MADISON, Wis. (AP) — The Wisconsin Senate was poised to approve nearly $3 billion in cash payments for Taiwan-based Foxconn Technology Group on Tuesday, an unprecedented incentive package for the electronics company to locate a flat-screen factory in the state.
The proposed subsidy would be the largest ever from a U.S. state to a foreign company and 10 times bigger than anything Wisconsin has extended to a private business. It would take at least 25 years for Wisconsin to see a return on its investment, the nonpartisan Legislative Fiscal Bureau estimated.
Foxconn would receive $2.85 billion in cash payments over 15 years if it invests $10 billion in the state and employs 13,000 people. It could also qualify for $150 million in sales tax exemptions for construction equipment.
The Assembly, which like the Senate is firmly in GOP control, takes a final vote Thursday. The bill then goes to Gov. Scott Walker, who led negotiations on the deal and has a deadline to sign a bill by the end of the month.
Critics, including Democrats who don't have the votes to stop it, say state taxpayers are giving up too much. They also question whether the state economic development agency, which has had trouble tracking much smaller projects, will be able to properly verify that the required investments are made and jobs created.
Senate Democrats were pushing changes to the bill Tuesday they said would prioritize Wisconsin workers and businesses, protect taxpayers from overpayments to Foxconn and increase environmental oversight. None were expected to be adopted.
"There needs to be a hammer if Foxconn doesn't do what it promises to do, taxpayers can get their money back," said Sen. Jon Erpenbach, of Middleton, during debate.
Republican Senate Majority Leader Scott Fitzgerald said some requirements placed on Foxconn, such as job-creation thresholds to receive taxpayer payments, will be negotiated in the final contract with the state which has not yet been signed.
Walker and other supporters say Foxconn is giving the state a once-in-a-lifetime opportunity to get a foothold in the world electronics market. Foxconn is the largest contract maker of electronics, best known for making iPhones, but with a long list of customers including Sony Corp., Dell Inc. and BlackBerry Ltd.
The Wisconsin plant would be the first outside of Asia to construct liquid crystal display panels for televisions, computers and other uses. Foxconn wants to open the factory by 2020 and initially employ 3,000 people.
Environmental groups and others concerned with waiving certain state regulations to speed construction of the plant have been threatening to file lawsuits. Foxconn would be allowed to build in wetland and waterways and construct its 20-million-square-foot (1.86-million -square-meter) campus without first doing an environmental impact statement.
Under the bill up for a vote Tuesday, Foxconn would enjoy a direct path to the Wisconsin Supreme Court on any legal challenges, skipping the state appeals court. The high court is controlled 5-2 by conservatives.
Foxconn was eyeing locations in Racine and Kenosha counties in southeastern Wisconsin, in between Milwaukee and Chicago. On Monday, the mayor of Kenosha sent a letter to Walker saying the bill didn't do enough to make it possible for the city to support the project, leaving Racine County as the likely home to the factory, although no exact location has been announced.
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