A Wisconsin State Assembly committee on Monday approved a US$3 billion tax incentive package for Taiwan-based Foxconn Technology Group (富士康), the first vote in what could be an intense month of legislative action to quickly pass the massive deal.
The Republican-controlled assembly’s jobs and economy committee voted 8-5 along party lines to send the bill to the full assembly, which plans to take it up tomorrow.
Republican-initiated tweaks were approved that attempt to address some concerns raised by critics that the state is giving away too much to win the US$10 billion plant that could employ up to 13,000 workers.
Photo: AP
However, the core of the proposal remains — including US$3 billion in tax breaks for meeting investment and employment targets. The panel rejected 22 Democratic amendments that sought, in part, to provide extra protections for taxpayers and the environment, and ensure that workers come from Wisconsin, are paid a living wage and have union protections.
“I ask that we take a deep breath, slow this down a bit and enter into further discussions to come up with the best deal possible,” said Democratic State Representative Tod Ohnstad from Kenosha, near where the plant may be built.
Republicans defended the deal as a once-in-a-lifetime opportunity.
“This is an investment that makes sense and we cannot look the other way and let this opportunity go by,” Republican State Representative Bob Kulp said.
The Wisconsin legislature’s budget committee could hold a hearing on the measure early next week, with a vote in the Republican-
controlled Senate sometime shortly after that.
“Rather than rushing through a US$3 billion tax break for a foreign corporation, we need to make sure Wisconsin taxpayers aren’t being taken for a ride,” Democratic Senate Minority Leader Jennifer Shilling said in a statement.
The proposal must clear both the state Assembly and Senate in identical form and be signed by Wisconsin Governor Scott Walker before taking effect.
Walker negotiated the deal, which was announced by US President Donald Trump with great fanfare about two weeks ago. The deal requires the legislature to pass the tax break bill by Sept. 30.
Despite the Democratic opposition, Republican Assembly Speaker Robin Vos last week said he expected the bill to pass with bipartisan support.
Foxconn is eyeing locations in Kenosha and Racine counties in southeast Wisconsin, areas of the state that include several Democratic lawmakers. It also is considering a secondary site in Dane County, a Democratic stronghold.
Foxconn has said it may invest US$10 billion on the plant that would open in 2020 with 3,000, but could expand to 13,000 people within six years.
Concerns about what the state is offering Foxconn increased last week when the nonpartisan Legislative Fiscal Bureau said it would take at least 25 years for Wisconsin taxpayers to break even on the proposed incentives.
It would take Wisconsin longer to break even depending on how many workers at the plant come from Illinois, the analysis said.
Under the bill, for every acre (0.405 hectare) of wetland disturbed on the Foxconn site, two acres would have to be restored. The amendment approved on Monday would say those should be in the same watershed, if possible, but other key environmental provisions, including exempting Foxconn from having to file an environmental impact statement, remained.
The committee also voted to tie payroll tax credits to the number of jobs Foxconn creates that pay between US$30,000 and US$100,000.
The bill was also changed to call for state officials to encourage in its contract with Foxconn that it hire Wisconsin residents, addressing concerns that many of the workers would come from neighboring Illinois.
The committee also approved spending US$20 million on worker training to help create a pipeline for high-tech workers who would be needed at the plant.
If constructed as promised, the Foxconn facility would be the first LCD monitor manufacturing plant outside of Asia.
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