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Saturday, August 12, 2017

State Should Cover 100% Of Local's Tab For Foxconn

RACINE COUNTY — The state would cover up to 40 percent of local governments’ loans if the Foxconn project falls apart, under the deal legislators are considering.

But why only 40%? No confidence in Foxconn?

Let's not pretend it's something it's not. Truth is, Foxconn is a state mandate. It was thrust upon the state by Gov. Scott Walker with the help of Paul Ryan, Ron Johnson and President Trump. So, Foxconn IS a big government order. From the biggest.

With the state thrusting Foxconn on eager desperate locals and knocking down environmental protections along with local ordinances to grease the way for Foxconn, locals are powerless to defend or leverage their assets.

Because Wisconsin taxpayers are already at the mercy of Foxconn's demands thanks to Walker, there is no competition between Wisconsin communities, and if there is, there shouldn't be.

So what the deal means for either Kenosha or Racine (assuming the choice is between them) is they will start paying millions for pipes, wires, concrete and planning not for a factory on a simple 10 acre parcel of land, but for a 1,200 acre self-contained tax-free community within a community - BEFORE the state or Foxconn commit to spending a dime. Early estimates for the cost on locals range from $20 to $50 million. And that is only the beginning.

Now, getting back to that state mandate thing assuming the decision has already been made, if I were Kenosha, Racine or anyone else targeted by Foxconn - I would not offer a TID or TIF District to them at all. Locals are under no "moral obligation" to commit themselves after they have been rendered powerless.

But Rep. Robin Vos said locals will have to step up and borrow from lenders to pay for Foxconn's infrastructure. How generous of him. But why?

Because it's a state mandate, locals would be forced to borrow with or without a TIF District anyways, but without a TIF, property tax payments from Foxconn can pay for the note with left-overs going to the General Fund. Wait, who am I kidding? Any TIF "surplus" is already accounted for and chances are high Foxconn won't be paying property taxes for decades and if they do, it will be small percentage of its true valuation. That's why the state legislature wants to extend TIF life terms to 30 years or more for Foxconn. It'll take locals that long to pay off their debt.

I also totally understand why many think the locals should have some skin in the game and don't want the state to cover any of the local's tab if Foxconn doesn't show. But it's a state mandate demanding locals ante up first ...and what's another $50 million in a $3B deal to Gov. Scott Walker?

Besides, if the state doesn't have the confidence or can't afford to back the ante 100%, it shouldn't be in the game.

1 comment:

Anonymous said...

The farmers in these areas will have their tax status changed to force them out. Fox Conn is a rehash of the existing bond funded speculative warehouse project sucking up the farmland.

Unfortunately the buildings wont sell fast enough to accomodate the intense interest by EB5 visa investors.

So create a holding company that keeps this "investment" until the economy catches up. Empty warehouses that dont pay taxes, provide no employment but thankful rich naturalized asians who fund Republican campaigns.

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