Assembly Committee Advances Foxconn Incentives Package

Aug 14, 2017

Foxconn’s plans to build a huge LCD screen manufacturing facility in southeastern Wisconsin are another step closer to reality. On Monday, an Assembly committee voted in favor of a $3 billion tax incentives package to lure the company here.

Gov. Walker and fellow Republicans are pushing for the deal. Democrats on the committee pushed for nearly two dozen amendments in an effort to soften the burden on taxpayers. But, all of them failed.

Foxconn plans to build a 20 million square foot facility in either Racine or Kenosha County. It would be the Taiwanese company’s first major manufacturing facility in the U.S. Foxconn says it initially plans to hire 3,000 people, but could eventually employ up to 13,000 workers.

The Republican-backed bill state lawmakers are considering would give the company financial incentives, and suspend state environmental regulations in order to speed construction of the plant.

Democrats who are critical of the plan floated 23 additions to the measure on Monday. One would have encouraged the company to hire at least 70 percent of its workforce from Wisconsin. State Rep. Tod Ohnstad of Kenosha supported the idea.

“I think it is of great concern that we are giving Wisconsin tax credits to people who might drive over the border, live in Illinois and not pay taxes in Wisconsin,” Ohnstad said.

But an attorney for the non-partisan Legislative Council cast doubt on the plan. Larry Konopacki said such a measure might be unconstitutional.

“Courts will view these kinds of preferences as being very suspect. They are very critical of these kinds of provisions,” he said.

The motion failed on a party line vote. Another amendment Democrats introduced would have established a Regional Transit Authority so workers who live further away,would have a way of getting to their jobs at Foxconn. Milwaukee state Rep. David Crowley urged lawmakers to support the measure.

“If we are going to focus on those who are unemployed and underemployed, especially like those who live in my district, a regional transit authority would be essential and transformational,” he said.

Republican Joan Ballweg spoke out against the amendment. She said state and local authorities can work out transportation plans at a later date.

“In the public hearing, we heard some of the local folks talk about how they are just beginning a discussion of how they can partner between their counties, Racine, Kenosha, Milwaukee, to take a look at how they do this. I think we’re going to have to wait until the locals decide what their process is going to be,” Ballweg said.

The panel also rejected that amendment, and every other one that Democrats proposed. Then, it was time to vote on the overall bill. Republican Bob Kulp of Stratford said the Foxconn deal is a once-in-a-lifetime opportunity.

“This is a completely new industry with a worldwide market with a company that is flexible and innovative. It doesn’t have any peers, competitors or equals. This is an investment that makes sense and we cannot look the other way and let this go by,” he said.

Yet, Milwaukee Democrat Jason Fields warned colleagues the investment is too risky.

“There is no way in the world that you guys can tell me that this is the greatest deal out there. It has way too many loopholes and too many uncertainties for us to sit here and sign off $3 billion,” he said.

The committee approved the bill 8-5, along party lines. The measure heads next to the full Assembly, which is expected to vote on the incentives package on Thursday.

ON THE ENVIRONMENTAL FRONT
Swamp milkweed
Credit A Thompson

Democrats concerned about the environmental impact of the Foxconn bill have been pushing for a number of changes to the incentives package.

GOP Committee chair Adam Neylon said he took those concerns into consideration, as Republicans amended the bill.

"I think that we have gone back and worked to improve every single one of those bullet points, things like changes to the wetland language," Neylon said.

His revised bill requires that if Foxconn impacts a wetland in the process of building or operating its factory, the DNR must try to find a way to mitigate for that impact within the same watershed, instead of somewhere else in the state.

Rep Tod Ohnstad, a Democrat, acknowledged the change to the wetland clause was a step in the right direction, but said he still a list of concerns. He tried addressing them through a series of amendments during Monday’s meeting.

Ohnstad represents Kenosha.  Foxconn is considering it or neighboring Racine County as possible factory sites.  The legislator wanted to require a study of the short and longterm impacts of the Foxconn operation – through a process called an Environmental Impact Statement.

Ohnstad also suggested Foxconn be required to establish an environmental mitigation fund, saying taxpayers should not bear the financial burden if the Taiwanese company one day leaves a blighted brownfield behind.

"I think that it is unbelievably important that we set aside some money in the event that remediation becomes necessary.  I think that your constituents are a lot like our constituents and that the environmental impacts are certainly important ours as well as yours," he said.

Rep  Amanda Stuck – a Democrat representing Appleton - ran down a checklist of selling points she thought might convince Republicans to agree to Ohnstad’s environmental protections.

"When they have a healthy environment, workers are going to be healthier and more productive.  Noboby wants to live and work in communities that are polluted and disgusting. Also tourism is huge in our state – if we sell off our environment to the highest bidder to come in, that’s not going to work and hurt our economy in the long run," Stuck said.

But Republican Rep Shannon Zimmerman of River Falls said the proposed Foxconn plant is a good business deal for the state -- and good business deals require both incentives and compromise.

"We can look at potential negative implications to the environment.  We talked during public hearing about that.  That mattered to me a lot as well.  I don’t want to see our waterways compromised.  Good work has been done on a bipartisan basis to see that we would resolve those issues," Zimmerman added, "Maybe not perfectly.  But show the ideal, the perfect deal.  It doesn’t exist because there is risk. We talked about risk."

Republican committee members rejected all of the Democrats proposed changes.