A new report shows it could take at least 25 years for the state to break-even on the $3 billion in tax incentives being used to lure Foxconn to Wisconsin.
The Taiwanese electronics maker wants to build a factory in southeastern Wisconsin, which could eventually employ up to 13,000 people. The company says it will invest nearly $10 billion in the facility, in exchange for an incentive package unveiled just under two weeks ago. An analysis by the state’s non-partisan Legislative Fiscal Bureau shows it would take until at least 2042 before the state sees a return on that investment.
Democratic state Representative Gordon Hintz (D-Oshkosh), who sits on the Legislature’s budget-writing committee, worries that may be a long time to wait, given the state’s limited financial resources. “Even in the best case scenario, the pay-off to the state is not going to be for some time,” he says, noting that many lawmakers currently serving in the Legislature will likely no longer be there when that happens. “I think that complicates the equation,” he argues.
The analysis does note that the state would benefit from increased payroll taxes and other business development that could be sparked by the deal. However, Hintz says the package relies on taxpayers taking 100 percent of the risk. “There’s certainly a lot of unknowns out there,” he argues.
Governor Scott Walker took to Twitter Tuesday afternoon to defend the incentives, which are currently being considered by the Legislature. He noted that it will add over $10.5 billion in payroll to the Wisconsin economy over 15 years, while also creating construction jobs to build the plant and other indirect positions that will help support Foxconn’s operations. “Foxconn for Wisconsin is like when the @packers signed Reggie White – it was transformational,” he tweeted.
— Governor Walker (@GovWalker) August 8, 2017
An Assembly committee could vote on the Foxconn legislation later this week, although the Senate has so far not indicated when it plans to take up the bill.