin economic environment are profound.” Rep. Shannon Zimmerman, R-River Falls