Corporate welfare TRUMPS students in Wisconsin

The Overpass Light Brigade held this message in Milwaukee last Saturday night (Photo credit: Joe Brusky).

Welcome to Wisconsin, where a multinational corporation can walk away with billions of public dollars while our school children go without books and necessary supplies. What a stark contrast this month, as kids across Wisconsin head back to school and teachers are scrambling to get donations for their students and classrooms.

Why is it that when our public schools are starving there is no money to be found, but when a corporation like Foxconn wants to set up shop, Scott Walker and GOP legislators can find $3 billion almost overnight? If Republicans would spend half that amount of energy advocating for our public schools, every child would have class sizes small enough for one-on-one attention, comfortable classrooms with air conditioning, after school programs, modern technology, science labs, art classrooms, and libraries.

In 2012 alone, our public schools faced the largest cuts since the great depression and they have not recovered. Educators foot the bill for science project supplies, classroom furniture, glue, and paper. School budgets are so tight that districts are making difficult decisions about what programs to cut, maintenance projects to defer, and which front-line educator positions must go unfilled.

Walker and the GOP are throwing $3 billion at a shady corporation with a history of broken promises and workers’ rights violations. Foxconn owners compare their workers to animals and the very presence of their factories is synonymous with riots, workers suicides, and violence. Three billion dollars – and the return for our communities (if it happens) won’t even begin until 2045. Just imagine that kind of investment in education. We could invest in our public schools, reverse the teacher shortage, and give opportunities to every child.

The MTEA is for job creation. We are for family sustaining, safe, unionized Wisconsin jobs–none of which are guaranteed with the current Foxconn deal. The only thing that we know for sure is that it will take nearly an entire generation for Wisconsin taxpayers get back the money spent on this deal.

Instead of funding the Foxconn deal, let’s fund our public schools and educators that inspire creative writers, avid mathematicians, influential scientists, and the leaders of our next generation.

We need fully funded public schools, not corporate welfare.

Kim Schroeder
MTEA President

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Legislative Update – August 9

A kindergartener today will be about 37 years old by the time the state would possibly break even on tax breaks and government incentives for Foxconn, the foreign corporation proposing to set up shop in southeastern Wisconsin. Critics are asking whether some of those incentives could instead be used to strengthen community infrastructure across the state, including public schools. The latest on the Foxconn deal and state budget deliberations is below. To see education-related bills circulating, visit www.weac.org/budget.

Assembly may vote on Foxconn deal next week

The Assembly may vote on the Foxconn bill as early as August 17, leaders have announced.

Fiscal bureau says state won’t break even – possibly – until 2047

Democrats are demanding Republicans slow down deliberations on the Foxconn bill after a new Legislative Fiscal Bureau analysis found the state’s break-even point, at best, would be fiscal year 2042-43. That’s if the Taiwanese electronics manufacturer creates 13,000 jobs at a planned $10 billion facility. But it would be “well past” 2044-45 before the state reaped more tax revenue than the $3 billion it’s slated to dole out to the company if only 3,000 jobs were created.  

Questions arise on oversight of potential Foxconn deal

Red flags are being raised over the $3 billion government spending proposal for the Taiwanese corporation, as it would be overseen by a state agency with mixed results on tracking such awards and clawing back money from companies that default. The Wisconsin Economic Development Corporation (WEDC) would be tasked with awarding up to $1.5 billion in state income tax credits for job creation and another $1.35 billion for capital investment. That means WEDC will have to accurately track Foxconn’s job creation efforts, on which the agency has a spotty record. A state audit in May found WEDC was not certain about the numbers of jobs created or retained as a result of its awards. Along with troubles tracking job creation numbers, the agency has been inconsistent with efforts to “claw back” money awarded to companies that later eliminated jobs or outsourced them to other countries.

Details of the deal

The Foxconn bill would create two refundable tax credits, paid from a sum sufficient GPR appropriation. In addition, Foxconn would be able to claim 7.5% manufacturing and agriculture credit (MAC) on income from Wisconsin operations, and “it appears likely that most of the proposed tax benefits would be refunded to Foxconn and not used to offset its state tax liability,” analysis shows. The estimated payments of the credits would begin with $2.35 million in 2018-19, and would not end until 2034. (This assumes Foxconn’s zone employment will increase from 1,040 positions in the latter part of 2017 to 13,000 by 2021 and stay at that level with an annual average salary of $53,875).

The bill also includes incentives to keep a southeastern Wisconsin firm called Fiserv in the state. These taxpayer-funded incentives would total $2 million annually from 2019-20- through 2023-24 for a total of $10 million, plus Fiserv would receive an additional $500,000 annually in capital investment credits.

