President Trump went to a groundbreaking ceremony in Wisconsin today. The event marks the ceremonial opening for a new factory for electronics manufacturer Foxconn. The new factory is massive and is expected to add thousands of high-paying jobs to the suburban Milwaukee area.
In order to land the deal to house the giant factory, the state offered Foxconn, a Taiwanese company, massive tax incentives, and breaks. Observers have said that it will be a generation before the state makes back the money it gave away to Foxconn on the deal. Some worry that this deal might be the beginning of increased taxpayer giveaways to large corporations.
Greg LeRoy leads the watchdog group Good Jobs First. The group keeps track of expensive incentive packages given to corporations by state and city governments. LeRoy said of the Foxconn deal,“The state is grossly overspending on a very risky deal. Even by its own math, the state says it won’t break even for 25 years. In high tech, that’s three lifetimes.”
Last August, the Republican-controlled legislature in Wisconsin approved the incentive package for Foxconn last August in a special session. The state offered the company $1.5 billion to offset payroll costs and another $1.35 billion for capital expenditures. Also, the state will give the company $150 million in sales tax exemptions on their construction materials. Wisconsin will also spend a quarter of a billion dollars on roads near the factory.
Additionally, the town where the factory is located, Mount Pleasant, is offering $763 million towards the project. Also, Racine County gave Foxconn $50 million to get the land for the factory. Foxconn has promised it will create 13,000 jobs. If they do indeed provide all of those jobs, the total investment on the part of the state, city, and county, will be $370,000 per job.
Richard Florida is an urban planning expert with the University of Toronto’s Martin Prosperity Institute. Florida calls the project “a complete and total waste of taxpayer money.” He also said,“Foxconn is a great deal for Foxconn and an absolutely terrible deal for Wisconsin.”
State Assembly Speaker Robin Vos (R) disagrees. Vos said, “The Foxconn project is a game changer for Wisconsin, with a $10 billion investment and tens of thousands of careers.”