A $3 billion state incentive package for electronics maker Foxconn, the largest ever of its kind, moved much closer to becoming reality Tuesday by passing the state Senate.
The bill passed on a 20-13 vote with two senators breaking party lines. Republican Sen. Rob Cowles of Allouez voted “no,” while Democrat Bob Wirch of Kenosha, near where Foxconn may locate, voted “yes.”
Senate Republicans had moved more cautiously than their Assembly counterparts on the Foxconn measure. Its passage returns the bill to the Assembly for what likely will be a swift approval on Thursday.
The bill then would head to its champion, Gov. Scott Walker, for a signature.
The city of Kenosha announced Tuesday that it’s dropping out of the running for the proposed $10 billion Foxconn campus, which would build liquid crystal display, or LCD, screens. Kenosha Mayor John Antaramian wrote Walker a letter saying the bill could leave the city “unable to support and/or absorb the development of the project.”
That appears to tip the Foxconn sweepstakes in favor of Racine County, also believed to be vying for the facility. Sites in western Kenosha County also may still be in the running.
Meanwhile, Senate Majority Leader Scott Fitzgerald moved to soften a controversial recent addition to the bill that would send appeals of court orders relating to a potential Foxconn facility directly to the state’s Supreme Court, bypassing state appeals courts.
Another change to the bill would link as much as $1.35 billion in tax credits for Foxconn, those related to construction of the campus, to annual “job creation thresholds.”
As with much of the Foxconn development, details of how that would occur — and whether the job thresholds would be binding — would be left to Walker’s jobs agency, Wisconsin Economic Development Corp., or WEDC. The agency would hammer out specific terms with Foxconn under broad parameters spelled out in the bill.
‘Be a part of it’
Sen. Alberta Darling, R-River Hills, appealed to her Democratic colleagues for support. She, Walker and other supporters of the measure say Foxconn promises thousands of jobs in a single development that could transform Wisconsin’s manufacturing sector.
“This is a very, very important step for Wisconsin. Be a part of it,” Darling said.
Democratic lawmakers have cast the bill as a corporate handout that lacks safeguards for taxpayers and doesn’t ensure Foxconn will create the jobs it promised. They also have criticized the bill for leaving too many of the details of a potential agreement to WEDC.
“This is the largest state giveaway to a foreign corporation in the nation’s history,” said Senate Democratic Leader Jennifer Shilling, of La Crosse.
Foxconn says it will create 3,000 jobs initially, and as many as 13,000 over time, at the proposed $10 billion manufacturing campus. The plant would be the first American manufacturing facility for Foxconn, a Taiwanese company that makes iPhones and other electronics. It also would be the first LCD panel factory in North America, according to WEDC.
In return, the state would provide $3 billion in incentives over 15 years. That includes $2.85 billion in tax credits: $1.35 billion linked to capital investment and $1.5 billion for job creation. Another $150 million would be for sales tax exemptions for materials used to construct the campus.
The proposed tax credits would be refundable, meaning any amount by which they exceed Foxconn’s state tax liability — expected to be near zero — would be refunded to the company in cash.
A recent analysis by the Legislature’s nonpartisan fiscal bureau estimated it would take 25 years for state coffers to begin realizing a return on the tax credits.
Sen. Jon Erpenbach, D-Middleton, said the bill puts too few stipulations on Foxconn in exchange for a big payout from taxpayers.
“There are no guarantees in this legislation, and we don’t even know what we’re buying,” Erpenbach said.
Democrats also sought to cast the debate in geographic terms. Shilling and Sen. Janet Bewley, D-Delta, said their constituents in northern and western Wisconsin, hundreds of miles from the likely Foxconn site, overwhelmingly oppose the bill.
During Tuesday’s debate, Senate Democrats proposed a slew of amendments, all of which were rejected by the GOP majority. One would have required workers at the Foxconn campus to be Wisconsin residents in order for the company to use them as a basis to claim tax credits. Another would have scrapped proposed rollbacks of environmental protections for the Foxconn project.
The bill exempts Foxconn from permits that are otherwise required for filling wetlands, straightening streams, and disturbing other waterways. It also eliminates Foxconn’s responsibility to create an environmental impact statement that would allow the public to review all the possible harm that could be done to air, water and soil.
The company would still be subject to permit limits on air pollution, wastewater discharges and disposal of hazardous waste.
Change ‘for decades’
Fitzgerald told senators, as debate began Tuesday, that he’s glad Senate Republicans “pumped the brakes” on taking up the Foxconn bill earlier this summer.
The intervening time allowed lawmakers to “improve this bill significantly,” he said.
“We’re in a position right now to maybe take a vote on something that’s going to change Wisconsin’s economy for decades to come,” Fitzgerald said.
The state Assembly passed a version of the bill last month. The Legislature’s budget-writing Joint Finance Committee amended it last week to create the version that went to the Senate.
Under the original Joint Finance amendment, appeals of court decisions related to the Foxconn project would bypass state appellate courts and go straight to the state Supreme Court. Conservative justices currently hold a 5-2 majority on the high court.
Fitzgerald’s amendment would allow the Supreme Court to decide whether to rule on such appeals or send them back to the appeals court. It would still create a special track in state courts for appealing judicial orders on state or local government decisions affecting Foxconn or other businesses that would locate in so-called “electronics and information technology manufacturing zones” established under the bill.
Democrats have blasted the change, saying the state should not change its judicial process to accommodate a single corporation.