Can’t anybody play this game?
Friday, Aug 11, 2017 - Posted by Rich Miller
* Instead of clutching their pearls and screaming about Madigan like the Tribune did, the Sun-Times has a much more reasonable, witty and responsible response to the Foxconn deal…
EDITORIAL: Thank you, Wisconsin, for the beautiful gift
Friends in the Wisconsin Legislature, we beg you: Sign that bad deal with Foxconn.
It’s the neighborly thing to do.
Best we can tell, it’s a crap shoot as to whether luring the giant electronics company to Wisconsin would work out well for you, given the billions of dollars in tax breaks your governor has promised, but it would be terrific for Illinois. It would cost our state nothing, yet up to half of the new jobs could go to our residents, while O’Hare Airport would get the new international travel business.
The best thing that ever happened to Illinois might be losing Foxconn to you, Wisconsin. Much appreciated.
Truth be told, this whole sad spectacle of Midwestern states fighting each other for economic development, each trying to outdo the other in prostrating itself before some international conglomerate, is foolish, and the Foxconn deal is proof. If Illinois and Wisconsin had joined forces from the beginning to bring this manufacturing plant to the region — maybe even pulling in Indiana as a partner — the final deal with the Taiwan company might have been less of a give-away, and the risks would have been shared.
To be a player in the global economy, size matters. Working together, the Midwest is better positioned to leverage its strengths, including a highly trained work force, superb universities and a central location. But because Illinois, Wisconsin and the rest of the old Rust Belt states fail to do so, big companies like Foxconn play them off each other. The result is the kind of questionable deal Gov. Scott Walker has cut for Wisconsin.
The Sun-Times is right on all points. And our governor should’ve led the charge for a regional deal. It’s high time that Great Lakes states stop fighting each other and start working together.
- HoneyBadger - Friday, Aug 11, 17 @ 10:50 am:
An excerpt from the Washington Post…
The deal President Trump called “incredible” and Gov. Scott Walker hailed as a “once-in-a-century” opportunity to bring the electronic manufacturing giant Foxconn to Wisconsin wouldn’t generate profits for the state until 2042, a new legislative analysis projects.
- HoneyBadger - Friday, Aug 11, 17 @ 10:52 am:
Rich not sure if this is ok or not, but here is the rest of the story from WaPo, regarding Foxconn and Wisconsin.
https://www.washingtonpost.com/news/wonk/wp/2017/08/09/the-foxconn-deal-trump-championed-wont-make-wisconsin-money-for-25-years/?utm_term=.525958bb79be
- City Zen - Friday, Aug 11, 17 @ 10:53 am:
I agree it’s a far better play to unite as a region and use the strengths of our neighbors to our advantage. I always wondered why Ranuer feels compelled to compete and beat Wisconsin and Indiana.
- Huh? - Friday, Aug 11, 17 @ 10:55 am:
How Walker can call this a good deal is beyond me. 25 years to break even? In 25 years, the factory could be closed, torn down and covered over.
- Mr. K. - Friday, Aug 11, 17 @ 10:59 am:
Can Rauner lead the charge on anything?
I mean, short of trashing Madigan (and the state) everywhere he goes, Rauner seems stuck in the “we need to pass my reforms before I actually do anything” mode.
Lead the charge? Are you kidding? Who’ll follow Rauner?
- Back to the Mountains - Friday, Aug 11, 17 @ 11:01 am:
@Huh, that’s the point. You get tax breaks for the useful life of the plant. It leaves just enough time to negotiate a new package of tax breaks before you begin renovation.
- TheDopeFromHope - Friday, Aug 11, 17 @ 11:03 am:
Money earned in Wisconsin will be taxed in Wisconsin. Illinois residents working in WI may lower our unemployment rate, especially when they end up moving to Wisconsin.
- Da Big Bad Wolf - Friday, Aug 11, 17 @ 11:03 am:
The Suntimes editorial hit the nail on the head. We are one huge metro area. When a blizzard hits, we are all digging out. When a factory opens we can all apply for the jobs. We need to work as one. Last time I looked the Chicago metro area had three states in it. And the same way of thinking can be done for Alton, East St. Louis and St. Louis. Why not work with our border partners to reel in the big fish?
