Wisconsin board approves $3 billion Foxconn contract terms
MADISON, Wis. (AP) — Wisconsin’s economic development board approved the key terms of a contract Wednesday implementing a $3 billion incentive package for a Foxconn Technology Group plant in the state, including a personal guarantee from the company’s leader to protect state taxpayers.
The deal calls for Foxconn Chairman and CEO Terry Gou to personally guarantee one-fourth of any potential payback if the company fails to meet investment and employment benchmarks.
Gov. Scott Walker and Foxconn officials planned to sign the contract Friday in Racine. The deal ties hundreds of millions in tax credits to the number of jobs the Taiwanese electronics giant creates at the facility each year. It also allows the state to recoup the money if the company fails to meet the benchmarks, key provisions sought by critics of the subsidy.
The Wisconsin Economic Development Corporation’s board approved a staff summary of the contract on an 8-2 vote during a closed-door meeting. Approval of the summary authorizes agency officials to complete the deal.
“The fine line was to balance the needs of the company and the needs of the state,” WEDC chief executive Mark Hogan said after the vote.
Foxconn officials want to build a $10 billion flat-screen manufacturing plant in Mount Pleasant, about 25 miles (40 kilometers) south of Milwaukee. The company has said the facility could employ between 3,000 and 13,000 people.
Walker signed a bill in September providing Foxconn with the unprecedented incentives package. It provides the company nearly $3 billion in refundable tax credits from 2018 until 2032, including $1.5 billion in payroll tax credits, up to $1.35 billion in credits on expenditures for fixed assets such as land and buildings and $150 million in sales tax exemptions on construction equipment. It also allows the company to build on wetlands and waterways.
Foxconn would qualify for the full amount of incentives only if it invests $9 billion and employs 13,000 people, according to the terms the board approved Wednesday.
Democrats have complained that Walker was giving away too much to a foreign company without sufficient guarantees that the jobs would materialize and that the credits couldn’t be recouped if Foxconn doesn’t perform.
State Sen. Tim Carpenter and state Rep. Dana Wachs, both Democrats, were the only board members who voted against the terms.