David Michael Miller
It’s like a smorgasbord at a bad restaurant. There’s so much awful stuff to choose from that it’s hard to pick out just one thing to hate.
But let’s be disciplined this week and focus just on the staggeringly wasteful cost of the Foxconn deal and on just one better thing that that money could be used for. We could use roughly the same amount of taxpayer money to create 33,000 more jobs than Foxconn, create them all over the state (not just in southeast Wisconsin and northeast Illinois), and have those jobs guaranteed (as opposed to being subject to the whims of robotics and the market demand for a mature technology).
According to the respected, nonpartisan Legislative Fiscal Bureau, the proposed agreement with the foreign manufacturer would require state taxpayers to dole out about $2.85 billion in cash directly to Foxconn over the next 15 years. That’s about $190 million a year.
Let’s stop right here and let that sink in. One private company would get an average of $190 million every year from hardworking Wisconsinites. And that’s not just in taxes they don’t pay, but in actual cash payments, checks cut from us to them. That’s $35 a person or $140 for a family of four every year.
Okay, so let’s work with that. Gov. Scott Walker has essentially said that he would support a $190 million annual tax increase on Wisconsin residents or about $140 a year for a family of four. Let’s meet him halfway and accept that tax increase, but look at an alternative for how we want to invest it.
We could fix our roads. Studies rate Wisconsin’s city streets, rural roads and even some major highways as among the worst in the nation. A few years ago a bipartisan commission came up with a balanced plan to fix them. The plan, Keep Wisconsin Moving, was projected to cost about $120 a year for the owner of an average car driving a typical number of miles.
This kind of investment would create more family-supporting jobs than the jobs created to build the Foxconn plant. The Federal Highway Administration estimates that for every billion dollars spent on road building, 14,000 construction and construction related jobs are created and another 14,000 jobs are created due to the money the workers spend. So, $3 billion (if we add the $150 million in sales tax exemptions in the Foxconn deal to the $2.85 billion in direct taxpayers payouts) would create 84,000 jobs. In the rosiest scenarios provided by the company, Foxconn would create a total of 51,200 construction jobs, direct jobs at the plant and indirect and induced jobs.
So the transportation investment would create 33,000 more jobs than Foxconn. And those would last over the total investment period of 15 years, while the construction jobs at Foxconn would last just four years.
And the transportation jobs would be guaranteed. Automation in road building is pretty mature, so it’s unlikely that workers would be replaced by robots, while Foxconn has been doing exactly that at its plants.
And those road building and repair jobs would be created all over the state, not just in Racine, Kenosha and northeastern Illinois, spreading out the economic impact statewide.
Plus, better roads would have their own positive impact on the whole economy, moving people and goods more efficiently around our state and reducing injuries and deaths due to unsafe conditions.
And that bipartisan commission also recommended significant increases in investments in new buses and in support for mass transit. That would mean that workers without reliable cars could find it easier and more pleasant to ride a bus to work, reducing lost work hours and providing a more productive workforce once they arrive at the job.
Keep Wisconsin Moving didn’t recommend any changes to our environmental protection laws and regulations. Wetlands and streams would be protected and environmental impact statements would be provided where needed. By contrast, the Foxconn deal would exempt the company from state wetlands rules, allow the company to move streams and not require them to produce an environmental impact statement for a massive project involving the manufacture of liquid crystal screens.
In fact, it has been the transportation budget that has been holding up passage of the entire state budget, which is now six weeks overdue. The primary sticking point is that Gov. Walker has drawn a line in the sand on any new tax increases, and instead wants to rely on unsustainable borrowing and major project delays to limp through another two years.
In a rational world — and wouldn’t you love to live in a rational world — the governor’s enthusiastic support for a $3 billion tax bill to subsidize one private employer in a highly speculative and risky investment could instead be deployed to produce good-paying, guaranteed jobs all over the state with benefits for everyone.
Now, of course, transportation is just one example. We could make similar arguments for investments in education, clean water, public lands and trails, public health, neighborhood redevelopment and on and on.
I agree with Scott Walker on one thing: It’s a good idea to invest at least $190 million a year in things that will create jobs. But corporate welfare for Foxconn is a sucker’s bet. Investments for the public good are a sure winner.