Friday, November 10, 2017

Walker hails $10b Foxconn pledge; MJS says it's 'at least $9b'

A billion here, a billion there, a billion lost?

Everett McKinley Dirksen, help please.

I asked on this blog yesterday why the $10 billion investment which Scott Walker said repeatedly that Foxconn had pledged to spend on its project in order to receive $3.74 billion in state and local subsidies was recently reported as an investment of "at least $9 billion."
To get the full tax credits and an additional $150 million in sales tax savings, Foxconn would have to spend at least $9 billion on the plant and essentially employ 13,000 workers from 2022 through 2032. 
I heard Walker on the radio this afternoon bellow the $10 billion figure to the crowd at the contract signing - - but I see again that the Journal Sentinel is reporting the qualifying spending at a billion dollars less: 
The company would have to spend at least $9 billion on its production complex. It also would be eligible for $150 million in sales tax savings. 
What happened to that billion bucks, a subtraction that raises the relative value of the benefits in Foxconn's favor, and why won't Walker acknowledge it?

Why won't media offer an explanation and force Walker to be accurate?

If this is my mistake or misunderstanding, let me know.

Full Foxconn archive post, here.



George H. said...

Matt's story on the contract in the State Journal includes the same information. Somebody lost a billion dollars: "Though Gov. Scott Walker and Foxconn CEO Terry Gou agreed earlier this year on a $10 billion investment by the company, the contract only requires the company to invest $9 billion in the state to be eligible for tax credits. Hogan said the company still plans to invest $10 billion, but the construction tax credits are based on a $9 billion commitment."

Anonymous said...

I would also point out that almost anything counts as "investing" the required amount of money. The manufacturing equipment for example will likely come from somewhere other than Wisconsin and will be moved when Foxconn leaves for other locales. This reminds me of TIFF districts that always seem to never quite pan out and always need more loans and extensions of the tax deferred time periods. Right up until the bankruptcy.

Jake formerly of the LP said...

Also worth noting is that there only needs to be 10,400 jobs to keep all of the tax giveaways. And they can wait 10 YEARS to do that, and only need to keep that level of staffing for another 5. Here's the schedule.

Job thresholds, Foxconn
2018 260
2019 520
2020 1,820
2021 3,640
2022 5,200
2023 7,150
2024 7,800
2025 8,450
2026 9,100
2027-2032 10,400

Walker plans on being long gone before we ever have to get our money back.