5 fact checks on Foxconn and Wisconsin's $3 billion deal
Now that some of the dust has settled since President Donald Trump, Gov. Scott Walker and Foxconn chairman Terry Gou appeared together, let’s review from a fact-checking perspective what we know about the $3 billion-for-13,000 jobs Wisconsin-Foxconn deal.
We’ve done five fact checks since the announcement at the White House that Foxconn, a Taiwanese company perhaps best known for making iPhones, plans to build a massive manufacturing plant in Wisconsin.
One thread that runs through all five:
Wisconsin has said it will offer Foxconn up to $3 billion in incentives, and Foxconn has said it plans to create up to 13,000 jobs.
But as yet, there is no written agreement in which Foxconn commits to any number of jobs.
Walker says: "Foxconn is bringing 13,000 high-tech jobs to Wisconsin."
Leaving aside the term "high-tech," Foxconn is a long way from even breaking ground on a plant that was only announced the same day Walker made his statement. And the company itself has been more measured, saying the planned plant initially will create 3,000 jobs, "with the potential to grow to 13,000 new jobs."
But the 13,000 is more than talk. Foxconn is pledging a $10 billion investment and the state is offering $3 billion in incentives, with $1.5 billion aimed at the creation of 13,000 jobs.
One Wisconsin Now says Walker "wants state taxpayers to dole out up to $250 million annually in incentives" to Foxconn "to lure a manufacturing plant to Wisconsin that he claims will generate $181 million in tax revenue."
Walker does want to offer $200 million to $250 million per year over 15 years in incentives in order to get Foxconn to put its plant in Wisconsin, and the estimate is that the project will produce $181 million per year in tax revenue.
But what’s left out of the statement is that Walker and others are pursuing the deal in large part because the massive development is expected to generate other new businesses, new housing and other economic activity that will, in turn, produce even more tax revenue.
One Wisconsin Now says Wisconsin's $3 billion incentive offer to Foxconn is "the largest gift ever by a state to a foreign company."
The $3 billion wouldn’t be given -- it would be paid, in increments, based on how much Foxconn spends on capital investments and payroll.
But the only compilation of government subsidies we found shows that the Foxconn offer would exceed the highest subsidy provided to a foreign company -- $1.65 billion in 2012, made by Pennsylvania to Dutch Royal Shell, based in The Netherlands.
State Rep. Melissa Sargent, D-Madison, says that on the Foxconn deal, "3,000 jobs cost #WI taxpayers more than $3 billion in tax giveaways. Break it down: more than $1 million in taxpayer dollars per job."
The per-job cost could never reach $1 million if only 3,000 jobs are created; the full $3 billion would be paid only if 13,000 jobs are created.
State Senate Minority Leader Jennifer Shilling, D-La Crosse, says: "Foxconn tax break could exceed $1 million per job."
If Foxconn invests at least $9 billion in its plant as it has said it will -- but hires only 1,500 workers, not the 13,000 it says there are potential for -- the incentives paid would exceed $1 million per job.
That being said, while there is not yet a commitment that Foxconn will create a minimum number of jobs, there is also no evidence that the total would be only 1,500 jobs if it invests $9 billion in its plant.