Wisconsin’s top financial regulator said Tuesday a plan to give an electronics maker incentives to build a campus in the state will pay off.
Department of Financial Institutions Secretary Jay Risch spoke to the Baraboo Kiwanis Club on Tuesday at the Barn Restaurant. He said a $3 billion incentive package under consideration in the Legislature for Taiwanese electronics maker Foxconn would yield a return of nearly $4 on every dollar spent.
“This is just transformational in its impact on the economy,” Risch said.
Construction of a campus of plants designed to build liquid crystal display screens for computers and smartphones would create an estimated 10,000 jobs, plus 6,000 jobs created indirectly among suppliers. Going forward, Foxconn would create 13,000 jobs at its plants, plus another 22,000 indirect jobs. Those jobs would pay an average of $53,000 per year plus benefits.
Risch touted “clawback” measures that would enable the state to get its money back if job goals aren’t met. “They don’t get all the money if they don’t make good on all their promises,” Risch said. “If they produce, you’re happy to pay it.”
The incentive package to land Foxconn would give the company $2.85 billion in refundable tax credits, over a 15-year period, to locate at an as-yet-unannounced site in southeast Wisconsin. Of that, $1.35 billion would be given in exchange for the company’s stated plans to invest $10 billion building a manufacturing campus.
An amendment offered by Republican lawmakers Tuesday would require the Wisconsin Economic Development Corp. to create hiring goals tied to the $1.35 billion in capital investment credits.
“I don’t see them leaving after they’ve established this toehold that they’re getting in the country,” Risch said. “I’m very optimistic and bullish that they’re interested in having this monster plant in Wisconsin.”
Legislative debate about Foxconn incentives came as lawmakers debated their overdue 2017-19 budget. The transportation budget has been a major roadblock, and the Baraboo area’s state senator, Middleton Democrat Jon Erpenbach, said Republican lawmakers are foolish to offer billions to Foxconn while hamstringing a Verona Road reconstruction project and hurting Madison businesses.
“It’s kind of ironic how the Legislature — the majority party and the governor — are tripping over themselves to do whatever they can do for Foxconn,” Erpenbach said. “They’re not doing the same thing for the businesses we already have here in Wisconsin.”
Risch said Foxconn’s arrival in Wisconsin could open avenues to many businesses, such as Marathon County producers of ginseng, a popular product in Asia. “This is such a big project that it’s going to impact everybody,” Risch said.
Asked about environmental regulations being peeled back to expedite the Foxconn project, Risch assured Kiwanians that while an environmental impact statement may not be required, the project will be subject to state and federal environmental laws. “It eliminates some of the front-end paperwork Foxconn would have to prepare,” he said.
“I don’t think it’s an either/or. We all want clean air, we all want clean water and we all want jobs.”