Budget Update: How to Proceed On Foxconn Bill Divides Senate, Assembly, Budget Still Stalled

Sen. Fitzgerald

With passage of the 2017-19 state budget now more than a month overdue, the Republican leaders of the state Senate and Assembly have found another thing on which they don’t agree:  how to move forward with Governor Scott Walker’s proposed special session legislation to provide tax and other incentives to close the deal to bring Taiwan-based tech giant Foxconn to Wisconsin.

Senate Majority Leader Scott Fitzgerald (R-Juneau) is urging lawmakers to pass the state budget bill before voting on Foxconn legislation, while Assembly Republican leaders, including Assembly Speaker Robin Vos (R-Rochester) , want lawmakers to take up the Foxconn bill before passing a new budget.

Speaker Vos

The Assembly Committee on Jobs and the Economy will hold a hearing on the Foxconn bill tomorrow (Thursday 8/3, see hearing notice). Committee chair Rep. Adam Neylon (R-Pewaukee) says he plans to advance the bill out of committee by next Tuesday (8/8).  Assembly leaders, including Speaker Vos, say they would like the full Assembly to vote on the measure in mid-August.

The proposal would offer the Taiwanese tech giant $3 billion in incentives to build a liquid-crystal display manufacturing campus in southeast Wisconsin.  That facility initially would initially employ 3,000 workers but that number could grow to 13,000 over time, Foxconn and state officials have said.

The Wisconsin State Journal reports that, “under the state’s manufacturing and agriculture tax credit, Foxconn–even before the job incentives–would pay almost no income tax, meaning the state tax credits largely would be paid in cash to the company.”

That same Wisconsin State Journal story also reported that an economic impact analysis commissioned by Foxconn suggests the state could pay out as much as $74 million a year more in tax credits than it would collect in new tax revenue from the project.

Sen. Fitzgerald, whose members caucused on the bill behind closed doors yesterday, says Republican senators believe completing the stalled state budget should be a higher priority than moving forward on the Foxconn deal.

“We had that discussion about what do we focus on and the caucus is united on the idea that it’s the state budget,” Fitzgerald said. “We gotta get the budget done.”

Fitzgerald argues his members need more time to sufficiently analyze the impact of the proposal on state finances, saying, “Until you have any analysis from Bob Lang,” who heads the nonpartisan Legislative Fiscal Bureau, “it’s pretty hard to even judge the bill.”

Assembly Speaker Robin Vos, whose members also caucused on the bill yesterday, told reporters, “The biggest priority is making sure that we have Foxconn moving along.  The sooner we are able to do our due diligence on the legislation, the sooner they are able to choose a site and hopefully begin construction, start employing people and get money into the pockets of everyday Wisconsinites.”

For his part, Gov. Scott Walker told reporters he is confident he can persuade legislative leaders to take up both the budget bill and the Foxconn bill at the same time.   He declined to say whether he would revise his last offer to the Legislature regarding transportation funding in light of the inclusion of $252 million in general fund supported borrowing  in the Foxconn bill .  That borrowing would fund expansion of a key stretch of I-94 near the expected plant site.