GOP lawmakers hold hearing on $70 million deal for Kimberly-Clark but are short of votes

Patrick Marley , Molly Beck | Milwaukee Journal Sentinel

COLOMA – Republican lawmakers acknowledged Wednesday they remain short of votes for a $70 million incentive package for Kimberly-Clark Corp. as incoming Democratic Gov. Tony Evers said legislators should have resolved the issue long ago.

"It’s an important discussion — unfortunately it’s taken too long to get here," Evers told reporters. "We should have been talking about Kimberly-Clark months ago. What’s happening there is not something (that) just happened overnight."

Evers, who will be sworn in Jan. 7, also said he remains committed to his plan to put an additional $1.4 billion toward schools over the next two years, despite GOP opposition.

Some Republicans who control the Legislature hope to get approval for the Kimberly-Clark subsidies before GOP Gov. Scott Walker leaves office, but a contingent of GOP senators remain dead-set against it.

Senate Democrats also oppose the deal, leaving leaders shy of a majority.

"We’re working to see if we can find those votes, but we’re not there right now," Senate President Roger Roth (R-Appleton) said Wednesday.

Roth, a lead sponsor of the measure, told the Legislature's Joint Finance Committee at a hearing Wednesday that Walker would use his veto powers to tweak the incentive package if lawmakers get it to him — even though Walker said in September he would not do that.

Senators remain skeptical

Roth and other Senate leaders have not said how many more votes they need, but Wednesday's hearing made clear many senators remain skeptical of giving subsidies to a profitable company.

"I am not convinced that this is the right thing for the state to do," said Sen.Luther Olsen (R-Ripon).

RELATED: Rohrkaste gives Kimberly-Clark incentive bill 50-50 chance

RELATED: Scott Walker says Senate will vote to give millions to Kimberly-Clark after the election

RELATED: GOP Assembly Speaker Robin Vos threatens to take power away from Tony Evers before January

The push for Assembly Bill 963 comes as Republican leaders consider holding a lame-duck session to limit the power of Evers, the state schools superintendent who beat Walker in last week's election.

Evers said he hasn’t seen what kind of action Republican lawmakers plan to take and isn’t “in a position right now to say there’s a red line or a line in the sand” of action he wouldn’t tolerate.

Since losing, Walker has not said whether the Kimberly-Clark deal remains a priority for him or whether he would consider approving legislation curbing his successor's powers.

"The media wants to know why I haven’t spoken with them in a week," Walker wrote in a Facebook post on Wednesday. "The answer is simple: the decent thing to do is to let Governor-elect Tony Evers have his time to talk about his transition."

Senators during the lame-duck session could also consider confirming Walker appointees to various boards and commissions, locking them in place before Evers is sworn in. More than 150 appointments have yet to be confirmed, according to a list published by Wispolitics.com.

440 Kimberly-Clark jobs on the line

The Kimberly-Clark package is aimed at saving or creating 440 jobs in the Fox Valley at a plant that makes Depends undergarments and other personal care products.

RELATED: Kimberly-Clark wants Wisconsin to decide on incentives by Sept. 30 to keep plant open

RELATED: Arkansas official says his state can't match Wisconsin's $100M tax incentive package for Kimberly-Clark

Kimberly-Clark announced in January it planned to shed up to 5,500 employees and close or sell 10 plants worldwide. Among those targeted for closure are its facilities in Neenah and Fox Crossing, and Walker and lawmakers sought to save the Wisconsin jobs.

The company has said it will close the Neenah facility, which employed about 110 people earlier this year. It has left open the option of keeping open the Fox Crossing facility known as the Cold Spring plant that earlier this year had about 500 jobs.

The incentive package would save 388 jobs and allow the company to hire 52 more workers, for a total of 440 jobs, according to John Deitrich, vice president of global manufacturing for Kimberly-Clark.

"We know keeping the Cold Spring facility open would be good news for Neenah, the Fox Valley and the state of Wisconsin," Deitrich said.

