Gov. Scott Walker on Monday asked lawmakers to help extend Foxconn-sized tax breaks to paper manufacturer Kimberly-Clark in an effort to keep two Wisconsin plants open.
Republican legislative leaders did not immediately weigh in on the proposal, while Democrats aiming to unseat the governor this fall criticized it.
Kimberly-Clark, which makes products including Kleenex tissue, Huggies diapers and Cottonelle toilet paper, announced last week that it plans to cut as many as 5,000 jobs and shutter or sell 10 plants globally. Two plants on the closure list — in Neenah and Fox Crossing — employ about 600 people in Wisconsin.
Walker on Monday encouraged lawmakers to offer the company tax incentives at a rate matching the ones offered to electronics manufacturer Foxconn last fall.
Walker's plan would offer Kimberly-Clark tax credits of 17 percent of the company's payroll, up from the 7 percent available under current law. That's the same rate given to Foxconn in the state's move to land the Taiwanese company, which has agreed to build a facility in southeastern Wisconsin.
"Retaining outstanding Wisconsin companies like Kimberly-Clark is just as important as attracting new companies to our state, which is why I’m proposing we offer larger tax credits to ensure the company keeps those 600 jobs where they belong — in Wisconsin," Walker said in a statement.
Around the same time Walker announced his proposal, Democrats in northeastern Wisconsin made their own plea for state funding to retain the company, which is one of the Fox Valley's largest employers.
Sen. Dave Hansen, D-Green Bay; Assembly Minority Leader Gordon Hintz, D-Oshkosh; and Rep. Amanda Stuck, D-Appleton, were joined Monday by Outagamie County Executive Tom Nelson in requesting $60 million to fund two revolving loan programs that would improve the mills' energy and water efficiency and help them transition to making brown paper products.
The Democratic lawmakers noted the total investment of their plan would be about 2 percent of the $3 billion deal the state struck with Foxconn.
Milwaukee businessman Andy Gronik, who has touted his economic development experience throughout his gubernatorial campaign, said if elected governor, he would work hard to keep Kimberly-Clark in Wisconsin, but would not "fork over large sums of money to look good in an election year."
Gronik said it's likely the company's decision to close the plants was related more to inefficiencies at the facilities than other factors.
"So, rather than throw money at Kimberly-Clark to subsidize their labor costs, I’d meet with company executives to determine if there is a workable long-term solution that cures the obsolescence at these plants," Gronik said. "With a long-term solution, we not only retain the 610 jobs at risk but also reward Kimberly Clark for creating more family-sustaining jobs in the future — once created."
State schools Superintendent Tony Evers, another Democratic candidate for governor, noted that the Wisconsin Economic Development Corporation did not contact parent company Kraft Heinz between the announcement of its merger and the time it announced plans to close Madison's Oscar Mayer facility, which employed 1,000 people.
"The state cannot open up its wallet for a short-term fix every single time Governor Walker's jobs strategy doesn't pan out," Evers said. "Wisconsin families rely on these real Wisconsin jobs. If we are going to offer financial incentives to Kimberly-Clark, its critical we include taxpayer protections that ensure these remain good family-supporting jobs that stay here in Wisconsin."
Madison Mayor Paul Soglin, who is also running for governor, suggested in August that Foxconn use the shuttered Oscar Mayer plant for a proposed project in Dane County. He has been critical of the deal itself and said Monday that Walker is "selling our children’s future to finance his political career."
Milwaukee attorney and Democratic gubernatorial candidate Matt Flynn also derided the proposal as a "quick fix." Flynn has pledged, if elected, to terminate the state's contract with Foxconn.
"The proper way to govern is to create an economy and a society where businesses want to locate and workers want to live. We should be investing in schools and infrastructure, which attract businesses and workers to Wisconsin," Flynn said.
Political activist and gubernatorial candidate Mike McCabe said offer amounts to "crony capitalism."
"The line for handouts will get longer and longer and Wisconsin's economy will continue to lag behind the rest of the country's," McCabe said.
Other gubernatorial candidates' campaigns did not immediately respond to requests for comment on the proposal.