Wisconsin Senate OKs up to $3 billion bill for Foxconn plant as Kenosha drops out of hunt

MADISON – The state Senate on Tuesday approved a multibillion-dollar subsidy bill for a massive flat-screen plant even as Kenosha dropped its bid for the factory and its thousands of potential jobs.

GOP senators passed the bill on a near party-line 20-13 vote, sending it to the Assembly for a second and final vote in that house on Thursday. Sen. Bob Wirch, who represents Kenosha and Racine, cast the lone Democratic vote in favor of the proposal and Sen. Rob Cowles of Allouez cast the lone Republican vote against.

Kenosha's decision followed news Friday that the Foxconn Technology Group of Taiwan is in final negotiations with officials in Racine County about locating the liquid crystal display plant there along with its up to 13,000 jobs. In a statement, the company responded by saying that it would continue to work on this project and a "series of U.S. investments."

GOP senators touted the deal to pay up to $2.85 billion in cash to Foxconn to help subsidize the building of an up to $10 billion plant, saying that the company would have to spend money of its own to get the state payments.

"If Foxconn doesn't build, they don't get the (tax) credits. If Foxconn doesn't hire employees, they won't get the credits," said Sen. Frank Lasee (R-De Pere). "The only way we as taxpayers end up paying for this is if they actually deliver."

The deal would bring LCD manufacturing back to the United States from Asia, Republicans said.

"We are bringing cutting-edge technology to our hemisphere, to our country and to our state," said Sen. Van Wanggaard (R-Racine).

But Democrats pointed out that the state could pay a substantial amount of cash and still end up with fewer jobs than promised under the deal. The deal is more than 10 times as big as any previous state subsidy to a private project in Wisconsin.

Senate Minority Leader Jennifer Shilling (D-La Crosse) said that Foxconn executives cut a deal with Gov. Scott Walker but didn't go before legislative committees to answer questions about it.

"If you are asking 5 million taxpayers — hard-working taxpayers — for $3 billion, I think that's the least you can ask," said Shilling, who pointed to Kenosha's withdrawal as another reason to be wary of the Foxconn project.

In a statement, Foxconn said: “We thank lawmakers in the state Legislature for their endorsement of this project to bring our state-of-the-art advanced display manufacturing campus and thousands of jobs to Wisconsin."

The Kenosha decision could strengthen the hand of Racine County officials in Foxconn talks but could also complicate efforts to sign on holdout property owners there and assemble a huge tract of land for the plant.

In a statement, Foxconn officials said they were disappointed by Kenosha's decision but would continue to "collaborate with local partners who are interested in working with Foxconn."

"This project is just the first in a series of U.S. investments that Foxconn intends to make, and we will be looking for local partners to join us as we create jobs and economic growth through our American facilities," the statement reads.

In a letter first reported on by the Milwaukee Journal Sentinel, Kenosha Mayor John Antaramian wrote Gov. Scott Walker on Monday to say that his city could not pursue the project without further changes to state law.

In a news conference Tuesday at his office, Antaramian said he told Foxconn on Friday that he was walking away from the deal. The mayor cited concerns about a boundary agreement for a site near I-94; limits within state law on city spending on services such as public safety; and potentially higher sewer and water fees for current homeowners.

"This is a massive project that is water intensive and land intensive," said Antaramian, who declined to say how much the Foxconn project would have cost Kenosha. "You're talking about creating a small village unto itself. It's a massive amount of people, a massive amount of infrastructure. We need fire and police to deal with it."

RELATED: Foxconn subsidies could mean heavy borrowing for local municipalities

Antaramian said he still supported the project happening in nearby Racine County and would reconsider his stance about Kenosha if that option fell through and lawmakers made changes to the bill.

"But at this time I don't believe that will occur," he said.

Walker spokesman Tom Evenson said the governor, who is on a trade mission this week to Japan and South Korea, is "thrilled that 13,000 good-paying, family-supporting jobs will be coming to Wisconsin."

"It appears as though the City of Kenosha’s leadership decided to send a letter after stories last week suggested the campus will be in Racine County," Evenson said.

For her part, Sen. Alberta Darling (R-River Hills) said she was not surprised by Kenosha's decision and did not think it would hurt the chances of passing the incentive package in the Senate.



"They weren't going to get it anyway," Darling said of Kenosha.

Racine and Kenosha counties had been competing for months for the Foxconn plant, but insiders like Darling had long seen Racine County communities like the village of Mount Pleasant as having an edge.

Antaramian's decision appeared to come after or around the time his city had effectively lost the competition and also reflected the fact that he had been more aggressive than Racine County officials about asking for changes to state law to accommodate the project.

The Journal Sentinel reported last month that the sheer size of the Foxconn development could challenge locals officials seeking to provide the necessary infrastructure and services without raising property taxes on existing homeowners.

Wanggaard, the GOP senator, responded to Antaramian with his own letter Tuesday, saying that he and his fellow GOP lawmakers had taken several steps to address Kenosha's concerns.

"It is disappointing that you have decided to turn your back on housing thousands of jobs in your city at the last minute, but that is your prerogative," Wanggaard wrote to Antaramian.

In the Senate Tuesday, an amendment by Majority Leader Scott Fitzgerald (R-Juneau) tweaked the minimal job requirements for the up to $1.35 billion in the Foxconn bill that will help offset the company's investment in the plant and equipment. Fitzgerald's amendment, which was approved by Republicans, would leave the establishment of exact job creation targets for that money to the Walker administration.

The bill would also exempt the project from certain state rules to protect wetlands and waterways — provisions that environmental groups have threatened to challenge in court.

"We're going to turn in our environmental soul today," Sen. Jon Erpenbach (D-Middleton) said.

The proposal would also have allowed appeals of lawsuits over the Foxconn development to skip the state Court of Appeals and go from a trial court directly to the Supreme Court, which is controlled by conservatives.

A second Fitzgerald amendment approved Tuesday would expedite appeals over Foxconn litigation but still leave the Supreme Court with the decision on whether to take a direct appeal.

However, that amendment from Fitzgerald would still require the automatic suspension of trial court rulings on Foxconn litigation until a higher court had weighed in. Democrats and at least one conservative have questioned whether this automatic stay is an unconstitutional intrusion on the authority of the state’s judicial branch.

Jason Stein and Patrick Marley reported for this story in Madison, with Meg Jones in Kenosha.