Foxconn benefits likely to trickle north
Area legislators say initial talks with tech manufacturer look solid

By Lisa Curtis - News Graphic Staff

August 3, 2017

OZAUKEE COUNTY — Transformational. It’s a word that cannot be overused when talking about the state luring technology manufacturing giant Foxconn to Wisconsin, according to state Sen. Duey Stroebel, R-Cedarburg.

“There is going to be impact from the state line to Madison to Sheboygan,” he said of the deal that could bring up to 13,000 jobs to southeast Wisconsin, likely in the Racine-Kenosha corridor along Interstate 94.

And some of that impact will likely be felt in Ozaukee County in the form of more business for some existing companies and job opportunities for its residents, according to those who have been closely studying the discussions.

But for all of the excitement that goes along with the reported largest jobs attraction deal in U.S. history, great caution must also be exercised, officials say. Foxconn could be eligible for up to $3 billion in tax credits over 15 years, according to a Foxconn fact sheet provided by Republican state Rep. Rob Brooks of Saukville. Specifically:

Up to $1.5 billion in state income tax credits for job creation

Up to $1.35 billion in state income tax credits for capital investment

Up to $150 million for the sales and use tax exemption (sales tax holiday) Brooks applauded the governor and his team for protecting Wisconsin and its residents from all angles, including fiscally and environmentally, with very little risk of harm.

“I think we’re really covering the state,” he said.

To date, the only action taken has been a memorandum of understanding between the state and Wisconsin Economic Development Corp. and Foxconn and its parent company, Hon Hai Precision Industry Co., outlining the incentives based on jobs and capital expenditures.

Gov. Scott Walker has convened a special session of the Legislature this week, in which members will need to address a bill covering the numerous aspects of the agreement. The first of several public hearings is scheduled for 1:30 p.m. today at the state Capitol in Madison.

Among the issues to be weighed by legislators are the tax credits, environmental impacts and transportation costs. Stroebel, as well as Brooks, insist that there will be no credits whatsoever if Foxconn does not keep up its end of the bargain, namely creating the set number of jobs within a set period of time and investing in infrastructure.

“It’s pay-as-you grow,” Stroebel said. “It’s not like we’re saying, ‘here’s a big chunk of money.’ They (Foxconn) will need to perform to get any of this.”

Because the incentives are tied to actual performance, Foxconn can only earn the maximum amount of incentives if they fulfill the proposal to create 13,000 new jobs at an average salary of $53,875 and spend $10 billion in Wisconsin. The contract will also contain clawbacks that will require the company to pay back tax credits if the jobs and investment are not kept in Wisconsin.

“If you want to draw a major worldwide company to the state, that is the cost of being competitive,” Brooks said.

Ozaukee Economic Development Executive Director Kathleen Cady Schilling said it is too early to say how the announcement could impact Ozaukee County, but that it will likely bring more production and profits to certain manufacturers that would act as suppliers to the manufacturing process.