Saturday, April 7, 2018

Foxconn Folly Update

Foxconn Industrial Operations Would Represent A Major New Source Of Air Pollution In Region
Emissions from the company’s operations in Mount Pleasant would rank among the highest in southeastern Wisconsin for pollutants that create smog, also known as ozone pollution, state documents show.
Foxconn Keeps Racking Up Taxpayer-Funded Help
Which leads to an obvious question – why do numerous levels of Wisconsin government continue to bend over backward to shovel billions of tax dollars to help this one company, when we could pay to meet many other needs in the state that would benefit far more people for a much lower cost? The insanity of the Fox-con continues to grow with each story you read.
Journal Promotes Phony Foxconn "Report"
The Milwaukee Journal Sentinel has promoted, without questioning, a “report” on Foxconn by the Metropolitan Milwaukee Association of Commerce that seems more like a PR piece than a study. With the headline “Foxconn would provide $51 billion boost, report says,” JS reporter Rick Romell regurgitates the MMAC press release as if it were hard news, rather than a transparent attempt to sell the more than $4 billion in government subsidies going to the Taiwanese company. 
Both Romell’s article and the MMAC release refer to a “report” done by it, but there is no link to any report in Romell’s online article (isn’t that a basic requirement for a newspaper story these days?) and the MMAC website reveals the analysis has no named author and consists of a one-page breakout of what it contends is the likely economic impact. 
This is not a study. It’s more like a marketing tool by a Foxconn cheerleader. 
Simply stated, the MMAC’s claims seriously exaggerate Foxconn’s potential impact on the Wisconsin economy.
Foxconn In Choppy Waters Over Plan To Drain The Great Lakes
Perhaps the biggest question, however, is whether the deal violates the Great Lakes Compact, a 2008 deal signed between the eight Great Lakes states and whose governing body includes Ontario and Quebec. The agreement aims to keep Great Lakes water from being diverted to areas far beyond the Great Lakes Basin, but it also requires that any water that is diverted be used to serve mainly the public, not industry.
Scott Walker, Foxconn, And The Wisconsin Economic Development Corporation
The money spent on the Foxconn project will affect the state’s economy for the next several decades. The massive amounts of subsidies could create a higher tax burden and could divert resources from other state projects, especially because the deal would not begin to be a net return to the state until around the 2040s.

Even supposing that Foxconn employs the full 13,000 they say they will, if they fully meet capital investment requirements, the deal is far more expensive than is typical for incentives packages negotiated by the WEDC. For economic development programs that require job creation and capital investment, the WEDC, on average, plans to spend around $12,400 for each job created. The Foxconn incentive package would cost around $200,000 per job if only the tax credits are taken into account. That number rises to well over $300,000 if all aspects of the incentive package are included. This number could continue to rise if Foxconn does not follow through on its obligations, or if it continues to extract concessions from the WEDC and Governor Walker’s office (as they have already begun to do). Further, while Foxconn gets a large package of free land, infrastructure subsidies, and tax breaks, local businesses do not get the same. On top of that, Foxconn is not required to source materials from inside the state, so it will potentially bypass in-state suppliers. 
The Foxconn Deal would place unnecessary strain on the local economy. It will give a large foreign corporation a huge subsidy at the expense of everybody else. This unfair transfer of state funds happens as 27% of roads are in need of repairs, and schools need $800 million in additional capital funding. It is important that state economic development programs are transparent in their implementation, and that all contractual obligations are adequately enforced. Further, it is important that the Wisconsin government meet current funding obligations before smokestack chasing.

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