This is a story from about two weeks ago posted in the Janesville Gazette titled, "State tax credits help GOEX project in Janesville."
At first I was going to post only a brief for archival purposes on what appeared to be just another fear market enterprise ransom paid to a local company threatening to move out of Janesville, but once again I got hung up on several key points of the "incentive package."
First off, this was another deal in a long line of "job creation" deals in Janesville where the current number of workers employed by the business is either well above the minimum number expected to be retained or matches the number of new jobs to be created - before the deal is struck.
In Wisconsin WEDC Excerpt:
MADISON, WI. OCT. 1, 2014 – GOEX Corp., a manufacturer of plastic sheet products, is more than doubling the size of its operations in Janesville—a project expected to create about 30 new jobs and retain 130 existing ones.
Except, according to the Gazette article, the company had 152 employees at the time of the tax credit announcement. So how does that work? Will they "retain" 30 new jobs along with the 130 existing for a total of 160 jobs retained?
Not quite, but it sure does seem they want it to appear that way. The bottom line is GOEX must retain a minimum of 130 jobs over the next three years to (still) qualify for the credits. That means they can lose 22 employees and still be OK to claim $655,000 in WEDC tax credits. That doesn't sound very incentivizing to me.
Secondly, and this is getting redundant, the folks involved in this deal make it sound like a competitive process was involved.
“When the time came to look for a new manufacturing site, we looked at other communities and other states,” Gray said. “We have an exceptional workforce in Janesville and Rock County and preferred to stay here if at all possible.
And again, the parties involved should state what other communities were in competition with Janesville and what packages they offered. How are we supposed to know if we're paying them (GOEX) enough if we don't know who and what the competition is? Cue: eyeroll
But here's the most troubling part. GOEX had previously received $594,000+ in TIF surplus cash from the city and $650,000 from WisDOT for a frontage road and railroad spur - SIX MONTHS AGO - predicated on the same 130 employee threshold AND the project is already underway. They can lose 22 to 30 employees and still qualify for the "incentives."
So what could be the driving force why GOEX would pick up $655K from the WEDC on top of those others based on a negative benchmark?
GOEX is owned by Joseph Pregont, and according to the Wisconsin Democracy Campaign Database, donated $15,600 to Scott Walker since 2010.
In Janesville alone, there were three recent transactions (United Alloy $1.5M, Helgesen $2.4M, GOEX $1.9M) that involved "expansions" and the spectre of "competition" whose taxpayer funded awards total $5.8+ million remain guaranteed not by creating jobs, but allow shrinking the workforce by 50 to 80 employees.
That is not moving forward in my book.
RNR - Developer "Wins" $2.4M From Taxpayers, City Council Grovels Into The Camera
RNR - Collectivism To The Rescue Of Yet Another Janesville Business