MacIver Institute

MacIver News Service | August 18, 2017

[Madison, Wis...] Immediately after the Foxconn vote, Assembly Speaker Robin Vos​ told reporters yesterday his goal is to pass a budget by the end of summer, which is Sept. 22, echoing Gov. Scott Walker​'s comments on Wednesday. His caveat: "If we can reach agreement."

Walker made similar comments at a Wisconsin Manufacturers and Commerce event the previous day, emphasizing that school districts will need to start planning their budgets soon.

.@GovWalker at a WMC event said three times today that he expects to sign a budget by the end of summer, which is technically Sept. 22. pic.twitter.com/tgn7qFpdUj

MacIver News Service | August 17, 2017

[Madison, Wis...] After Assembly Democrats spent hours doubting Foxconn jobs would actually materialize, Speaker Robin Vos caught Minority Leader Peter Barca in a moment of double-speak.

The state Assembly passed the historic $3 billion incentives package for electronics giant Foxconn on Thursday night. The 59-30 vote was bipartisan, with three Democrats voting yes and two Republicans voting no.

MacIver News Service | August 17, 2016

[Madison, Wis...] Foxconn Technology Group is one step closer to breaking ground in Wisconsin after the Republican-led Assembly passed a $3 billion incentives bill on Thursday evening after seven hours of debate.

The amended proposal was approved 59-30 on a mostly party-line vote, with Republicans lauding the "pay-as-you-grow" incentives package and Democrats painting it as a taxpayer giveaway for a Fortune 50 tech conglomerate. Most Republicans voted for the plan and most Democrats against, with some exceptions.

Rep. Cory Mason (D-Racine), who is running for Mayor of Racine, voted for the bill, as did Rep. Tod Ohnstad (D-Kenosha), the ranking Democrat on the Assembly Committee on Jobs and the Economy, and Rep. Peter Barca (D-Kenosha), the Democrats' Minority Leader. Rep. Adam Jarchow (R-Balsam Lake) and Rep. Todd Novak (R-Dodgeville) were the lone "nay" votes on the Republican side of the aisle.

"It is not very often that you're able to bring an entire industry to a state, let alone an entire industry to America," said Rep. Dale Kooyenga (R-Brookfield), comparing the bill to the Louisiana Purchase early in America's history.

Citing his free market ideals, Kooyenga said that he didn't love everything about the bill, but stressed that it would be a once-in-a-lifetime opportunity. "When you have the opportunity to bring an entire industry to Wisconsin, that offers hope for people."

Rep. Jeremy Thiesfeldt (R-Fond du Lac) echoed the sentiment. "You can't compete if you're not in the game. This Foxconn deal puts us in the game."

Foxconn would receive a total of $2.85 billion in tax credits over the 15-year lifetime of a specially created Electronics and Information Technology Manufacturing Zone (EITM) - if the world's largest manufacturer of liquid-crystal display panels comes through on constructing its first North American plant in Wisconsin and fills all of the proposed 13,000 jobs, at an average annual salary of $53,875.

The bill includes up to $1.5 billion in refundable tax credits for job creation, but only jobs paying between $30,000 and $100,000 a year would be eligible.

Foxconn also would be eligible for a refundable credit of up to 15 percent of its capital expenditures in the zone. Aggregate payments for the capital tax refund could not top $1.35 billion, according to a review by the Legislative Fiscal Bureau. Credits would be paid from the state's General Purpose Revenue appropriations.

In a Break-Even Analysis, the review projects the state wouldn't begin making money on the Foxconn deal until 2042. The Fiscal Bureau notes such a timeline must be viewed cautiously, however.

"(A)ny cash-flow analysis that covers a period of nearly 30 years must be considered highly speculative, especially for a manufacturing facility and equipment that may have a limited useful life," the LFB analysis states.

While Foxconn would receive up to $1.5 billion in capital expenditure tax credits and sales tax exemptions, the incentives would "induce private investment of $10 billion from Foxconn alone, for a leverage ratio of $6.70 of private investment for each $1 of public outlay," according to the analysis. The payroll credit would spur a leverage ratio of 5.9 to 1. And those ratios climb higher when indirect and vendor-related jobs associated with the project are factored in.

Democrats took turns expressing their skepticism over the number of jobs the manufacturing campus would eventually create. "You know what your priority is, based on this bill? The possibility, the dream, the folly, the fairy tale that you might get 13,000 jobs in exchange for $3 billion," said Rep. Gary Hebl (D-Sun Prairie). "I'm not going to waste or take a chance or gamble on the taxpayers' money."

