Why not Illinois?

Why not Illinois?

Illinois not only isn't competitive with neighboring states, it's also not trying to be competitive with neighboring states.

What's good for Wisconsin isn't necessarily bad for Illinois.

But that's not the case in connection with the recent big decision by Foxconn, a Taiwanese company that, among other things, assembles the iPhone for Apple. The company announced, with considerable fanfare at the White House, that it plans to build a $10 billion plant near Janesville, Wis., that is expected to create 3,000 jobs initially and eventually at least 13,000 jobs

This private investment is coming with $3 billion in financial incentives over a 15-year period. But the incentives won't be awarded unless Foxconn creates the anticipated jobs paying an average salary of $54,000 a year.

The Wisconsin State Journal reports the plan is "being called the largest economic development project in state history," one that is expected to open in 2020 and be part of a 20 million-square-foot campus on at least 1,000 acres.

Comparing the proposal to Silicon Valley, Wisconsin Gov. Scott Walker has dubbed the area where the plant will be built as "Wisconn Valley."

The factory will produce liquid-crystal display panels — LCDs — for televisions and computer screens.

As Gov. Walker boasted in his announcement, the development will provide a big shot in the arm for the Wisconsin economy, particularly the state's manufacturing sector.

"Today we're announcing the single largest economic development project in the history of Wisconsin," Walker said.

On occasions like this, excited public officials traditionally predict great things ahead, and it was no different this time.

Gov. Walker predicted dramatic economic spin-offs that would create at least 22,000 "indirect and induced jobs" statewide and generate $181 million in state and local tax revenues annually, including $60 million in local property taxes.

It's a complicated deal, with the state making great concessions to obtain what it hopes will be great gains. Incentives include $1.5 billion in state income tax credits for job creation, up to $1.35 billion in state income tax credits for capital investment and up to $150 million for the sales- and use-tax exemption. The state's contract includes clawback provisions requiring the company to repay the money if it does not keep its end of the bargain. Additionally, local governments may offer still-unidentified incentives.

It goes without sayinng that this is a huge feather in the caps of Cheeseheads. At the same time, it's a disappointment to other states that were trying to lure Foxconn to their home turf.

Seven states competed for Foxconn. The others were Illinois, Indiana, Michigan, Ohio, Pennsylvania and Texas.

Illinois Gov. Bruce Rauner reportedly offered a generous incentive package to Foxconn. But, frankly, it's hard to imagine this state being a serious contender for such a large enterprise.

The Land of Lincoln has strengths — a Midwest location, a strong transportation network, a capable workforce. But its strengths are outweighed by its weaknesses, specifically its reputation as being hostile to job creators.

A company that's eventually going to employ 13,000 is, naturally, going to have concerns about workers' compensation costs, corporate tax rates and state and local governments that keep themselves in good economic shape.

In those categories, our elected officials not only are failing dramatically but making it crystal clear they have no interest in reshaping the status quo.

That may be OK for those who have good jobs. But what about those who want a good job and a good, economically healthy place for their families to live? Too many people who fall into the latter category are leaving.

That, of course, is Illinois' problem, not Wisconsin's. But Illinois' disadvantage is Wisconsin's, and other states', advantage, and it will continue to be until our Republican governor and Democratic Legislature realize their common interest in rebuilding this effectively bankrupt state.

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DEB wrote on July 28, 2017 at 11:07 am

Gee, I wonder why the article doesn't mention the single most important reason the jobs will be going to that part of Wisconsin instead of Texas, Michigan, Illinois or elsewhere? It might not serve the papers goal of slamming Illinois, but the single most important reason it is going to Wisconsin is that it is going to be located in Speaker Ryan's district. It also is no coincidence that the company is seeking not just tax breaks from Wisconsin, but is lobbying the Rebublicans in Congress for a lot of breaks on bringing in immigrant labor, waivers of environmental laws, and other "favors." It also conveniently doesn't mention that the company has given millions to Ryan and the Republican PACs over the years, and this is one more string it can hold over them.