Wisconsin Senate approves $3 billion for Foxconn

Wisconsin Senate approves $3 billion for Foxconn
Posted at 6:25 PM, Sep 12, 2017
and last updated 2017-09-12 23:18:05-04

MADISON, Wis. (AP) -- The Wisconsin Senate approved nearly $3 billion in cash payments for Foxconn Technology Group on Tuesday, while also giving the Taiwanese company a slightly less expedited path to the state Supreme Court for certain legal challenges related to a planned massive electronics manufacturing factory.

Foxconn plans to invest up to $10 billion to build a flat-screen production factory in Wisconsin that would initially employ 3,000 but the company said could grow to 13,000. The proposed subsidy -- which now heads to the state Assembly for a final vote Thursday -- would be the largest ever from a U.S. state to a foreign company and 10 times bigger than anything Wisconsin has extended to a private business.

The Republican-controlled Senate discounted Democratic concerns that there weren't enough protections for taxpayers under the unprecedented incentive package. It would take 25 years for taxpayers to see a return on the investment, the nonpartisan Legislative Fiscal Bureau said.

"Taxpayers know it's going to cost them $3 billion but they have no idea what they're buying," said Sen. Jon Erpenbach, a Democrat from Middleton, during debate. "There are no guarantees in this legislation and we don't even know what we're buying."

Republican Sen. Alberta Darling, co-chair of the Legislature's budget committee, urged Democrats to get on board with a project she said was both a good deal for taxpayers and would be transformational for the state by making it a leader in the advanced manufacturing world.

"Passing this up would be a huge mistake," she said.

The Senate passed it on a 20-13 vote with 19 Republicans and Democratic Sen. Bob Wirch, of Pleasant Prairie, in support and 12 Democrats and Republican Sen. Rob Cowles, of Allouez, against.

Republicans changed the bill to give the Wisconsin Supreme Court the option to take appeals related to the Foxconn project directly from the circuit court and speed up filing requirements for attorneys. The bill as amended by committee last week required the Supreme Court to take all appeals directly from the circuit court, skipping the state appeals court. Legal experts had questioned the constitutionality of such a move.

Madison attorney Lester Pines said the new approach still raises constitutional questions about separation of powers. The lower court decision would be automatically suspended during the appeal.

It would apply to appeals of circuit court rulings related to decisions made by a state or local official or entity related to the Foxconn project.

"This is bad for democracy, bad for our government, bad for the whole process," Democratic Sen. Fred Risser said.

A dozen Democratic changes pushed Tuesday and rejected by Republicans sought to prioritize Wisconsin workers and businesses, protect taxpayers from overpayments to Foxconn and increase environmental oversight.

Under the bill, Foxconn would receive $2.85 billion in cash payments over 15 years if it invests $10 billion in the state and employs 13,000 people. It could also qualify for $150 million in sales tax exemptions for construction equipment.

Republican Gov. Scott Walker, who led negotiations on the deal, faces a deadline under terms of the agreement to sign a bill by the end of the month.

Walker and other supporters say Foxconn is giving the state a once-in-a-lifetime opportunity to get a foothold in the world electronics market. Foxconn is the largest contract maker of electronics, best known for making iPhones, but with a long list of customers including Sony Corp., Dell Inc. and BlackBerry Ltd.

The Wisconsin plant would be the first outside of Asia to construct liquid crystal display panels for televisions, computers and other uses. Foxconn wants to open the factory by 2020 and initially employ 3,000 people.

Environmental groups and others concerned with waiving certain state regulations to speed construction of the plant have been threatening to file lawsuits. Foxconn would be allowed to build in wetland and waterways and construct its 20-million-square-foot (1.86-million -square-meter) campus without first doing an environmental impact statement.

Foxconn was eyeing locations in southeastern Wisconsin, in between Milwaukee and Chicago. On Monday, the mayor of Kenosha sent a letter to Walker saying the bill didn't do enough to make it possible for the city to support the project, leaving Racine County as the likely home to the factory, although no exact location has been announced.

Despite some heated debates, Wisconsin state senators worked into the evening to pass a deal to bring Foxconn to the state..

"For as many people who are coming to you and saying 'don't do it.' You are going to hear more people say, 'Why in the heck did you miss this opportunity?'" said State Senator Alberta Darling (R-River Hills).

While senators hammered out the $3 billion incentive plan to land the Taiwanese flat-screen plant, Kenosha pulled themselves out of the running.

"We basically looked at the legislation, ran the numbers on how this would effect Kenosha 19:04 and there were areas of concern," said Kenosha Mayor John Antaramian.

According to Antaramian, he was worried about the boundary agreement for the site. There is no sewer or water for the plant. Plus, they would need to add police and fire and that all falls on taxpayers.

"The job that I have here is to protect the city of Kenosha," said Antaramian. 

While Kenosha says no to the deal, that means only Racine County is left.

"Fantastic. I mean, we have been on pins and needles for months now," said County Supervisor Kay Buske.  

Racine County Board members met behind closed doors Tuesday to talk about about the use of public funds in Mount Pleasant, where Foxconn will likely go. But the board would give no specifics, only releasing this statement: 

“We remain hopeful that Foxconn will choose to call Racine County home. The impact of this investment on our community would be unprecedented and the opportunity enormous. We may have a chance to transform our region, creating tens of thousands of new jobs for Racine County, and we are hard at work to capitalize on that chance in a well thought-out, careful, and conservative way that makes Racine County highly desirable, while maintaining our commitment to the taxpayers of our great County.”