August 11, 2017

 

Foxconn Update


Since my last E-update, the Assembly Committee on Jobs & the Economy held a public hearing on the Foxconn project. The hearing lasted about 10 hours, and individuals from all sides of the issue voiced their opinions. If you'd like to watch the hearing you can do so here.

The next step in the process will be an Executive Session in the Committee on Jobs & the Economy. We are currently looking at ways we can improve the bill, and it is likely there will be amendments presented for consideration and a vote at the hearing. The tentative date for the Executive Session is next Monday or Tuesday.

A lot of new information has been presented regarding the Foxconn project this week. The big headline from the Legislative Fiscal Bureau memo being pushed in the media and by opponents of the project is that Wisconsin will not "break-even" until around 2042. This analysis however, does not factor all the other benefits of the project. This is noted by the Legislative Fiscal Bureau later in the memo:

It should be noted that the analysis focuses only on the impacts of the Foxconn project on the state treasury, but does not account for other benefits to the state’s economy and residents. For example, based on the assumption outlined above, the capital expenditure credit and sales tax exemption would have a value of approximately $1.5 billion, but would also induce private investment of $10 billion from Foxconn alone, for a leverage ratio of $6.70 of private investment for each $1.00 of public outlay. Likewise, the 17% payroll credit implies a leverage ratio of 5.9 to 1, just considering Foxconn’s payroll. The leverage ratios are even higher if the indirect and induced jobs associated with the project are considered. Most state expenditures do not result in private investments of this nature. The project would also provide greater employment opportunities for the state’s present and future workforce, and add a new sector to the state’s manufacturing economy.

This project has the potential to transform manufacturing in our state by adding an entirely new sector. While the LFB memo provides important insights into the cash flow of the Foxconn deal, it does not necessarily detail or depict the overall economic benefit to be realized by the state. In addition to the 13,000 jobs directly created by Foxconn, it is estimated that the project will create at least 22,000 indirect and induced jobs throughout the state. Foxconn's annual supplier purchases are estimated at $4.26 billion in supplier purchases annually, about one-third of which will be sourced here in Wisconsin. These are jobs and investment that give individuals and families the opportunity for good salaries, and give businesses the opportunity to grow. The project is expected to have at least a $7 billion economic impact, and will generate an estimated $181 million in state and local tax revenues annually, including $60 million in local property taxes.

In addition to the dollar figures, the Foxconn project can be a catalyst to attract new people and businesses to the state. It provides the foundation to build a new arm of technology manufacturing in Wisconsin.

Over the last couple of weeks, I have received calls and emails from both supporters and opponents on the proposed project. If you have thoughts on the issue I encourage you to send me an email to let me know what you think.


Wisconsin Gets a Bump


 

Last week, Wisconsin's credit rating got a positive bump:

Wisconsin won a one-notch credit ratings upgrade to 'Aa1' from Moody's Investors Service on Friday despite the state's fiscal 2018-19 biennial budget being overdue.

The action affects about $8 billion of outstanding general obligation bonds, according to the credit ratings agency.

"The upgrade to 'Aa1' reflects the proven fiscal benefits of the state's approach to granting and funding pension obligations when many other states are experiencing stress from rising costs and heavy liabilities; an economy that delivers steady but moderate growth; conservatively managed budgets, and adequate liquidity," Moody's said in a statement.

While Wisconsin began its new fiscal biennium on July 1, its Republican-controlled legislature has yet to pass a spending plan as lawmakers debate how to fund transportation projects and consider a $3 billion package of incentives for a new LCD screen plant by Taiwan's Foxconn.

"We don't consider occasional late budgets as having a credit impact," said David Jacobson, a Moody's spokesman.

 


Community Events


Glendale

Event: Root Beer Bash - Police Department Charity Run/Walk

Date and Time: August 26th at 9:30 AM

Location: Richard E. Maslowski Community Park

Description: Check out the website for more details here.

Menomonee Falls

·       Event: 10th Annual Pet Fair

·       Date and Time: August 19th 9:00 AM - 4:00 PM

·       Location: Rotary Park off Fond du Lac Avenue

Description: Join us at the 10th annual HAWS Pet Fair in Rotary Park off Fond du Lac Ave. on both sides of the river August 19th, 2017. Food, raffles, vendors, demonstrations, Photography Portrait with donation to HAWS, clippings, games and more.

 Brown Deer

Event: Community Vibes Concert Series

Date and Time: August 16th at 6:00 PM

Location: Village Park

Description: Saturday June Band (Classic Rock) will be performing

 

           
   
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State Capitol Room 218 North - PO Box 8952, Madison, WI 53708
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