Wisconsin

The Foxconn Election

Policy

Wisconsin Democrats have made it clear: the 2018 election for governor will be the Foxconn election. Governor Scott Walker took their chief talking point against him off the table Wednesday, when Foxconn announced it had chosen Wisconsin for a $10 billion, 13,000 job facility. Democrats had expected to run against Walker on his jobs record. Even as much as they have distorted that record, running against Walker on that issue now seemed hopeless. So that strategy has shifted to painting the Foxconn news as a con.

Democratic legislative leaders didn’t even wait for the formal announcement Wednesday before firing off news releases that alleged the proposal was smoke and mirrors. Any doubt that was left that Democrats would build the 2018 gubernatorial campaign around opposing Foxconn was obliterated Thursday with this fundraising email from State Superintendent of Public Instruction Tony Evers, who is preparing a run for governor:

Team,

Foxconn is looking to build their new factory in Southeast Wisconsin. We welcome every new job that comes to Wisconsin.

But the devil is in the details.

Foxconn is asking for up to $3 billion in state tax incentives in order to build their factory here. A quick calculation shows that’s more than $230,000 in tax incentives for every one of the 13,000 jobs they’ve promised to create.

Today, Bloomberg BusinessWeek estimates that Wisconsin taxpayers could end up paying as much as $1 million per job , when all the specifics are fully revealed.

That’s outrageous.

Scott Walker has a long track record of grand job promises with expensive government incentives. They didn’t pan out – and Wisconsinites were stuck with the bill.

Foxconn has a troubling history of making other states pay dearly for the jobs they create.

With so much at stake for our kids and the budget still not done, we must hold Scott Walker accountable on the details of the Foxconn announcement. Jobs must come at a reasonable cost to taxpayers, and not at the expense of our kids.

Tony

Media Trackers was presented with the “$230,000 per job meme” earlier Thursday by another Foxconn opponent. We didn’t know then that it came from a Bloomberg article that misstates that Foxconn plans to employee 3,000, not the actual 13,000. In fact, Walker opponents were peppering Twitter Thursday with allegations that Walker was throwing out “different job numbers.” It appears Tim Culpan’s article may have been the source of most of that confusion.

James Wigderson at Right Wisconsin has efficiently corrected Evers’ math homework:

The actual amount per job at the Foxconn facility is $15,384.62 annually. The average pay for those jobs will be $53,875 per year plus benefits. Total annual payroll is expected to be $700 million compared to the estimated $200 million to $250 million in annual tax credits.

Evers also uses $230,000 per job, but that’s over 15 years. In that same 15-year period, the average worker at the Foxconn facility will earn $808,125.

These figures don’t include the 10,000 construction jobs and the resulting 6,000 indirect jobs over the next four years, nor does it include the 22,000 indirect and induced jobs after construction is completed.

Another way to look at the tax credit subsidy, Wisconsin will give $3 billion over 15 years. The Foxconn investment of $10 billion to construct a manufacturing facility will result in $7 billion in annual economic activity, or $105 billion in economic activity over the 15 years of the $3 billion in tax credits, a net $102 billion for Wisconsin.

And completely absent from these numbers are ancillary development; stores, restaurants, etc., that will surely come along in the area the facility is built. And companies supplying Foxconn to build smartphones and other devices will also prosper in Wisconsin.

Democrats were caught flatfooted by what is likely the largest single economic development announcement in state history. It undercuts their entire campaign strategy against Walker: where are the jobs. They may feel they have no choice but to oppose Foxconn. But will they be able to maintain that opposition when it comes time for legislative Democrats to cast actual votes against 13,000 jobs?

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