The Proposed Foxconn Deal

Governor Walker has proposed awarding Foxconn an economic package of up to $3 billion in state money over 15 years, in exchange for Foxconn spending $10 billion to construct a facility in Wisconsin and create up to 13,000 jobs. Depending on the assumptions used, the cost per new job created could range from $219,000 to $587,000. The deal could result in the state sending checks to Foxconn for more than $300 million a year, for some years in the timeframe for which the agreement is in effect.

Our Analyses

Five Reasons the Foxconn Deal Would be Bad for Wisconsin (August 21, 2017)

The Significant Risk of Never Breaking Even on Foxconn Subsidies (August 17, 2017): Foxconn has said that the new plant it wants to build in southeast Wisconsin could employ between 3,000 and 13,000 workers. Whether the number of employees is ultimately at the top of that range or far lower will dictate how much the proposed subsidies would cost Wisconsin taxpayers per job and how long it would take our state to break even on the new tax credits.

Graphic: State’s Breakeven Point for Foxconn Deal Could be Far Longer than 25 Years, Depending on Assumptions (August 16, 2017)

Under Deal, State Could Reward Foxconn for Creating Jobs that Pay Near-Poverty Wages (August 10, 2017): With the state offering enormous subsidies to lure Foxconn to Wisconsin, lawmakers should at the very minimum build in requirements that the new jobs pay family-supporting wages. But the $3 billion proposed deal could result in the state cutting checks to Foxconn to pay for the creation of new jobs that pay as little as little as $23,000 per year, an income level that would put a family of four below the poverty line. (Note: The version of the bill that was approved by the Assembly on August 17, 2017, subsidizes jobs that pay at least $30,000 a year.)

Foxconn Deal Keeps Looking Worse (August 9, 2017): The massive subsides for Foxconn proposed by the Governor keep looking worse as we learn more. The most recent sobering information came this week when the Legislative Fiscal Bureau (LFB) issued a new analysis of the proposed subsidies.

Different Assumptions about Foxconn Job Creation Yield Much Higher Estimates of the Cost of Jobs (August 3, 2017): The cost of the proposed new tax credits for the tentative deal with Foxconn could be far larger per job created than some people have suggested.  Those costs will vary greatly depending on the ratio of spending for payroll versus the capital expenditures.  The more that Foxconn invests in its facilities and state-of-the-art automation, rather than employees, the more the proposed deal will cost state taxpayers per job created.

Reviewing the Foxconn Costs and Risks (without the Rose-Colored Glasses) (August 2, 2017): The cost of the proposed new tax credits for the tentative deal with Foxconn could be far larger per job created than some people have suggested. Those costs will vary greatly depending on the ratio of spending for payroll versus the capital expenditures.

Media and Editorials

Foxconn May be Biggest Swindle in Wisconsin History (August 12, 2017): Robert Kraig in The Cap Times says there is “very good reason to doubt that Foxconn will be held accountable for creating the jobs it is promising.”

Questions Emerge over What Wisconsin Must Give for Foxconn Plant (August 10, 2017): The New York Times describes how local residents have been “blindsided by the way the deal is happening — at lightning speed, with relatively little input from the public and a promise from Governor Walker that Foxconn can bypass certain regulations protecting the environment.”

Foxconn’s Wisconsin Plan Raises Skepticism as Well as Hope (August 11, 2017): The Milwaukee Journal Sentinel says that “the magnitude of Foxconn Technology Group’s proposal for a $10 billion electronics factory in southeast Wisconsin is matched by the gravity of the questions it has raised.”

 

Environmental Issues

Unnecessary to Sacrifice Natural Resources to Foxconn (July 31, 2017): Building economic growth while protecting public health is possible, says the League of Conservation Voters.

Wisconsin Foxconn Deal Waves Environmental Regulations (July 28, 2017): Wisconsin Public Radio notes that “the exemptions to environmental laws would be sweeping for the company, letting it escape state permits for everything from filling a wetland to building on a lakebed.”

Environmentalists Criticize Exemptions for Foxconn’s $10 Billion Wisconsin Plant (August 1, 2017): “The measures proposed by the Walker administration exempt the company from state wetlands regulations and an extensive environmental analysis that some other large projects are subject to,” the Milwaukee Journal Sentinel notes.