State Superintendent of Public Instruction Tony Evers, a possible Democratic candidate for governor, is going all-in against the proposed deal with Foxconn to bring a $10 billion production facility to southeastern Wisconsin. In a fundraising email to supporters sent July 27, the day after the details of the Foxconn agreement were released, Evers wrote:
Foxconn is looking to build their new factory in Southeast Wisconsin. We welcome every new job that comes to Wisconsin.
But the devil is in the details.
Foxconn is asking for up to $3 billion in state tax incentives in order to build their factory here. A quick calculation shows that’s more than $230,000 in tax incentives for every one of the 13,000 jobs they’ve promised to create.
Today, Bloomberg BusinessWeek estimates that Wisconsin taxpayers could end up paying as much as $1 million per job, when all the specifics are fully revealed.
Scott Walker has a long track record of grand job promises with expensive government incentives. They didn’t pan out – and Wisconsinites were stuck with the bill.
Will you support strong leadership in Wisconsin? Wisconsin deserves elected officials who fulfill their promises without overburdening taxpayers with exorbitant costs >>>
Foxconn has a troubling history of making other states pay dearly for the jobs they create.
With so much at stake for our kids and the budget still not done, we must hold Scott Walker accountable on the details of the Foxconn announcement. Jobs must come at a reasonable cost to taxpayers, and not at the expense of our kids.
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(Multi-formatting of color, bold and underlining in the original.)
Apparently math and reading comprehension are not required skills for the head of the state Department of Public Instruction. The article by Tim Culpan that Evers cites misstates the number of jobs to be created, claiming 3000 jobs instead of 13000 jobs, and so the “$1 million per job” figure is completely off. Evers should have caught that error before using Culpan’s article as a source of information, but the $1 million per job was just too good for Evers to check.
(Culpan also claims that the $3 billion in state tax credits for Foxconn would be enough to purchase an iPhone for every resident of Wisconsin. The tax credits are over a 15-year period. If Culpan is taking 15 years to pay off his iPhone, he shouldn’t be writing for financial websites.)
The actual amount per job at the Foxconn facility is $15,384.62 annually. The average pay for those jobs will be $53,875 per year plus benefits. Total annual payroll is expected to be $700 million compared to the estimated $200 million to $250 million in annual tax credits.
Evers also uses $230,000 per job, but that’s over 15 years. In that same 15-year period, the average worker at the Foxconn facility will earn $808,125.
These figures don’t include the 10,000 construction jobs and the resulting 6,000 indirect jobs over the next four years, nor does it include the 22,000 indirect and induced jobs after construction is completed.
Another way to look at the tax credit subsidy, Wisconsin will give $3 billion over 15 years. The Foxconn investment of $10 billion to construct a manufacturing facility will result in $7 billion in annual economic activity, or $105 billion in economic activity over the 15 years of the $3 billion in tax credits, a net $102 billion for Wisconsin.
In an ideal world, states wouldn’t have to offer economic incentives to attract such large-scale industrial investments. But in an ideal world, Democratic candidates for governor wouldn’t be financially illiterate. When they’re also in charge of the state’s public education system, it’s no wonder we have unaccountable failing public schools. Evers deserves a failing grade for this fundraising email.