CNBC is getting ready to unveil the annual rankings of America’s top states for business. CNBC’s Scott Cohn joins “Squawk Box” to report on the latest.
From The White House’s official transcript:
This is just the beginning. This is one of the largest plants in the world. And when you think in terms of 20 million feet — if you build in Manhattan a million-foot building, that’s a very big building. They don’t get much bigger. And here you’re talking about more. Think of it: more than 20 million feet. And that’s probably going to be a minimal number.
So I’m thrilled to be here in the Badger State with the hardworking men and women of Foxconn working with you. Moments ago, we broke ground on a plant that will provide jobs for much more than 13,000 Wisconsin workers. (Applause.) Really something. Really something. Thank you, fellas.
When will WEDC drop that fatally self-mocking “WisConn” bad label?
Give that rent-seeking corporation a small check to have them go away, and stop the bleeding before they take a lot more from Wisconsinites in future years.
As it turns out, history had already determined that state handouts to attract and keep businesses was a horrible idea, so bad in fact many states amended their Constitutions to prevent those mistakes from ever happening again in the future.After reading the Cap Times article “Where to now with Foxconn? It won’t leave Wisconsin, but it won’t build what it promised,” where every paragraph revealed another strange twist or failure, I had to look up why Scott Walker and his band of plundering Republicans pirates liked the idea of state corporate handouts so much. Not surprisingly, their actions weren’t based on anything I found in the real world, it was simply pure ideological theory. Look at how much money we’re losing, and how few jobs they’re creating…
They say there’s no such thing as bad publicity.
Here’s the counter-argument today, first in a long, must-read piece carried by the Madison Capital Times which, among other things, looks at the risks facing Racine County and the Village of Mount Pleasant where Foxconn bulldozing and local borrowing are well underway:
Based on an examination of Foxconn’s corporate history, Asian business practices and the stark realities of the LCD panel production industry, the likelihood of a flat panel factory in Mount Pleasant seems unlikely any time soon — if ever.
Neither does the prospect of anything close to 13,000 “family supporting” jobs…
For Racine County, the situation is more pressing… The total county cost was recently projected at $911 million, a liability of more than $10,000 per county household…
Just to remind you on how much of a COMPLETE SUCKER you have to,be to think that Foxconn will ever create anything close to 13,000 jobs, let me show you yesterday’s John Oliver segment on the automation of jobs. Something Foxconn proudly proclaims to be a “world leader” on.
As Oliver’s piece notes, historically jobs that have been automated out of existence get replaced by new technologies, generally in more knowledge-based industries. Except that Foxconn’s big pre-election promises on new “innovation centers” outside of Racine County don’t seem to be working out either.
Five-hours of open-for-business scheming –
Madison Mayor Paul Soglin ripped WMC in a press conference today, and openly questioned the motives.behind WEDC’s and WMC’s decision-making
“I think [WEDC] knew how important WMC was to the governor and the core mission of the Republican Party,” Soglin said. “If WMC says don’t go down this path, they weren’t going to go down that path. That’s a horrible thing, because it compromised the people of the state of Wisconsin. (WEDC) failed to do their mission on our behalf.”
Republican Tommy Thompson, who served for fourteen years as governor, has written in opposition to the Wisconsin Economic Development Corporation’s loan program. It’s the right position to take, and shows that Thompson understands the problems with WEDC. Explicitly, Gov. Thompson’s opposition to WEDC-style loans includes local communities’ doling of loans through their own programs. (Whitewater’s Community Development Authority has been one of several cities Capital Catalyst communities making a practice of this, and seeking more money to keep doing so.)
It’s just that what it’s supposed to do is enrich cronies –
Unwanted anywhere –
A woman who played a key role in Wisconsin’s economic development agency, including overseeing a $500,000 taxpayer loan to a failing construction company, has lost her job as the top economic leader in Nebraska.
Nebraska Gov. Pete Ricketts’ office announced Thursday that Brenda Hicks-Sorensen is no longer that state’s economic development director. She had been on the job a little more than eight months.
She was previously the vice president for economic and community development for the Wisconsin Economic Development Corp.
The Republicans in the Legislature are having a series of “Economic Development Committee listening sessions” around the state with various captains of industry invited to speak their opinions on how to improve Wisconsin economic performance and attractiveness. Of course, representatives of labor aren’t being invited to these meetings, but a lot of people connected to the scandal-plagued Wisconsin Economic Development Corporation (WEDC) are, which gives you an idea that much of these meetings have a GOP propaganda element intended to make the state’s underperforming economy seem better than it really is….
“This is the same Lisa Johnson who used to be WEDC’s VP of Entrepreneurship and Innovation, and looked at Wisconsin’s January 2013 rank of 47th for entrepreneurship and famously said “We suck, we’re bad.” She then left WEDC 6 months ago to take her current job at BioForward, which makes me wonder what she saw…
The state’s flagship job-creation agency handed out nearly $90 million more in economic development awards last year than the previous year, yet those awards are expected to create or retain almost 6,000 fewer jobs and result in $400 million less in capital investment.
