Wisconsin Lawmakers Vote To Pay Foxconn $3 Billion To Get New Factory (arstechnica.com)

An anonymous reader quotes a report from Ars Technica: The Wisconsin Assembly voted 59-30 on Thursday to approve a bill to give incentives worth $3 billion to Taiwan-based Foxconn so that the company would open its first U.S. plant in the state. Foxconn, best known for supplying parts of Apple's iPhones, will open the $10 billion liquid-crystal display plant in 2020, according to Reuters. The bill still has to be approved by a joint finance committee and the state Senate. Both houses of Wisconsin's legislature are controlled by Republicans, and the deal is supported by Wisconsin Governor Scott Walker, a Republican who negotiated the deal. The vote was largely, but not entirely, along party lines. Three Democrats joined 56 Republicans in supporting the deal. Two Republicans and 28 Democrats voted against it. Opponents said the deal wasn't a good use of taxpayer funds. The $3 billion incentives package includes about $2.85 billion in cash payments from taxpayers and tax breaks valued at about $150 million. The state is also waiving certain environmental rules.

Comments

That ain't hay

[PopeRatzo]

The $3 billion incentives package includes about $2.85 billion in cash payments from taxpayers and tax breaks valued at about $150 million. The state is also waiving certain environmental rules.

Get that? "Cash payments". Not tax cuts. Straight up baksheesh.

We were told how GOP government in Wisconsin was going to create this great economic boom by "unleashing" the free market. Now they're just trying to prop up a Potemkin president by using corporate welfare.

Re:That ain't hay

[Kneo24]

I went to the Reuters version for more clarity.

which would award Foxconn $3 billion over 15 years in mostly cash incentives.

This only holds true if they end up creating 13k jobs. Otherwise they get about 1.35 billion according to the Ars Technica article.. It's still a tough pill to swallow considering that job creation numbers from this deal are all over the place and it's quite difficult to see how much income tax revenue is generated from this. We also have to consider how much sales tax revenue will be generated from people having jobs, and how many other businesses in the area will be created from people having more money to spend.

It's all really speculative at this point and those large numbers seem damning due to the amount of unknowns. I don't disagree it looks bad.

Re:That ain't hay

[Threni]

The US government does this all the time. Talk badly about "socialism" when the topic is poor people, healthcare etc, but take money from those people to pay billionaires and wealthy corporations and banks so that they can continue to profit.

Re:That ain't hay

[swb]

The math is crazy. They could pay 13,000 people $15,384 per year for 15 years for $3 billion. Which I know doesn't make any sense, especially considering the $3 billion in cash isn't a pre-existing sum and probably represents some kind of long term payroll tax refund, which is why its tied to the employment and projected wage numbers.

You would think, though, that if they were willing to lay out that kind of money as an incentive it would be better in some kind of startup fund or small business capital expansion program. The same $3 billion could provide $1 million per year to 207 small businesses or startups for 15 years.

The latter seems like it would be more likely to create a stronger and more diverse economy, especially if the money helps grow established small businesses.

Re:Suckers.

[rmdingler]

FTA:

Democratic opponents of the deal have pointed out that paying $3 billion to get 3,000 jobs means the state subsidy amounts to around $1 million per job.

That is just north of $66K for each of the projected 3000 jobs for the nrext 15 years. The jobs are reported to average just over $53K in salary. The full value ($3 billion) only kicks in if Foxconn eventually employs 13,000 workers, but:

Even if the plant never expands beyond 3,000 jobs, though, Foxconn will get $1.35 billion for building the plant. Assuming even the beginning stages of the deal come together, Wisconsin will be paying $500,000 worth of incentives per job.

Re:Suckers.

[MoarSauce123]

I think they target 30 years. Too bad that the factory will close within 10 years. Foxconn already preps for that claiming that there is not enough skilled labor in that region. So why the heck build a factory there? Ah yes, they get to keep all the government handouts.

And the rest of us are paying for it

[drinkypoo]

Wisconsin is already spending other states' tax money, because it cannot keep itself afloat. Now it's going to hand that money to China.

Re:And the rest of us are paying for it

[Anonymous Coward]

Taiwan != China

"The Party of Fiscal Responsibility"

[Jahoda]

Anyone else remember when Republicans were "The Party of Fiscal Responsibility"?

I guess I just don't understand where making 2.5 billion dollars in cash payments to a foreign company is fiscally responsible.

But what do I know, I'm just another dumb ass liberal.

so many questions

[clovis]

this has a very long payback, and my first question is, why would we think that a factory making a single electronic component would have any use ten, fifteen, or twenty years from now? What is the plan, or could it even be repurposed if the technology changes, I.e. OLED screens vs LED screens.

Are we looking at another Solyndra?
Does this project have the smell of wrongness that followed the Pfizer at New London project from the beginning?

Solid Business Plan

[boudie2]

What company wouldn't want to build a billion dollar high tech factory in a state where people walk around with blocks of cheese on their heads?

Re:Suckers.

[Gavagai80]

If your state is facing such desperate unemployment levels that you have to pay the full salaries of Foxconn's employees for decades to create the jobs... then why not just hire people into government jobs where the public reaps the benefits of the work? Create the nation's shortest DMV lines, fully-staffed parks, cleanest sidewalks, etc. Doing so might actually bring in more employers.

Re:What happened to ...

[Gavagai80]

Democrats -- though plenty corrupt themselves -- very consistently show a less extreme desire to turn government into nothing but way of funneling money to companies. Some of their spending is on things the public actually gets to own and reap the rewards of, rather than spending tax dollars purely to privatize the profits to companies.

Just because both groups are bad does not mean there's an equivalence. It's easy to see the differences, and easy to see that it doesn't entirely boil down to opposing each other "just because".

Re: Suckers.

[Kneo24]

I stand corrected. It took me a bit of digging, but the cash payout thing is entirely false, apparently. It's all tax incentives in one form or another..