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View from around the state: Foxconn tax credits shouldn’t be held hostage

— From the Racine Journal Times

If a company comes into your state and says it will create 13,000 jobs making screws, then turns around and says it will make bolts instead, who cares?

What does matter is that those jobs are created. That is what the company should be held accountable for.

In this case, we are not talking about screws and bolts, we are talking about liquid crystal display screens and other 21st century technology that Foxconn is on the forefront of.

When it was announced that Foxconn was coming to Wisconsin, the agreement was that the company would create up to 13,000 jobs with an estimated average salary of $53,875 over a period of up to six years.

The company won’t be eligible for state incentives if it doesn’t fulfill its job-creation and investment promises.

Last year, the company didn’t have enough qualified full-time employees and it didn’t get the tax credits. That is how the agreement was supposed to work.

(Photo by Kevin Harnack)

(Photo by Kevin Harnack)

This year, the company says it has enough qualified full-time employees. But the Evers administration is continuing to say that the company cannot get hiring tax credits unless they change the agreement to reflect what technology will be made in Mount Pleasant.

The state contends that because the facility has changed from a Gen. 10.5 to a Gen. 6, and work is being done on the property in Mount Pleasant by Foxconn Industrial Internet — which was not one of the companies that signed the agreement — that the contract should be amended to reflect those details.

Joel Brennan, secretary of the Department of Administration, said in an interview with The Journal Times that it is in Foxconn’s best interest to amend the contract to receive the tax credits.

“From a legal standpoint, the state cannot certify tax credits for the project and what they’re doing right now,” Brennan said. “We need to bring that into alignment and it’s in everybody’s best interest to come to an understanding to how we do that.”

Should the state award Foxconn tax credits without revising its contract?

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Foxconn did approach the state originally to amend the contract and the state appears to be engaging with the company. But the tax credits shouldn’t be held hostage.

If it’s just about alignment, an addendum should be added and then development and incentives should continue as promised. But the dispute seems to be more political than anything.

If the governor backs down on promises because of a technicality, how does that look to other businesses wanting to move into Wisconsin?

Businesses have to adapt to market conditions. That means changing what products they manufacture based on demand and other economic factors.

It shouldn’t matter if Foxconn builds a Generation 6 plant, instead of a generation 10.5 plant. What matters more is that it builds it and hires workers.

Ever since Foxconn was announced, it’s been political. But jobs shouldn’t be political. Here in southeastern Wisconsin, Foxconn received bipartisan support because local officials understood that this development would be a game-changer.

Again if Foxconn falls through on its promises, it shouldn’t get tax credits. But the state shouldn’t give it reasons to leave the state. That is not good for anyone and will hurt the entire state in the long run.

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