The bundle of financial incentives Wisconsin offered to lure Taiwanese technology giant Foxconn's first major U.S. plant is larger than what New York, Virginia and Tennessee collectively offered to Amazon for far more jobs, a comparison of the two development projects shows.
Foxconn has said its $10-billion factory in southeastern Wisconsin will create up to 13,000 jobs that pay an average annual wage of $53,000. The value of tax credits and breaks that Wisconsin has pledged for the project totals at least $3 billion, according to the Wisconsin Economic Development Corporation, a public-private agency that helped assemble the package. Per the contract, the state will halt some payouts if the company does not deliver on those promises.
Racine County and the village of Mount Pleasant, where factory construction is underway, have added extra infrastructure perks projected to cost $764 million, according a spokesman for Mount Pleasant.
Meanwhile, Amazon announced this week that New York, Virginia and Tennessee would split 55,000 positions with average salaries of $150,000. Amazon is setting up new headquarters in New York's Long Island City and Virginia's Crystal City and a new operations center in Nasvhille, Tenn. The New York and Virginia facilities are poised to get 25,000 jobs each, and the Tennessee location will see 5,000 jobs.
It appears Foxconn is receiving a far more generous subsidy package than Amazon.
Mark Maley, communications director for the Wisconsin Economic Development Corporation, defended the contract with Foxconn Thursday, saying it remains a "game changer for the state of Wisconsin" that will attract more technology talent and bolster the future workforce. Maley said he had not reviewed the specifics of the Amazon deals.
President Donald Trump and Wisconsin Gov. Scott Walker jointly announced the Foxconn deal at the White House last year, describing it as an economic victory.
The prominent electronics maker and Apple supplier with factories in Asia, Europe and South America said it would produce flat-screen displays in the congressional district of House Speaker Paul Ryan.
Wisconsin beat out six other states to secure the contract with billions in state income tax credits and sales tax breaks over a 15-year period. Officials said at the time the project would generate 22,000 indirect jobs on top of the 13,000 that Foxconn promised.
The state's nonpartisan Legislative Fiscal Bureau forecast the deal wouldn't generate profits for Wisconsin until 2042, sparking criticism from liberals who felt Walker hurried the deal for a better shot at reelection.
He lost his race this month to Democrat Tony Evers, who has called the Foxconn deal a "Hail Mary pass on the part of the governor."
Views among residents vary, according to the latest poll from the Marquette University Law School: 46 percent of registered voters said they think the state is overpaying Foxconn, while 40 percent said the plant will deliver at least as much value as Wisconsin's investment.
Mount Pleasant, a village of 26,000, is the future home of Foxconn's 20 million square-foot site. It sits in Racine County, where the jobless rate is lower than the national figure at 3.1 percent.
Officials there have said the Foxconn factory will inject more than $1 billion into the local tax base and bring in new residents from nearby Illinois.
Racine county and Mount Pleasant are supplying roughly 3,000 acres of largely farmland for the Foxconn plant, which broke ground this summer, and building roads to support the business. Those investments, including sewer and sidewalk updates, will cost $764 million, according to Mount Pleasant figures.
The village has said the expenses will be covered by the taxes the Foxconn plant spawns and that if the company leaves, another business could use those resources.
"We are guaranteeing that no one in the village of Mount Pleasant is going to pay $1 more of taxes because of this project," Alan Marcuvitz, general counsel to the village, told the Milwaukee Journal-Sentinel last year.
Business on 11/16/2018