Kapenga Opposes KC Bailout

By James Wigderson for Media Trackers

Wisconsin Sen. Chris Kapenga (R-Delafield) announced his opposition to a proposed state bailout of the Kimberly-Clark factories in Fox Crossing, WI and Neenah, WI. The bailout is modeled after the incentive package being offered to Foxconn to locate a large manufacturing facility in Mount Pleasant, WI.

“The Foxconn deal is not a template to provide extra benefits to any company who asks. This is a precedent that we should not set,” Kapenga said in a statement Wednesday. “Wisconsin has robust existing programs to promote economic development and job retention that Kimberly-Clark can attempt to utilize, just as any other company can. For these reasons, I would not support the proposed legislation.”

The statement follows an announcement by Kimberly-Clark that they have reached an agreement with the United Steelworkers union Monday night. That agreement was greeted warmly by lawmakers, including Gov. Scott Walker, who are hoping to avoid the layoff of hundreds of workers in the Neenah area.

““The agreement reached between Kimberly-Clark and the United Steelworkers is outstanding news, and we look forward to working with Senate leaders and the company to keep hundreds of good-paying, family-supporting jobs in the Fox Valley,” the governor said Tuesday.

Senate President Roger Roth (R-Appleton) called for the state Senate to reconvene to consider AB 963 which passed the Assembly in February. Senate Majority Leader Scott Fitzgerald (R-Juneau) is meeting with the minority leader Sen. Jennifer Shilling (D-La Crosse) and members of his caucus regarding the bill, according to the Wisconsin State Journal. The Senate did not take up the bill earlier because it was unclear if the proposed subsidies would be sufficient to keep the Kimberly-Clark operations open.

The Assembly bill would give Kimberly-Clark a payroll credit equal to 17 percent of the eligible payroll for full-time employees whose annual wages are between $30,000 and $100,000. The credit could be certified for no more than 15 years. In addition, the bill would also give Kimberly-Clark capital expenditures credit of 15 percent and creates a sales and use tax exemption for the sale of building materials, supplies, and equipment for the facilities.

According to the Legislative Fiscal Bureau, the cost to the state would be approximately $6.6 million annually for the payroll credit, The impact of the capital expenditures and the sales tax exemption are unknown.

A number of prominent Wisconsin conservatives, including Rick Esenberg of the Wisconsin Institute for Law & Liberty, Brett Healy of the MacIver Institute and Mike Nichols of the Badger Institute, opposed the Kimberly-Clark bailout when it was proposed in February. Joined by Adam Brandon of FreedomWorks in writing an op-ed in RightWisconsin, the conservatives described the bailout as, “simply bad economics and sets a troubling, if not unsustainable, precedent for economic development.”

“We were told by Gov. Walker that Foxconn was a ‘transformational, once-in-lifetime opportunity for Wisconsin,’ and that bringing in the Taiwanese high-tech advanced manufacturing could result in 13,000 high-tech jobs and 22,000 indirect jobs throughout the state,” the four conservatives wrote. “But by extending the same tax credits to Kimberly-Clark, the state is creating a precedent that any business is capable of receiving the ‘Foxconn’ treatment if they threaten to relocate or go out of business.”

In his statement on Wednesday, Kapenga offered similar reasons for opposing the Kimberly-Clark bailout.

“When the legislature approved the Foxconn deal, it provided a once-in-a-lifetime opportunity for our state to attract a cutting-edge industry,” Kapenga said. “I felt it was in the best interest of the taxpayers, as the significant growth potential has the ability to fundamentally transform our state’s economy for decades to come.”

However, Kapenga did not see the same benefit from a bailout of Kimberly-Clark.

“The potential job losses are a result of United Steelworkers union bureaucrats failing to come to a better agreement with Kimberly Clark,” Kapenga said. “It is not the role of government to put taxpayer dollars at risk in the middle of disputes between businesses and unions.”