MADISON ó Wisconsinís
economic development agency needs to modify procedures to ensure tax
credits arenít awarded for Foxconn Technology Group employees who
donít do work in the state, which would violate state law and the
contract with the company, an audit released Wednesday said.
The report from the nonpartisan Legislative Audit Bureau comes
before any credits have been awarded to Taiwan-based Foxconn for its
display screen factory and campus thatís under construction in
southeast Wisconsin. The first credits, up to $9.5 million, that are
part of a nearly $3 billion deal struck with the state would be
awarded next year.
When calculating what Foxconn employees qualify for meeting terms of
the contract, only those working in Wisconsin count, the audit said.
The Wisconsin Economic Development Corporation wrongly wrote
guidelines that would allow Foxconn employees not doing work in the
state, but who are paid in Wisconsin, the audit said.
Awarding credits for out-of-state workers is contrary to both state
law and the contract with Foxconn, the audit said.
The head of the economic development agency, Mark Hogan, said in a
letter to auditors that WEDC believed employees outside of Wisconsin
should be counted because they are being directed by the Foxconn
operation in the state, resulting in their wages being subject to
state income tax.
But Hogan also said that WEDC will modify its procedures, if
necessary, to comply with the contract and state law. The agency
plans to update lawmakers on the status of its efforts by the end of
Republican state Sen. Rob Cowles, co-chairman of the Legislatureís
Audit Committee, said he looked forward to WEDC revising its
procedures in accordance with the law. He said the report
ĎĎuncovered a discrepancy that had the potential to cost Wisconsin
Democrats have been the loudest critics of the project, saying the
state is spending too much. The credits are awarded based on jobs
created and money invested.
Foxconn has said it may invest up to $10 billion and hire 13,000
people over 15 years at the complex near Racine, but critics say
they doubt the company will follow through at that massive of a
level. Outgoing Republican Gov. Scott Walker negotiated the deal but
his Democratic successor Tony Evers has said he would like to