Remember Wisconsin's $3 billion subsidy for a Foxconn factory that will produce LCD screens, a technology that is more or less obsolete already?
As you may have suspected, the state's $3 billion handout is only the beginning of the true cost of the project and the ground hasn't even been broken yet. The state under Governor Scott Walker has been begun redirecting funds from other state infrastructure projects to accommodate Foxconn and it's possible even federal taxpayers will indirectly pay for the deal.
The Village of Mount Pleasant and Racine County agreed to give Foxconn $764 million in tax incentives. The measure also commits the state to paying 40 percent of local governments’ expenses for the plant “if ever called upon to do so.”
The state will also spend $30 million on a new two-mile road east of I-94 to be called “Wisconn Valley Way,” and aimed at easing traffic congestion near Foxconn’s plant.
And last week we learned the Walker administration will also siphon $134 million from the state transportation fund to widen and improve several local roads near the future Foxconn factory, as a report by the nonpartisan Legislative Fiscal Bureau disclosed. The Department of Transportation didn’t give the fiscal bureau an exact estimate for the local Foxconn roadwork when it was requested, but the bureau found the information “referenced in a grant application for $246.2 million in federal funds for the nearby I-94 project,” the Wisconsin State Journal reported.
As long as Paul Ryan (R-WI) is the Speaker of the House, there's a 99 percent chance the grant application will be approved.
There's more, and it only gets more ironic from here.
Gov. Walker has also pledged to spend $6.8 million on an ad campaign to help attract out-of-state residents for Foxconn. “We need bodies,” he confessed.
Meanwhile American Transmission Company has announced it will build a new substation to provide electric power to Foxconn at a cost of $140 million, which will then be charged to the 5 million customers of We Energies in southeast Wisconsin. The project “essentially would ask the public to contribute still more to Foxconn through higher electric rates,” the Journal Sentinel reported. [...]
Ald. Bob Bauman tallied the total costs for taxpayers in a speech before a Common Council committee and concluded it would cost $4.5 billion. That might be a tad high, unless you believe the I-94 widening would have never happened. But even without it, the total cost is nearly $4.1 billion, to get a $9 billion plant. That’s astounding: a cost of $1,774 per household in Wisconsin.
The problem with Walker's pledge to lure "bodies" with an ad campaign is that the fiscal viability of the project depends on the employment of residents of Wisconsin, not Illinois or any other state, but the area of Wisconsin the plant is being built in does not have enough "bodies."
Furthermore, as we've discussed before, the project is suppose to pay for itself at some point in the year 2043 which, by my calculations, is about 20 years longer than anyone will be using LCD screens. But that projected date was based on the original $3 billion cost, not the potential cost of more than $4 billion.
My gut says the project will cost even more, perhaps more than $5 billion when all is said and done. If one assume the state won't see even a minimal fiscal return from the investment, the cost could be even higher.