Most of the additional award funding resulted from a historic rehabilitation tax credit that Gov. Scott Walker and the Legislature expanded in 2013. The agency gave out $2.9 million in 2013-14, but that jumped to $78.1 million last year.
Even without the historic credits, total economic development awards increased $13.5 million, while promised job creation and capital investment dropped….
But there’s another Kohl’s story Walker doesn’t tell.
It’s about the $62.5 million package of tax credits given to Menomonee Falls-based Kohl’s Corp. — the biggest state subsidy for creating jobs under the Walker administration — that three years later isn’t generating the promised jobs or capital spending.
The deal allows Kohl’s to collect tax credits annually for each created job that meets certain criteria — even if that position vanishes after a year.
The work looks into the state’s jobs organization’s awards to WI companies, like Kohl’s. WEDC has given and promised millions of dollars to corporations with the intention of creating jobs in the state. Hall’s investigation measures actual growth after disputes over the department’s transparency.
“Are you going to follow the recommendations in the audit?” I asked the Board Chair of the Wisconsin Economic Development Corporation (WEDC). He crossed his arms, sat back and smiled at me.
A smile that, to me, said I was annoying him.
The clearest path to better outcomes at Governor Walker’s flagship jobs creation agency is to follow the recommendations of the nonpartisan Legislative Audit Bureau (LAB).
However, during a recent and very long public hearing investigating the troubled agency, I repeatedly heard obfuscation, deception and disdain for the law.
But an increasing number of Democrats and even a few conservatives have proposed making major changes to WEDC, either by overhauling it or by eliminating all or most of the agency. In July, Republican lawmakers already reduced the funding for WEDC as part of the current state budget.
Madison — The head of the state’s job-creation agency is putting off Democrats who want its board to discuss outsourcing and its process for conducting background checks, saying it can’t take up the issue until October.
The Wisconsin Economic Development Corp. has been plagued with problems since it was created in 2011 to replace the state Department of Commerce.
Early on, incentives were given without background checks being done on questionable companies and the agency has not independently verified whether companies getting state aid have created the jobs they’ve said they have.
The two Democratic lawmakers on the WEDC board asked to discuss outsourcing and background checks at a board meeting in July. But agency officials said they couldn’t address the matter then because it wasn’t on the board’s agenda.
The Democrats — Sen. Julie Lassa of Stevens Point and Assembly Minority Leader Peter Barca of Kenosha — then asked that the matter be put on the agenda for the Sept. 24 meeting. In a letter Friday, WEDC’s secretary, Reed Hall, declined to do that because the board wouldn’t have time.
First of all, TIF districts were not designed or intended to be used by municipalities to “acquire” property or weaponized to allow private parties to acquire property through government force or below market value. But apparently, according to the newspaper’s new definition, that is how a TIF District works. The part about “charging” the cost of common areas and infrastructure to the district IS how it is supposed to be, but ironically, that’s not how the TIF works for Dollar General.
You see, not only will the city be giving land valued at $4.25M to Dollar General for free, but the property taxes on the new incremental value DG is supposed to pay “to repay the municipality’s costs” WILL BE REFUNDED to them for the first ten years. That also means DG’s TIF district will not produce a $1.5M surplus near the end of the 10 year term. The deal essentially terminates the stakeholders responsibility for funding TIF District infrastructure and relegates the TIF application to a simple legal platform for local tools of the oligarchy to exempt Dollar General from its property tax obligations.
Let’s see if these projects ever get off the ground. I’ll remind you that Eaton Corp announced plans for a sizable expansion with WEDC tax credits in Spring 2014 (just as Scott Walker’s re-election campaign was ramping up) only to outsource large amounts of Wisconsin jobs twice in the last 18 months. Funny how these things never seem to work itself out the way the initial headlines claim, isn’t it?
WEDC was part of another “future jobs announcement” this week regarding a new warehouse for Dollar General in Janesville, which features another $5.5 million in potential WEDC write-offs, along with local tax breaks and land gifts from the Janesville area. And the timing of these announcements are very interesting, because last Wednesday, WEDC was the subject of a legislative hearing related to another blistering audit by the Legislative Audit Bureau. And take a look at what came out in that hearing, where both Republicans and (especially) Democrats were angered by WEDC’s continued inability to follow state laws on tracking loans, grants and job-making progress, combined with the loss of taxpayer dollars from previously failed projects and questionable loans.
But it was negotiations with all levels of government bureaucrats from state to county to city employees providing capital value redistributive incentive packages that ultimately drew Dollar General to Janesville.
A condition imperative to all of these corporate welfare deals: The development would not be occurring without government providing those “incentives.” Collectivism has now become self-fulfilling.