Foxconn's tax credits from the state of Wisconsin would reach their apex from 2023 to 2026, at $312.4 million per year, according to an analysis by the state Department of Revenue.
Lawmakers are considering a bill that would offer the Taiwanese electronics company up to $3 billion in tax incentives to build a $10 billion LCD panel manufacturing facility in the southeastern part of the state.
Under the proposal, Foxconn would be eligible for up to $1.5 billion in credits for $9.5 billion of payroll expenditures over a 16-year period, and $1.35 billion in credits for $10.7 billion of capital expenditures over a five-year period.
The company would also be eligible for a sales and use tax exemption on building materials, supplies and equipment used for construction of the facility. The DOR analysis projects the exemption would reduce state sales tax revenue by about $139 million and local sales tax revenue by about $10.7 million.
The DOR analysis projects the company would spend $10.7 billion on capital expenditures from 2018 to 2022. Foxconn would then receive about $193 million per year from 2020 to 2026.
Foxconn is expected to spend about $14 million on payroll in 2017, according to the state's projections. Hiring would then ramp up through 2021, when Foxconn would spend a projected $703.4 million per year on payroll expenses through 2032. The company would receive $2.3 million in credits in 2019, ramping up to a maximum of $119.6 million annually from 2023 to 2033. Credits would taper down to $3.7 million in 2034.
Those projections are based on the assumption that the company will create 13,000 jobs with an average salary of $53,875 by 2021.
According to an analysis by the state Department of Transportation, the state would pay $408.3 million in interest from 2019 to 2042 to repay the $252.4 million in borrowing included in the bill for construction on Interstate 94 north-south. That borrowing is contingent on receiving a federal match.
An analysis by the state Department of Administration addresses a provision in the bill that appears to make the state liable for up to 40 percent of local governments' expenses related to the deal — for instance, street and sewer costs — if Foxconn doesn't hold up its end of the agreement. According to the DOA analysis, that arrangement is a "moral obligation pledge" but does not guarantee any payment. Payment to local governments would require legislative approval.
A state Assembly committee heard testimony on the bill for nearly 10 hours last week. The committee is expected to vote on the legislation, perhaps with some amendments, later this week.
While Assembly Republicans are hoping to approve the deal quickly, Senate Republicans have argued the state budget should be completed first. The two-year spending plan is more than a month late. Gov. Scott Walker said last week he thinks both pieces of legislation can be passed on the same timeline.