Wisconsin Assembly Expected to Approve $3 Billion Tax Package for Foxconn
August 17 2017 - 5:06PM
Dow Jones News
By Shayndi Raice
The Wisconsin State Assembly will vote Thursday on a $3 billion
tax-incentive package for Taiwan's Foxconn Technology Group to
build a display-panel plant that Gov. Scott Walker says will bring
thousands of jobs to the state.
The vote, expected Thursday evening, could allow the bill to
proceed to the state Senate. The deal is largely expected to pass
in both houses of the Republican-controlled legislature, although
how much bipartisan support it will receive remains unclear. Mr.
Walker, a Republican, said he believes the bill will pass before
Labor Day.
Foxconn, best known for assembling Apple Inc. iPhones in China,
is planning to build a $10 billion, 20 million square-foot campus
that will primarily produce high-resolution liquid-crystal displays
used in smartphones and car dashboards in addition to TVs. The deal
was announced last month at a White House ceremony as part of
President Donald Trump's efforts to revive the U.S. manufacturing
industry.
Mr. Walker has touted the benefits of the plant, including
claims that it would hire 3,000 people initially and up to 13,000
workers eventually. Tens of thousands of other jobs would be
created indirectly, according to reports from consulting firms
hired by the state and Foxconn.
Mr. Walker has also argued the deal would be transformational
for the state's economy, attracting an influx of investment and
talent.
But a state fiscal analysis found that taxpayers would not
recoup their investment in the 15-year tax-credit deal until the
2042-2043 fiscal year. The hefty tax bill has led some lawmakers to
question whether the deal as it's currently structured makes sense.
Others have also raised concerns about an easing of some
environmental requirements for Foxconn.
Rep. Peter Barca, the Assembly minority leader, said at
Thursday's session that, "We can restructure this deal so by the
time we've paid out over 15 years, the taxpayers would have been
made whole. It's not that hard to do."
The state Senate hasn't given a firm date for when it will take
up the bill, but the majority leader expects the bill to pass
before a Sept. 30 deadline.
Foxconn, formally known as Hon Hai Precision Industry Co., is
the world's foremost contract manufacturer and one of China's
largest exporters, making products for a range of companies,
including Apple.
With this investment, Foxconn Chairman Terry Gou is betting the
U.S. can re-create the supply chain that moved to China and other
lower-cost Asian countries in recent decades.
This wouldn't be Mr. Gou's first attempt at opening a U.S.
display factory. In 2014, the firm explored a potential $40 million
investment in manufacturing and research facilities in Pennsylvania
that didn't advance because local governments didn't offer terms
that were favorable enough.
Write to Shayndi Raice at shayndi.raice@wsj.com
(END) Dow Jones Newswires
August 17, 2017 16:51 ET (20:51 GMT)
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