- Century Club - Friday, Aug 11, 17 @ 11:03 am:
The competition between states isn’t a bug, it’s a feature in the current GOP ideology. Intense competition between states drives down costs for business*. And in their world, anything that drives down costs for businesses is good.
*actually increases massive taxpayer subsidies, but whatevs
- JM1997 - Friday, Aug 11, 17 @ 11:04 am:
City Zen– When the Gov competes and beats he can claim credit. When the Gov competes and loses, he (plus Trib Edit Board + IPI) can blame Madigan.
Curious what Indiana edit boards wrote about losing FoxConn without pro-labor laws and Madigan to blame.
- Anon - Friday, Aug 11, 17 @ 11:05 am:
Illinois has unilaterally disarmed as a highly desirable location for businesses, and that works just fine for the other states in the region.
Businesses can do the math, and know that given Illinois’s pension problems that they are likely to see steep taxes increases in the next 10-20 years because the money is going to have to come from somewhere. Businesses will always be the lowest hanging fruit.
- Lamont - Friday, Aug 11, 17 @ 11:05 am:
If only we had an astute businessperson running the state. /s
- WSJ Paywall - Friday, Aug 11, 17 @ 11:06 am:
=Illinois has unilaterally disarmed as a highly desirable location for businesses, and that works just fine for the other states in the region.=
Works fine for states that are willing to pay billions in corporate welfare to get good headlines.
- Today's Pick 4 are 3671 - Friday, Aug 11, 17 @ 11:06 am:
“Chicagoland” is the global international player here, not the individual states.
Without close poximity to O’Hare, there’s no way Wisconsin would have made the first cut.
- BlackForestLicorice - Friday, Aug 11, 17 @ 11:11 am:
So make the mid-west totally noncompetitive, great idea Sun Times. Try to turn the rest of the region into a dysfunctional waste land. Guess what, there are a bunch of other cities/states with good schools, solid infrastructure and educated work forces (people that probably left this state). Democrats are running their states so well that they are losing representation in Congress every census because of a fleeing population.
- Ole' Nelson - Friday, Aug 11, 17 @ 11:14 am:
“If only we had an astute businessperson running the state. /s”
I said a similar thing as soon as this was posted, but my comment went to “Lucci-land”, LOL. I promise I won’t cry around about being “censored”, but not sure what was controversial about what I said. Strange…
- wordslinger - Friday, Aug 11, 17 @ 11:14 am:
I’ll believe Foxconn when I see it. That crew has a history of promising and not delivering,
I think it was a way for them to make nice with the speaker and the president by giving them a sweet media day. Helps former Never-Trumper Walker, too, in his re-election bid, as they don’t have to deliver the goods til 2019.
Check the facts on how Trump and Pence “saved” Carrier in Indiana for a reality check. Not so much.
- Rich Miller - Friday, Aug 11, 17 @ 11:17 am:
ON, your comment contained an exclamation point so it was automatically put into moderation. I didn’t release it because the rest of it was over the top. Captain Ahab? C’mon, man. Tone it down.
- JM1997 - Friday, Aug 11, 17 @ 11:20 am:
BlackForestLicorice — Your overgeneralized population growth to party control correlations might need some refinement. http://thehill.com/homenews/state-watch/323796-rep-steve-kings-district-is-dying
- Sue - Friday, Aug 11, 17 @ 11:25 am:
Not every issue is a Dem/Repub divide. Cuomo in NY does plenty of advertising trying to lure business from other locales to NY. If Illinois was to work with other States to land business- exactly how would that work? Last time I looked it’s pretty hard to jointly land a plant absent locating it straddling the boarder?
- Today's Pick 4 are 3671 - Friday, Aug 11, 17 @ 11:31 am:
@Sue,
In the Foxconn case, having WI taxpayers pay billions for a facility on the Illinois state line is kinda like your brother buying a boat - you get many (not all, but many) of the benefits with none of the costs.
