Wisconsin EDC says Foxconn cannot get tax credits without new contract

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(The Center Square) – The state of Wisconsin is continuing to take a hard line on Foxconn and the billions of dollars in state tax credits the company thought it was receiving.

The Wisconsin Economic Development Corporation said in a letter Monday Foxconn will not get any tax credits for it’s being-built plant in Mt. Pleasant until the company agrees to a new contract with the state.

“Foxconn’s activities and investments in Wisconsin to date are not eligible for credit,” WEDC Secretary Missy Hughes said in the letter.

Hughes said Foxconn’s decision to shrink the size of its plant led to WEDC’s decision to refuse the company tax breaks.

Foxconn’s deal, signed under Gov. Scott Walker, promised up to $3 billion if Foxconn met its jobs and construction goals.

Foxconn has fallen short of all of those goals, but the company said it had hired enough people by the end of 2019 to qualify for some tax incentives.

Hughes, in her letter, said that is not enough. She wants either a new contract, or she said Wisconsin could take back some of the money already paid to Foxconn.

“Markets, opportunities and business plans can and often need to change,” Hughes said in her letter. “I have expressed to you my commitment to help negotiate fair terms to support Foxconn’s new and substantially changed vision for the project.”

Hughes added that once a new contract is signed for the smaller plant in Mt. Pleasant, WEDC can get back to the business of determining how much taxpayer money Foxconn may receive.

“Once Foxconn is able to provide more accurate details of the proposed project, such as its size, scope, anticipated capital investment, and job creation, WEDC would be able to offer support for the project with tax incentives as it does for many large and small Wisconsin businesses,” Hughes wrote.

Foxconn was promised as a next-generation manufacturer to make large LCD screens. Foxconn, however, shifted those plans and is now looking to create screens for cell phones and tablets.

Foxconn promised 13,000 jobs when ground was broken on the project in 2017. As of its last filing with the state last year, Foxconn had hired 520 full time employees.

The top Democrat in the State Assembly, Rep. Gordon Hintz, D-Oshkosh, on Monday blamed Republicans for allowing Foxconn to change its plans.

“Republicans lawmakers should be held accountable for the fact that over $1 billion of public money has already been spent to date on a project not compliant with the signed contract,” Hintz said in a statement.

A spokesman for Wisconsin Manufacturers & Commerce, the state’s largest business group, said they hope Foxconn continues to stay and grow in Wisconsin. But WMC didn’t offer a comment on the state’s decision, or a possible new contract for Foxconn.

By Benjamin Yount | The Center Square
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Reposted with permission

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2 Comments

  1. God forbid that $800MM in federal funds completed I94 South project instead of WI transportation $$$.

    All of the state money is in the form of tax abatements so there is by definition zero cost to them as if Foxconn was not here the economic activity being taxed would not exist.

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