Foxconn will transform Wisconsin’s economy and won’t blow a hole in future state budgets.
That was the message from state Department of Administration secretary Ellen Nowak as she promoted the massive Foxconn project during an appearance at Cranberry County Lodge in Tomah Monday.
Taiwan-based Foxconn is spending $10 billion on the project, which it says will create up to 13,000 jobs. The company intends to manufacture LCD screens at the facility.
The project is being subsidized by $4.7 billion in state and local tax dollars over the next 25 years. The state has also agreed to relax some environmental regulations and change the process for legal appeals for the company. The state is expected to break even on the deal in 2043, according to an analysis by the Legislative Fiscal Bureau.
After touting the economic impact of the project before an audience of 30 business people, Nowak said in a separate interview that the project won’t compromise other state spending priorities. She said the subsidies will be paid from economic growth generated by the plant.
“There’s not going to be any impact on other entities around the state because this is money we would never have otherwise seen coming into the state,” she said.
Nowak told the audience that Foxconn will result in “an entire new economy in Wisconsin” and its effects will be felt statewide. Foxconn has announced “innovation centers” in Eau Claire and Green Bay and that the company will establish its North American headquarters in Milwaukee.
She said contractors and subcontractors from 26 of Wisconsin’s 72 counties will help construct the Foxconn campus in the town of Mount Pleasant. She said 400 workers are already at the site, and that figure will grow to over 3,100. Construction began in June.
“Folks from all over Wisconsin are coming down there to work,” Nowak said.
She urged any business interested in bidding for Foxconn work or becoming part of the supply chain to visit the website wisconsinvalley.wi.gov.
Nowak said Foxconn won’t get its first credit until next year and that state taxpayers are protected.
“I think it’s important to note that the subsides are paid out ... only after they earn them,” Nowak said. “They first have to make that first initial investment to hire those employees in Wisconsin.”
She doesn’t believe the public subsidy level, the highest a state has ever paid for such a project, sets a risky precedent. She said every dollar of subsidy will generate $18 in economic growth.
“We always look at these on an individual basis and what the overall return will be,” she said. “Everything has to be evaluated on its original merit. Certainly it’s not available for every company coming in.”
When asked if Foxconn could have built the project without tax dollars, Nowak said, “That’s something you would have to ask the company a little bit more about.” However, she said other states offered more money than Wisconsin.
“We weren’t the highest in what we had offered,” Nowak said. “But there were a lot of other things about Wisconsin − our workforce, our location, our economic climate − that attracted them as well.”