Residents Forced to Move as Foxconn Incentives Hit $4 Billion

A deal with Foxconn to bring an iPhone screen manufacturing plan to Wisconsin continues to increase the amount of taxpayers subsidies it will receive.
Image: Flickr

Once a move highly touted by Gov. Scott Walker, increased taxpayer credit payments, concerns over a lack of water quality protections and residents evicted on short notice have soured the once-sweet Foxconn deal. 

The Wisconsin legislature approved a deal in August 2017 that offered $3 billion in taxpayer credits to entice the Taiwanese-owned Foxconn company, mostly know for its factories in China that create iPhone touch screens, to the state.

However, in the months since the deal was approved, the price tag continues to rise, amid growing concern among state residents.

The $10 billion manufacturing plant deal was lauded by Wisconsin Gov. Scott Walker as a job creation boon, who also said it would turn the region into “Wisconn Valley.”

This is a once-in-a-century opportunity for our state and our country, and Wisconsin is ready,” Walker said. “We are calling this development ‘Wisconn Valley,’ because we believe this will have a transformational effect on Wisconsin, just as Silicon Valley transformed the San Francisco Bay Area.”

So far, though, the agreement has increased the incentives from $3 billion to more than $4 billion with the inclusion of local government

The Foxconn Deal Continues to Pull More Taxpayer Dollars

The initial deal made with the company included $3 billion in state taxpayer subsidies over a 15-year period to create up to 13,000 jobs in the state. The deal provides the largest amount of taxpayer subsidies ever provided by a U.S. state to a foreign company.

If Foxconn follows through with the promised amount of jobs, each one would cost taxpayers $15,000 per year according to the Washington Post, more if the amount of jobs created declines by the time the plant opens.

However, the amount of taxpayer subsidies continues to rise, according to estimates released earlier this month that would balloon the amount to $4.5 billion, due to additional funds provided by communities surrounding the proposed plant facility to upgrade roads and water systems, as well as a $6.8 million advertising budget to entice out-of-state workers to the plant.

Mike Brown, deputy director of One Wisconsin Now, a non-profit advocacy organization said the deal with Foxconn will take money directly out of the pockets of Wisconsinites.

The thing to remember about the state tax portion of this is that these are tax credits. It’s not just that Foxconn won’t pay taxes on their profits,” Brown told The Intercept. “The state of Wisconsin is literally going to be writing a check to Foxconn, and that’s money that won’t go to supporting Main Street businesses, public schools, or maintaining roads and bridges.”

Local Residents Issued Short-Notice Evictions for Facility Progress

Lawyers on behalf of residents from the Village of Mount Pleasant have filed a lawsuit, claiming the city is misusing eminent domain laws to seize their homes. The lawsuit claims that while city leaders say the property will be used to build public roads, Foxconn is the one benefiting. Eighteen acres of the seized land will be used as part of the Foxconn facility.

The lawsuit includes a request for a permanent injunction against the plant, though Alan Marcuvitz, the village’s attorney, said it won’t stop anything.

“We don’t believe there is any merit to this lawsuit, and we will provide an appropriate response through the legal system,” Marcuvitz said in a statement to the Chicago Tribune.

In the Village of Sturtevant, four families received additional time from Foxconn to relocate from their rental properties. Tenants were originally handed 28-day eviction notices by their landlords, one who later said he was authorized by Foxconn to extend the eviction deadline to 90 days.

The additional time was given after a reporter for the Journal Sentinel inquired about the short deadline and its affect on residents.

In an email to the Journal Sentinel, Louis Woo, top assistant to company chairman Terry Gou, said the company would move to accommodate the needs of residents.

Thank you for bringing this important matter to our attention,” Woo wrote.  “Although we have acted, and continue to act, in full compliance with the legal requirements of the options contracts negotiated with the landowner, we were not aware of the specific negative impacts of these actions on current tenants of the subject properties.”

Woo continued in the email, “Our local team has been instructed to meet with those tenants and ascertain all the facts with regard to their tenancy, and will in good faith attempt to find a legal means to allow them to remain on the properties for at least 90 days from the notice date. While we are focused on moving forward with this important project, we are also committed to doing it as responsibly as possible.”

Foxconn Deal Prompts Water Quality Concerns

In March, the Wisconsin Department of Natural Resources (DNR) will hold a hearing for members of the public to voice their concerns over the idea of the facility pulling seven million gallons of water from Lake Michigan per day. Nearly two-thirds of the amount would eventually be replaced after running through the Racine wastewater treatment facility, but 2.7 million gallons of water used each day would not return to the lake.

The deal made with state officials also allows many state environmental protection regulations to be waived, including the unlimited ability to build developments on wetlands, which advocacy groups say are crucial to the environment.

Looking into Foxconn’s history makes a case for those who are concerned about protecting the state’s air and water. In 2013, the Wall Street Journal reported that Chinese authorities were investigating the company for dumping heavy metals into a local river waterway.

State Democratic Rep. Chris Taylor brought up this concern in a speech to the state legislature.

They have a whole history of dumping heavy metals in China’s river,” Taylor said of Foxconn during floor debate. “People of Wisconsin don’t want companies that dump pollutants into streams.”

About the author

Rachel Engel

Rachel Engel

Author Rachel Engel is also Associate Editor of Military1.com. She is based in Kansas.