Education Bills Introduced in Senate:

  • SB-382 School Employee Tuberculosis Screening (Olsen, Luther) Screening school district employees for tuberculosis. Referred to Senate Education Committee
  • SB-383 School Aid Payments (Olsen, Luther) The payment of state aid to school districts and payments to operators of independent charter schools and private schools participating in a choice program or the Special Needs Scholarship Program. Referred to Senate Education Committee

Legislative Update – August 4

Special Session on Foxconn

The Foxconn special session bill (AU7 AB1) has been introduced, and Assembly Republicans held a hearing Thursday on legislation that could provide massive incentives for a planned Wisconsin plant. The Washington Post reports that the tax deal/incentives could cost the state $230,700 per worker. The Assembly Jobs and Economy Committee is expected to vote on the bill Thursday, August 10, and full Assembly may take up the bill by mid-August. Assembly leaders said the bill may not go to the Joint Finance Committee despite its fiscal price tag. After heavy criticism over the lifting of permitting and wetland restrictions in the bill, and the quick timeline, the governor weighed in saying there were “environmental protections” and that a few weeks for the Legislature to debate the legislation and the hefty price tag is “a pretty good amount of time.” Read more about the Foxconn deal.

Fiserv

Part of the special session bill also offers incentives to a company called Fiserv headquartered in Brookfield, which is looking to leave Wisconsin. The bill essentially allows the firm to continue to receive tax incentives even if it doesn’t grow jobs. In fact, it appears they could cut the workforce and still receive government incentives.

DPI Hearings

The Wisconsin Department of Public Instruction will conduct two public hearings on Aug. 21 related to the Assembly Education Committee’s Review of administrative rules and creation of rules related to whole grade sharing.

Foxconn Update From WisPolitics:

Neylon to delay committee vote on Foxconn bill to consider amendments

Rep. Adam Neylon tells WisPolitics.com he plans to push off an exec on the Foxconn legislation to consider amendments, including language that would seek to have the company give preference to Wisconsin vendors and workers. Neylon’s Jobs and the Economy Committee had originally planned to vote on the bill .

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Foxconn special session starts Tuesday amid growing pushback

Governor Walker on Friday called for a special session starting Tuesday on tax breaks and other incentives to bring a massive Foxconn plant to Wisconsin. The governor introduced a bill on Friday to implement the Foxconn Memo of Understanding that lays out expectations for the Taiwanese electronics maker to create up to 13,000 jobs over six years and for the state to provide up to $3 billion in incentives. The plant will be built in the Racine-Kenosha I-94 corridor.

Insiders say this will move fast, evidenced by GOP leaders calling for a public hearing already this week, with a done deal expected by late August.

Meanwhile, Democrats and others are raising questions about the deal.

In an op-ed in UrbanMilwaukee.com, Rep. Jonathan Brostoff of Milwaukee questioned whether $3 billion in state money and incentives could be spent in other ways to boost the state’s economy and improve our quality of life.

“If we are willing to spend billions of taxpayer dollars then let’s employ Wisconsin workers, fix every pothole in our state, hire community connectors and park staff, invest in renewable energy infrastructure, fully fund our world class university system, hire teachers for our schools, and invest in the success of small businesses across our state,” Brostoff writes.

Rep. Dave Hansen of Green Bay wrote in the newiprogressive.com that the state should be extremely cautious in any use of taxpayer dollars to lure Foxconn to the state, citing concerns that new technologies could eliminate any promised jobs.

“Given recent accounts of how its workers are treated and Foxconn’s strategy of getting every last nickel and dime it can from taxpayers to lower their costs, Governor Walker and any legislator thinking of supporting what could be a $3 billion incentive package should be very wary,” Hansen writes. “To do otherwise would be a serious case of legislative malpractice.”

By the way, the deal waives all environmental regulations and permits.

In a column on FastCompany.com, Greg LeRoy, executive director of Good Jobs First and author of The Great American Jobs Scam, says the Foxconn deal “exemplifies everything that’s wrong with our nation’s economic development system.”

“Even if the project creates all 13,000 jobs the politicians said it potentially could – and I find that absolutely not credible given how automated high-tech manufacturing has become – that means a cost of more than $230,000 per job,” LeRoy writes. “At that price, the deal is a sure loser for Wisconsin taxpayers. That’s because there is no way the typical Foxconn worker will pay $230,000 more in state and local taxes than she and her family will consume in public services over her work time there. At that price, the deal can only be accurately described as a transfer of wealth from Wisconsin taxpayers to Foxconn shareholders.”

Others have questioned whether Foxconn can be trusted to follow through on its promises, noting that it backed out of a major deal in Pennsylvania. Advocacy group One Wisconsin Now cautions that Foxconn “has a long history of over-promising and under-delivering on their claims of investments and job creation.”

“For example,” OWN says, “Pennsylvania is still waiting on hundreds of promised jobs created at a $30 million facility announced in 2013 that has yet to materialize. Are they really preparing to invest such huge sums in Wisconsin and create well paying jobs when they are lowering costs in factories in China by replacing workers making less than $4 per hour with robots?”

Foxconn jobs a boon for Wisconsin, but with $3 billion incentive deal, a steep tradeoff

Wisconsin taxpayers could pay a steep price for what state leaders call a “transformational” prize: a Foxconn manufacturing operation in southeast Wisconsin that the Taiwanese company says could eventually employ as many as 13,000. Last week’s Foxconn news was the rare announcement that won plaudits from both parties at the Wisconsin State Capitol.