Evers’s new agreement with Foxconn to save Wisconsin taxpayers billions - Paycheck

Evers’s new agreement with Foxconn to save Wisconsin taxpayers billions

On April 20, Governor Tony Evers announced that he had struck a new deal with Foxconn Technology, a Japanese tech company, over their Mount Pleasant, Wis., project. The project has lagged and changed repeatedly since former Governor Scott Walker’s administration struck the original agreement, in which the company was required to manufacture liquid crystal display screens. Evers’s new agreement will save Wisconsin taxpayers $2.7 billion.

            In a press release from the Governor’s Office, Dr. Jay Lee, vice chairman and board member of Foxconn Technology Group, said the board is near a resolution with the Wisconsin Economic Development Corporation (WEDC). “In response to unforeseeable economic conditions, Foxconn began formal negotiations with a desire to lower taxpayer liability in exchange for the flexibility to pursue business opportunities that meet market demands,” Lee stated.

            Wisconsin Examiner reported on April 21 that the revised agreement would change in several ways:

  • Foxconn will qualify for tax credits worth as much as $29 million in 2020 as long as it reaches revised targets;
  • the credits will include up to $2.2 million for jobs created;
  • the credits will include almost $26.9 million for capital investment at the plant in Mount Pleasant;
  • Foxconn’s hiring goals will be sharply reduced but cut state costs if Foxconn meets benchmarks;
  • Foxconn is free from its original business plan to qualify for state incentives.

What does this mean in jobs and dollars? Originally, Foxconn had promised 13,000 new jobs and $10 billion in capital investments by the close of 2032. In exchange, it would receive state tax credits worth $2.85 billion. The original plan required the plant to manufacture Generation 10.5 standard liquid crystal display screens.

Evers’s new agreement runs through 2025, and has set the benchmarks—and the rewards—much lower. The revised contract may give Foxconn up to $80 million in tax credits, which is less than 3 percent of the original figure. In exchange for those credits, Foxconn must create 1,454 jobs and make $672 million capital investments to the site. These open-ended technology-manufacturing jobs will pay on average $53,875.

What if the company defaults on the bargain? The state can regain 100 percent of the benefits it provided. Wisconsin and the local government have already spent more than $1 billion in land acquisitions, road improvements, and infrastructure.

“The amended terms in the agreement are based on Foxconn’s current projections for digital infrastructure hardware products through 2025,” a Foxconn statement read.

            “Under the old agreement with Foxconn, Wisconsin taxpayers were on the hook for billions for a project that clearly wasn’t meeting goals,” Evers said in an April 20 Facebook post. “I’ve always believed we can find a solution that protects our tax dollars while continuing to support economic development. Our new agreement reflects the reality of Foxconn’s project in Mount Pleasant and saves Wisconsin taxpayers $2.7 billion.”

Georgia Beaverson

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