But Minority Leader Peter Barca admitted that the company is planning to create over 1,000 jobs within the next two years during a debate over a Democrat amendment on worker training. "We shouldn't wait two years to start a training program. Foxconn's already going to hire 1,040 workers before then. Let's make sure our people are trained and first in the queue to get these jobs," said the Kenosha Democrat, whose district is near where the electronics giant is looking to locate its campus.

Barca was the only member of Democratic leadership to vote for the bill.

Speaker Robin Vos (R-Rochester) jumped on the slip-up. "You said you're all worried about the jobs never coming," Vos said, "and now your argument is entirely focused around 'we need more money quicker because the jobs are going to come too fast for our ability to be able to train them.' So, are you worried about workers being trained because so many jobs are being created? Or are you worried more about the rhetoric of finding any reason you can to be a naysayer on the largest economic development project in our state's history?"

"You can't have it both ways."

After Dems said they doubt #Foxconn jobs would actually come through, @SpeakerVos caught @PeterWBarca in a moment of double-speak. #wiright pic.twitter.com/RNGLXQZ2u6

Indirect jobs, including construction and offshoot industry roles, could total up to 22,000 new positions, according to some estimates.

The legislation exempts the Foxconn project from some DNR permitting requirements, such as wetlands review, and lifts the usual requirement for environmental impact statements that has slowed previous larger-scale development projects to a crawl.

Supporters of the incentives package point out that the wetlands exemption, for instance, calls for more rigorous replacement standards. Opponents expressed concern at other changes, including the waiving of the environmental impact statement.

"Once this company is allowed to decimate our environment, to dump into our streams that's eventually going to go into our lake, what does that do to our most beautiful important natural resource that we have in the state of Wisconsin?" said Rep. Christine Sinicki (D-Milwaukee).

"We might be the last generation that actually gets to enjoy the beautiful natural resources of southeastern Wisconsin. It's disgusting to me," Sinicki said.

The next stop for the bill is the Senate. Senate President Roger Roth (R-Appleton) last week referred the bill to the Joint Finance Committee, which is expected to convene next week.

MacIver News Service | August 16, 2017

By M.D. Kittle

[Madison, Wis...] Opponents of Wisconsin's potentially massive economic development deal with Foxconn Technology Group like to point to Pennsylvania's tale of heartbreak at the hands of the Taiwanese tech giant.

That's certainly how the Washington Post painted the picture earlier this year when Foxconn, in the first few weeks after President Trump's inauguration, announced it plans to invest billions of dollars in the United States and create as many as 50,000 jobs.

In 2013, the post reported, Foxconn Chairman Terry Gou pledged to build a $30 million factory in Pennsylvania's capital, Harrisburg, and hire 500 workers.

"But the factory was never built. The jobs never came," the Post morbidly reported.

True. The deal didn't go down.

But the story, and others like it, left out some very important details, according to a guy who has gotten to know Gou and Foxconn over the past several months: Gov. Scott Walker.

In a key way, Foxconn didn't leave Pennsylvania; Pennsylvania left Foxconn, according to administration officials.

After Democrat Tom Wolf unseated Republican Gov. Tom Corbett in 2014, Foxconn saw the writing on the wall, Walker said.

"In the case of Pennsylvania, they changed leadership, they changed who the governor was," Walker told MacIver News Service Tuesday on the Vicki McKenna Show, on NewsTalk 1130 WISN in Milwaukee.

"I jokingly, but only half jokingly, say, it's probably a pretty good reason not to change who the governor is for the next few years," Walker, who is expected to run in 2018 for a third term, added.

The Badger State's proposed $3 billion incentives package would no doubt play a big part in sealing Foxconn's plan to build a $10 billion high-tech manufacturing campus in southeast Wisconsin - a development project that could ultimately create 13,000 jobs at what would be Foxconn's first North American manufacturing operation.

But Walker said Wisconsin offers Foxconn intangible benefits that other states cannot, chief among them, stability.

Pennsylvania Gov. Tom Wolf, billed as "The most liberal Governor in America," brought into office an agenda of big tax increases and stiffer government regulations on business.

"The idea that the new governor, with new terms, a new potential business climate, might come in, was something that was a grave concern for (Foxconn), and so they backed away," Walker said.

Foxconn, too, slowed its investment in Brazil, as the South American nation reeled under corruption and the impeachment and removal of its president.