- hold on - Friday, Aug 11, 17 @ 11:33 am:
WS is right. There will be no $10 billion plant. There may be a plant. But someone should explain why their factory will cost $10 billion and employ 3,000 people, but the possible Mazda/Toyota factory will employ 4,000 people, but cost 1/6 the amount.
Anyway, good luck with that, cheeseheads.
- Juvenal - Friday, Aug 11, 17 @ 11:34 am:
It seems unlikely that Governor Lucci would approve of any tax subsidies being offered to Foxconn, either as a stand-alone deal or in the BIMB as part of a broader budget agreement.
- Norseman - Friday, Aug 11, 17 @ 11:35 am:
When has Rauner “led” anything other than the GOP chorus singing “Because Madigan?”
- TinyDancer(FKASue) - Friday, Aug 11, 17 @ 11:38 am:
==If Illinois and Wisconsin had joined forces from the beginning….maybe the final deal with the Taiwan company might have been less of a give-away, and the risks would have been shared.==
Competition in a free market is supposed to be businesses competing against each other for customers - not the other way around.
- Norseman - Friday, Aug 11, 17 @ 11:39 am:
Mr. K, my apologies for commenting first then reading other comments. You beat me to the punch.
- Louis G Atsaves - Friday, Aug 11, 17 @ 11:40 am:
What is with all the bricks being thrown at Wisconsin and at Rauner around here?
When I was a kid growing up in Chicago, a lot of parents of friends worked at Zenith before all their electronics manufacturing was outsourced overseas. Same is true with my late inlaws with Motorola.
Now electronics manufacturing returns to the rust belt and the near universal response is the raspberries, because a Republican Governor and US Speaker pulled it off?
Since I live near the Illinois-Wisconsin border, how about taking a drive and compare the difference between the struggling side of ours and then cross the border.
Then do the same with the Indiana and Iowa borders.
The smirking is just irrational around here.
- Robert the 1st - Friday, Aug 11, 17 @ 11:42 am:
Louis G Atsaves, I suggest reading other comment sections. Most everyone else is celebrating this.
- Foxy - Friday, Aug 11, 17 @ 11:44 am:
It would be nice if everyone would work together. In the present, the Wisconsin-haters and Walker-haters would be better to do their homework before resorting to snarky attacks. This board’s commenters pride themselves on nuance, facts, and substance, so in that spirit, here’s the actual analysis from the LFB. Surprise … there are two pages of technical interpretation and qualifiers for the “25 year breakeven” that somehow didn’t make it into the news articles.
http://docs.legis.wisconsin.gov/misc/lfb/bill_summaries/2017_19/0001_ss_ab_1_foxconn_fiserv_legislation_8_8_17.pdf
- wordslinger - Friday, Aug 11, 17 @ 11:47 am:
LOL, Louis tell us more about the class struggle in Lake Forest.
Can Uiehlein at least give you a deal on Schlitz? Does he brew any of the old family recipe out in the garage?
Why do you think Uiehlein took the pay-to-play corporate welfare to locate his bubble wrap kingdom in Kenosha, but still resides in Lake Forest?
That progressive income tax, maybe?
- Heat of Summer - Friday, Aug 11, 17 @ 11:54 am:
TheDope wrote, “Money earned in Wisconsin will be taxed in Wisconsin. Illinois residents working in WI may lower our unemployment rate, especially when they end up moving to Wisconsin.”
Actually WI and IL have a reciprocal agreement, IL residents are taxed by IL on WI wages. They could move to WI though.
- Alliance4RegionalDevelopment - Friday, Aug 11, 17 @ 11:56 am:
There’s an organization that is devoted to regional economic development. Check out www.alliancerd.org
- Annonin' - Friday, Aug 11, 17 @ 11:57 am:
WSJ has a piece suggestin’ some buyers remorse in WI and that it will take til 2042 to recoup the giveaways. Someone might wonder if the plant built in 2018 will be able make anything that will be in use in ‘42
- wordslinger - Friday, Aug 11, 17 @ 12:01 pm:
Bobby 1, what do you call that brand of socialism you’re celebrating?
In other socialist states, if the state invests and partners with a private enteprise, the taxpayers get an equity stake.
Equity is much more better value than press release promises.
