Wisconsin will not break even on Foxconn investment for 25 years, maybe longer: fiscal study

It would take at least 25 years for Wisconsin taxpayers to break even on Governor Scott Walker’s incentives to lure Taiwanese electronics giant Foxconn to the state, according to a fiscal analysis released on Tuesday.

Walker’s bill would exempt construction materials from the state and local sales tax and hand the company up to US$2.85 billion in tax credits based on the number on the number of jobs generated. It also would exempt the company from a host of environmental regulations and borrow US$252 million to rebuild Interstate 94 near the plant site.

The non-partisan Legislative Fiscal Bureau’s analysis of the bill found that the cost of the tax credits would exceed potential increased tax revenues by US$1.04 billion at the end of fiscal year 2032-33. After that year, payments to Foxconn would end and increased tax collections would ring in at about US$115 million annually. At that rate, the break-even point would come during the 2042-43 fiscal year.

The break-even point could come even later, though.

Foxconn hasn’t picked a site yet but the company is eyeing an area just across the Illinois border. If 10 per cent of the jobs associated with the plant go to Illinois residents, the break-even point would be pushed back to 2044-45, the analysis found.

If 40 per cent to 50 per cent of the jobs go to out-of-state residents, the break-even point would be pushed well past 2044-45, the analysis said.