State, local tab for Foxconn: $4.5 billion, Democratic leader says

All told, the massive Foxconn Technology Group project will cost state and local governments and utility ratepayers $4.5 billion, Rep. Gordon Hintz, the Democratic Assembly leader, said Tuesday.

In citing the figure, Hintz, of Oshkosh, pointed to a memo recently sent to him from the nonpartisan Legislative Fiscal Bureau.

But the bureau's analysis, prepared at Hintz's request, contains some qualifiers. Chief among them: The $408 million estimated cost to improve I-94 from Milwaukee into Kenosha County, which Hintz counts toward the $4.5 billion, is for work that isn't specific to Foxconn and has been planned since 2007.

The law providing state aid for Foxconn authorizes borrowing $252 million for the I-94 improvements. Adding interest payments on the debt through 2042 brings the estimated total to $408 million.

The Foxconn development probably sped up the state's funding for the I-94 work, the bureau said.

The fiscal bureau also said state funding for local road projects tied to Foxconn could cost about $134 million. In an email, Brett Wallace, director of the Wisconsin Department of Transportation's southeast region, said the estimate of the state's share for local road projects is about $100 million.

The state aid package includes $3 billion in tax credits and exemptions for Foxconn. The vast majority of that will come as direct cash payments by taxpayers to the company, because the credits will be due whether or not Foxconn owes taxes, and Wisconsin exempts manufacturers from almost all corporate and income taxes. 

Racine County and the Village of Mount Pleasant, meanwhile, will spend $764 million to support Foxconn's plans to build a 22-million-square-foot electronics factory that the company says could employ 13,000 people. Local officials have said that guaranteed property taxes by the company alone will generate enough money over time to pay off the $764 million, and they expect nearby development to generate still more tax revenue.

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In its memo, the Legislative Fiscal Bureau said the Foxconn development will impose additional costs on local governments that must provide expanded public services, and that taxpayers stand to bear some of the additional costs. Any potential tax hikes could be mitigated by the ability of Mount Pleasant, under the Foxconn law, to pay for increased fire and police protection out of new property tax revenue generated by the company, the bureau said.

The bureau's tally of state costs under the Foxconn law also includes $15 million for grants to local governments and $20 million for worker training and employment.

A proposed $140 million transmission line project intended to serve Foxconn would affect the rates of residential and other electric customers, the bureau said. It added that the cost "would be spread over a large number of consumers for up to 40 years, so the impact on individual ratepayers is not expected to be significant."

Supported by Republican Gov. Scott Walker and criticized by many Democrats, the Foxconn development has been highly politicized from the start.

In a statement, Hintz said the costs of the project "should alarm every Wisconsin family," and that Walker, in a bid for re-election is "selling Wisconsin's future for the Foxconn deal."

A Walker spokeswoman, meanwhile, said the project will "create 13,000 good-paying, family-supporting jobs," build one of the world's largest manufacturing campuses and "benefit our entire state for generations."

Jenny Trick, executive director of the Racine County Economic Development Corp., said the local incentive package is "an investment in our future," contains "extraordinary protections" for taxpayers and will be repaid through revenue generated by Foxconn's investment.