- Will Caskey - Friday, Aug 11, 17 @ 12:04 pm:
Rich, I don’t often agree with you completely, but I’m doing it here.
- Lucky Pierre - Friday, Aug 11, 17 @ 12:05 pm:
Of course the Sun Times is throwing shade at Wisconsin Republicans Governor Walker and Speaker Ryan.
Fox Conn currently pays zero taxes in Wisconsin so tax credits will not cost Wisconsin anything
The Sun Times is Right on all points?
Hardly, they lean left on all editorials.
- City Zen - Friday, Aug 11, 17 @ 12:10 pm:
==Money earned in Wisconsin will be taxed in Wisconsin. ==
Not if the worker resides in Illinois. State reciprocity, dude…
https://www.revenue.wi.gov/DOR%20Publications/pb121.pdf
- Pot calling kettle - Friday, Aug 11, 17 @ 12:24 pm:
The question I have is this: Would it have been better for Wisconsin if they had spread the incentives around? For example: $1 million in incentives to 3000 prospective employers. It would spread out the risks and distribute the benefits around the state. (And, it removes the focus of the benefits from the border region.)
With respect to the editorial, I see the goal, but fail to see how it could be accomplished. The structure of taxes in different states makes it hard to see how an multi-state bid would work.
- Norseman - Friday, Aug 11, 17 @ 12:25 pm:
Louis, $3 billion in incentives. That’s a hefty impact on WI. If, and that’s a big if, this works out, the length of time to recoup that investment is noteworthy. There has been a lot of studies questioning the efficacy of incentive programs. See the Governing article on the subject: http://bit.ly/2vMGbEp.
Even if you’re an incentive believer your master was too busy increasing Illinois’ debt.
- ArchPundit - Friday, Aug 11, 17 @ 12:46 pm:
===For example: $1 million in incentives to 3000 prospective employers.
This is a great point–if you can help entrepreneurs (read small business people) a lot will fail, but the return on average is better and the capital stays here.
- Arthur Andersen - Friday, Aug 11, 17 @ 1:07 pm:
ArchPundit, you beat me to the punch. The evidence is more than anecdotal that modest incentives to small/medium sized businesses pay greater dividends than mega deals like Foxconn.
- Jibba - Friday, Aug 11, 17 @ 1:15 pm:
Hey Louis…I cheer all economic development that doesn’t cost the state nearly everything it stands to make..
Would still love it if a legal case could be made against states providing special tax incentives to companies who relocate. Perhaps 14th amendment? Interstate commerce? C’mon Lisa Madigan, put some interns on it, at least. Blue states should match the suing fervor of the red states to amend federal law to our liking even if we do not control the levers of power in the Federal government.
- Moderate Condor - Friday, Aug 11, 17 @ 1:21 pm:
Foxconn would have come here if someone overseeing economic development policy spent even more time complaining about forum moderators.
- sulla - Friday, Aug 11, 17 @ 1:25 pm:
“There has been a lot of studies questioning the efficacy of incentive programs. ”
So what? Until the federal government outright bans the practice of offering incentives, its all hot air. No state is going to unilaterally disarm.
“Equity is much more better value than press release promises.”
Not from an elected official’s perspective. These megadeals are measured more on their ability to get incumbents re-elected than on their dollars-and-cents ROI to taxpayers.
Rightly or wrongly, the american populace lays the responsibility for job creation at the feet of politicians. Big flashy economic development deals like this are the result of politicians feeding that demand from voters. So what if ten years later the deal was a net loser to taxpayers? Today’s politicians will be long gone by then.
- Norseman - Friday, Aug 11, 17 @ 3:33 pm:
=== So what? ===
I guess you don’t care about wasting taxpayer money.
- wordslinger - Friday, Aug 11, 17 @ 3:58 pm:
– These megadeals are measured more on their ability to get incumbents re-elected than on their dollars-and-cents ROI to taxpayers.–
And you’re okay with that?
–Rightly or wrongly, the american populace lays the responsibility for job creation at the feet of politicians. –
Says who? Politicians and those whose jobs depend upon churning out the press releases?
Sulla, isn’t this your line of work? You don’t think much of it.