Capitol Update
By Senator Howard Marklein
July 28, 2017
 
 
Welcome to Wisconn Valley?
 

Perhaps you have heard that a major technology manufacturer called Foxconn has selected southeastern Wisconsin for a $10 billion manufacturing facility that has the potential to create 13,000 jobs. But perhaps you are wondering why this matters to anyone in our corner of Wisconsin. Who cares?  It won’t affect us, right? 

 
It will. The State of Wisconsin will be considering a $3 billion incentive package that is part of the enticement to bring Foxconn to Wisconsin and it will affect every person in this state.
 
Foxconn is a Taiwanese company that designs, manufactures and assembles computer and high-tech consumer electronics.  They are best known for assembling iPhones.
 
The Wisconsin plant will be the first liquid crystal display (LCD) manufacturing facility outside of Asia and the first in North America. The displays produced in Wisconsin will be used in the automotive, health care and entertainment industries.
 
Governor Scott Walker was at the White House in Washington, DC for this major announcement, coining the name Wisconn Valley in a nod to the similarly-named technology oasis in California.  He illustrated that this announcement came as the result of collaboration and diligence from a number of leaders including President Donald Trump.
 
In fact, President Trump identified a location for Foxconn weeks ago when he visited SnapOn Tools in Kenosha and recognized Wisconsin’s potential for a major manufacturer. Wisconsin-native and Presidential Chief of Staff Reince Priebus pointed out the former location of Chrysler in Kenosha from the seat of a helicopter and the idea took off. Speaker Paul Ryan, Governor Walker and a number of other Wisconsin leaders took action and the announcement followed. If you missed the announcement, I encourage you to check out the video. It was a big day for Wisconsin!
 
While the announcement at the White House was exciting and Foxconn is committed to swiftly building their company here with an anticipated operation date in 2020, we are only at the beginning of the legislative process and the hard work that we will need to do on our end. Governor Walker will soon present a package of legislation to the state legislature that will include tax credit incentives with a variety of criteria, stipulations and rules.
 
The legislature will move this package through the legislative process, including briefings, committee hearings and executive sessions before moving the proposal to the floor of the Senate and Assembly. We will be studying the proposal in great detail and insuring that the people of Wisconsin are protected while we invest in a company that intends to make unprecedented investments in our state.
 
As I understand it, the tax credit incentives proposed by the Governor will be tied to actual performance. Foxconn will not receive credits if they fail to invest capital or create jobs.
 
The incentives are projected to cost between $200 million and $250 million a year for 15 years. The maximum amount of credits will be $3 billion divided into the following categories:

• Up to $1.5 billion in state income tax credits for job creation.
• Up to $1.35 billion in state income tax credits for capital investment
• Up to $150 million for the sales and use tax exemption (sales tax holiday) for construction materials.

 Foxconn’s investment is the state’s largest economic development project in our state’s history. It is also the largest corporate attraction project in United States history as measured by jobs and the largest greenfield investment by a foreign-based company.  Greenfield investments are a form of foreign direct investment where a parent company builds its operations in a foreign country from the ground up according to Investopedia.com.
 
The Foxconn campus will have a floor area of 20 million square feet, which will be one of the largest manufacturing campuses in the world. Governor Walker said that this space will be large enough to encompass 11 Lambeau Fields during his announcement.  It will be located on 1,000 acres – or 1.56 square miles – in southeastern Wisconsin. They are considering multiple sites right now.
 
The company intends to employ 13,000 workers when fully operational with an average salary of $53,875.  They intend to begin with 3,000 workers initially and grow. They project that the construction of the plant will involve 10,000 construction jobs and 6,000 indirect jobs over the next four years.

The $10 billion capital investment includes $5.7 billion for construction and equipment that will be sourced from Wisconsin businesses. We will likely see manufacturers, construction companies and businesses in our communities participate in this project.
 
It is also important to note that the jobs at Foxconn will keep some of our best and brightest in Wisconsin. I am optimistic that the engineering program at UW Platteville and other technology-based programs at our states’ universities are a major benefit.  The company likes that Wisconsin has a strong manufacturing legacy. They appreciate that the educational institutions in our state – the UW System, the Wisconsin Technical College System (WTCS) – are able to develop skilled workers and adapt to the educational needs of growing businesses.
 
As your State Senator, I will do my best to keep you informed on this process and to answer your questions. As of this writing, the best information I have is a Media Kit summary that was provided by the Governor’s office.  You may access the PDF here. I encourage you to take a look.
 
For more information and to connect with me, visit my website http://legis.wisconsin.gov/senate/17/marklein and subscribe to my weekly E-Update by sending an email to Sen.Marklein@legis.wisconsin.gov.  Do not hesitate to call 800-978-8008 if you have input, ideas or need assistance with any state-related matters.