Like most manufacturers in Wisconsin, Kimberly-Clark pays virtually no state corporate income tax. Under the incentive package, the state would give the company millions of dollars a year to keep the Cold Spring plant open.

RELATED: Republicans likely don't have the votes for Kimberly-Clark deal, GOP leader says

RELATED: High stakes: Huge consequences for Fox Cities if Kimberly-Clark closes two plants

Your browser does not support the video element.

An estimate from the nonpartisan Legislative Fiscal Bureau found the deal could cost the state more than $100 million over 15 years, but that was based on a plan that would have kept both plants open and preserved 610 jobs.

The latest plan would cost about $70 million over 15 years because it would protect fewer jobs than originally envisioned, according to Neenah Mayor Dean Kaufert.

Modeled on Foxconn incentives

The Kimberly-Clark package is modeled on one given last year to Foxconn Technology Group of Taiwan for a plant it is building in Mount Pleasant. Under that deal, Foxconn is getting up to $4 billion in state and local incentives for a facility that could employ as many as 13,000 workers.

If Kimberly-Clark continued to operate in northeastern Wisconsin, the state would cover 17 percent of qualifying wages paid to workers and also pay 15 percent of any factory upgrades.

The Assembly in February passed the measure. If the Senate approves the deal without changes, it will go to Walker for final approval.

Assembly Speaker Robin Vos (R-Rochester) said in August that Walker would use his veto powers to strike out a portion of the incentive package so that it required Kimberly-Clark to keep just one plant open, instead of two.

'There’s no vetoes. There’s no changes'

Walker in September insisted that wasn't the case and told reporters, "There’s no vetoes. There’s no changes."

But on Wednesday, Roth told the Joint Finance Committee that Walker would issue a line-item veto on the legislation after all if it gets to him.

"His administration has told me they will take care of that at that time," Roth said.

Mark Hogan, who was appointed by Walker to lead the Wisconsin Economic Development Corp., confirmed Walker was considering vetoes but did not tell the committee why Walker was taking a different approach than the one he said he would in September.

Three Republican senators — David Craig of the Town of Vernon, Chris Kapenga of Delafield and Steve Nass of Whitewater — oppose the deal. That's enough to sink the deal without Democratic support and no Democrat has shown support for the bill as written.

Republicans control the Senate 18-15. Their majority will grow to 19-14 when new senators are sworn in in January.

Senate Democrats have expressed deep skepticism of the bill, but some have said they might consider it if Republicans were willing to broaden it to help others in the papermaking and forest products industry. During the campaign, Evers struck a similar tone but said Wednesday he wasn't taking a position on the bill.

“As a state we have to come around to this issue around Kimberly-Clark,” he said. “It isn’t just about K-C; it’s about the entire papermaking (industry) in the state."

"We need to have a comprehensive strategy for all our employers, all our unions and all our workers in the state. It just doesn’t make sense — we just can’t be jumping from one company to another trying to save one company and then another will come down the block.”

Separately, he said he remains committed to his education plan despite GOP doubts about it.

“My goal is to go forward with the budget I have,” Evers told reporters after speaking to high school students at an event at an Operating Engineers training center in Coloma. “Obviously there’s always some give and take there, but I believe the budget’s reasonable, it’s going to be property tax neutral, which is important."

Conservative groups oppose deal

Conservative groups have come out against the deal.

"Government shouldn’t pick winners and losers," said a statement from Collin Roth, a policy analyst with the Wisconsin Institute for Law & Liberty. "The market and consumer choice ought to determine the destiny of businesses, not politicians."

"The proposed ‘pay-to-stay’ incentives package is a bad idea and it’s poor public policy," said a statement from Brett Healy, executive director of the MacIver Institute. "It makes no sense to use taxpayer money to convince a company to retain workers when Wisconsin’s unemployment rate remains at an all-time low."

Others showed support for the deal, including local officials, company representatives and union leaders who represent Kimberly-Clark workers.

"I hope we can make this happen," said Sen. Alberta Darling (R-River Hills), co-chairwoman of the finance committee.

Patrick Marley reported from Madison and Molly Beck from Coloma.