Wisconsin Senate poised to pass $3 billion for Foxconn

By , on September 12, 2017

FILE: Foxconn (Photo by Foxconn, public domain)
FILE: Foxconn (Photo by Foxconn, public domain)

MADISON, Wis. — The Wisconsin Senate moved Tuesday to give electronics giant Foxconn Technology Group a slightly less expedited path to the state Supreme Court over legal challenges, as it prepared to approve nearly $3 billion in cash payments for the Taiwan-based company.

The proposed subsidy for Foxconn to locate a flat-screen factory in Wisconsin would be the largest ever from a U.S. state to a foreign company and 10 times bigger than anything Wisconsin has extended to a private business. It would take at least 25 years for Wisconsin to see a return on its investment, the nonpartisan Legislative Fiscal Bureau estimated.

But the bill as advanced by committee last week would also have allowed legal challenges to the project to head directly from the local circuit court to the Wisconsin Supreme Court, skipping the appeals court. A Republican amendment set to be approved Tuesday would instead give the Supreme Court the option to take an appeal directly or ship it back to the appeals court first. The Supreme Court is controlled 5-2 by conservative justices.

It would only apply to appeals of circuit court rulings related to decisions made by a state or local official or entity related to the Foxconn project.

Madison attorney Lester Pines, who has challenged Republican laws and raised constitutional concerns with the original proposal, said Tuesday the new revision still raised questions about separation of powers. All rulings would automatically be suspended until there was a final ruling, giving Foxconn an advantage no one else in Wisconsin enjoys.

The bill also speeds up filing deadlines for attorneys and court reporters, who must produce transcripts of court proceedings, changes that Pines called “really extraordinary.”

“This is bad for democracy, bad for our government, bad for the whole process,” Democratic Sen. Fred Risser said.

Under the bill, Foxconn would receive $2.85 billion in cash payments over 15 years if it invests $10 billion in the state and employs 13,000 people. It could also qualify for $150 million in sales tax exemptions for construction equipment.

The Assembly, which like the Senate is firmly in GOP control, takes a final vote Thursday. The bill then goes to Gov. Scott Walker, who led negotiations on the deal and has a deadline to sign a bill by the end of the month.

Senate Democrats, who didn’t have the votes to stop the bill, were pushing changes Tuesday they said would prioritize Wisconsin workers and businesses, protect taxpayers from overpayments to Foxconn and increase environmental oversight. None were expected to be adopted.

“Taxpayers know it’s going to cost them $3 billion but they have no idea what they’re buying,” said Sen. Jon Erpenbach, a Democrat from Middleton, during debate. “There are no guarantees in this legislation and we don’t even know what we’re buying.”

Republican Sen. Alberta Darling, co-chair of the Legislature’s budget committee, urged Democrats to get on board with a project she said was both a good deal for taxpayers and would be transformational for the state by making it a leader in the advanced manufacturing world.

“Passing this up would be a huge mistake,” she said.

Walker and other supporters say Foxconn is giving the state a once-in-a-lifetime opportunity to get a foothold in the world electronics market. Foxconn is the largest contract maker of electronics, best known for making iPhones, but with a long list of customers including Sony Corp., Dell Inc. and BlackBerry Ltd.

The Wisconsin plant would be the first outside of Asia to construct liquid crystal display panels for televisions, computers and other uses. Foxconn wants to open the factory by 2020 and initially employ 3,000 people.

Environmental groups and others concerned with waiving certain state regulations to speed construction of the plant have been threatening to file lawsuits. Foxconn would be allowed to build in wetland and waterways and construct its 20-million-square-foot (1.86-million -square-meters) campus without first doing an environmental impact statement.

Foxconn was eyeing locations in southeastern Wisconsin, in between Milwaukee and Chicago. On Monday, the mayor of Kenosha sent a letter to Walker saying the bill didn’t do enough to make it possible for the city to support the project, leaving Racine County as the likely home to the factory, although no exact location has been announced.