Wisconsin offered Foxconn more than Virginia, New York did for Amazon
The bundle of financial incentives Wisconsin offered to lure Taiwanese technology giant Foxconn's first major U.S. plant is larger than what New York, Virginia and Tennessee collectively offered to Amazon for far more jobs, a comparison of the two development projects shows.
Foxconn has said its $10-billion factory in southeastern Wisconsin will create up to 13,000 jobs that pay an average annual wage of $53,000.
The value of tax credits and breaks that Wisconsin has pledged for the project totals at least $3 billion, according to the Wisconsin Economic Development Corporation, a public-private agency that helped assemble the package. (Per the contract, the state will halt some payouts if the company does not deliver on those promises.)
Racine County and the village of Mount Pleasant, where factory construction is underway, have added extra infrastructure perks projected to cost $764 million, according a spokesman for Mount Pleasant.
Meanwhile, Amazon announced this week that New York, Virginia and Tennessee would split 55,000 positions with average salaries of $150,000.
Amazon is setting up new headquarters in New York's Long Island City and Virginia's Crystal City and a new operations center in Nasvhille, Tenn. The New York and Virginia facilities are poised to get 25,000 jobs each, and the Tennessee location will see 5,000 jobs.
The three states chosen for Amazon's satellite offices in total pitched roughly $2.4 billion in subsidies and investments. Amazon could qualify for additional tax breaks for its Long Island City campus, analysts say, but those incentives aren't specific to one company. New York and Virginia could also up the company's reward if it exceeds the initial target of hires. (Amazon's chief executive, Jeff Bezos, owns The Washington Post.)
In any event, it appears Foxconn is receiving a far more generous subsidy package than Amazon.
Mark Maley, communications director for the Wisconsin Economic Development Corporation, defended the contract with Foxconn Thursday, saying it remains a "game changer for the state of Wisconsin" that will attract more technology talent and bolster the future workforce.
President Donald Trump and Gov. Scott Walker jointly announced the Foxconn deal at the White House last year, describing it as an economic victory. Wisconsin beat out six other states to secure the contract with billions in state income tax credits and sales tax breaks over a 15-year period. Officials said at the time the project would generate 22,000 indirect jobs on top of the 13,000 that Foxconn promised. The state's nonpartisan Legislative Fiscal Bureau forecast the deal wouldn't generate profits for Wisconsin until 2042, sparking criticism from liberals who felt Walker hurried the deal for a better shot at reelection.
He lost his race this month to Democrat Tony Evers, who has called the Foxconn deal a "Hail Mary pass on the part of the governor."
Views among residents vary, according to the latest poll from the Marquette University Law School: 46 percent of registered voters said they think the state is overpaying Foxconn, while 40 percent said the plant will deliver at least as much value as Wisconsin's investment. And the contrast with the high-profile Amazon deals has irked some Wisconsin residents.
"Comparing the two packages makes the Amazon deal look much more reasonable," said Dennis Wiser, 68, a school board representative and former interim mayor of Racine who identifies as politically independent.
Economist Tim Bartik, who tracks state incentive packages at the W.E. Upjohn Institute for Employment Research, said his data show that Wisconsin offered incentives 12 times higher than the national average, while New York maintained its usual course of bigger-than-normal subsidies and Virginia clinched a significantly cheaper deal than states often do.