$10 billion investment. 13,000 jobs. $800 million annual payroll.
These are just a few of the many huge numbers that Governor Scott Walker and state leaders have touted since Foxconn Chairman Terry Gau, along with President Donald Trump, Speaker Paul Ryan, and Walker, announced that Wisconsin would be the site of the company's first major investment in the United States at the White House in July.
The investment does not come without cost to the state. The State of Wisconsin has agreed to $3 billion in various state incentives over the course of 15 years. While this is tied to job creation and the amount of capital investment, at its peak, the company could receive over $300 million annually in cash from state taxpayers. The Legislative Fiscal Bureau has calculated, with caveats that projecting this far into the future is not an exact science, that the state will recoup its investment in 2042-over 20 years after the company is expected to start manufacturing here.
While some decry the use of taxpayer dollars to lure large multinational corporations, this is, frankly, the way the game is played in 2017. Boeing was offered an incentive package in 2013 worth $8.7 billion just to retain the company's operations in Washington State. The State of Michigan offered General Motors a $2.3 billion package in 2009 to save 1,200 jobs. Also, Wisconsin was not the only state vying for Foxconn's investment. If not Wisconsin, another state would have given the same package.
Legislative and business leaders highlight the game-changing effect this can have on the state. In addition to the 13,000 direct Foxconn jobs, it is projected that 22,000 indirect jobs will be needed to support the iPhone manufacturer. The direct jobs at Foxconn will have an average annual salary of over $53,000 plus benefits. The investment will not be limited to Kenosha, either. Already there are talks of Foxconn building a corporate office in downtown Milwaukee and a secondary facility in Dane County. A supplier of Foxconn has already announced their intention to build a $1 billion plant nearby.
While we, of course, hope for continued economic growth in the state to support lower taxes, education funding, and safe roads, the dollars invested in Foxconn will take away funding for new projects in the future. This will make it more difficult to pass items such as the tax exemption for revenue generated from commercial loans.
Yet, the greater economic impact is difficult to say "no" to. A projected $7 billion annual economic impact throughout the state would be a benefit to all Wisconsinites, including our financial institutions. It will be the largest economic development project in state history and one of the largest in U.S. history.