That point, too, is not noted in the Washington Post story, which all but accuses Foxconn of being a deadbeat business. Foxconn, according to the newspaper, "spoke of a $10 billion plan in 2011" in Brazil.

"In Brazil, Foxconn has an iPhone factory, but its investment has fallen far short of expectations," the Post reported.

Gou has made it clear that Foxconn needs to be in the United States. The proposed southeast Wisconsin operation would make super-high-definition liquid crystal display panels to be used in various industries. The United States remains the largest consumer market in the world, and "Made in the U.S.A." is critical to Foxconn's growth prospects, the chairman told the Milwaukee Journal Sentinel late last month.

Gou pointed to Wisconsin's advantageous geographical location, its transportation and logistics strengths, and its vibrant university and technical college system. He said Wisconsin has the assets to again become a center of manufacturing.

"You have a good foundation," he told the newspaper.

Walker said Foxconn wanted to be in the middle of the United State, near a major market like Chicago, "but not in the state of Illinois."

"Rather, in a state like Wisconsin, where we balance budgets, we have a fully funded pension system, we have a rainy day fund that's 165 times bigger than when we took office, we have a business climate that went from the bottom 10 to the top 10," Walker said.

The Washington Post piece suggests Gou and Foxconn are nothing more than big corporate teases - that Pennsylvania isn't the only state that has loved and lost a potential Foxconn development deal.

But, as Walker administration officials have pointed out in recent weeks, if Pennsylvania truly was broken-hearted about Foxconn's departure, why was it so heavily courting the deal that Wisconsin appears to be on the brink of landing? Pennsylvania was noted as several states in the running for the Foxconn project.

What's not been widely reported is the fact that Gou's $10 million commitment to Carnegie Mellon University in Pittsburgh for robotics research didn't end after the Pennsylvania economic development deal fell apart.

"Foxconn said its $10 million donation ... was 'moving forward very successfully,' with half of the funds having been spent four years later," the Washington Post reported.

Walker blames politics for the half-truths about Foxconn in Pennsylvania and elsewhere.

"As we know with other issues, there are some people who are so bothered by the idea that we might have success here, particularly because they somehow think it might be beneficial to me or to some future campaign," the Republican governor said.

"The bottom line is this is just good for Wisconsin."

MacIver News Service | August 15, 2017

By Bill Osmulski and Chris Rochester

[Madison, Wis...] Earlier this month, Moody's upgraded Wisconsin's long term debt to its highest level since 1973. Wisconsin's General Obligation rating is now Aa1 - the second highest rating, just below Aaa.

"The bottom line is, that is good for every taxpayer because it means our financial house is in better shape, and it means long term, it actually costs us less to borrow," Gov. Scott Walker told MacIver News Service Monday on News/Talk 1130 WISN.

"That's just a sign that what we've done over the last six years is working," Walker said. "We've shown that common sense conservative reforms work."

A steadily growing economy, prudent budget management, and a fully funded pension system were key reasons for the upgrade.

"The upgrade to Aa1 reflects the proven fiscal benefits of the state's approach to granting and funding pension obligations when many other states are experiencing stress from rising costs and heavy liabilities; an economy that delivers steady but moderate growth; conservatively managed budgets; and adequate liquidity," according to Moody's report.

Moody's also upgraded six other bond categories for Wisconsin.

"Since taking office in 2011, we focused on fiscal responsibility and our state's finances have significantly improved as a result," Walker said in a statement. "The upgrade in rating reflects our fiscal stability driven by bold reforms and accountable stewardship of the taxpayer's dollar. Moody's decision to upgrade our rating, for the first time since 1973, shows that Wisconsin is working."

Walker said employers like Foxconn and others are choosing Wisconsin for the same reason as Moody's credit upgrade.

"Why they're interested in growing, why they're interested in coming is because we got our act together. We're ready, we've done the right things," he told MacIver News.

Listen to MacIver News Service's full interview with Walker on News/Talk 1130 WISN here:

MacIver News Service | August 14, 2017

By M.D. Kittle and Chris Rochester

[Madison, Wis...] Foxconn Technology Group's plan to build a $10 billion high-tech manufacturing campus in southeast Wisconsin is one step closer to reality.

On Monday, the Assembly Committee on Jobs and the Economy passed an amended $3 billion incentives package - the largest in state history. The 8-5 party-line vote followed two and a half hours of committee discussion, mostly around 23 amendments to the bill put forward by Democrats on the committee earlier Monday.

"These are companies from other states coming here. Why? Because finally, the state of Wisconsin is becoming friendly to them coming here," said Rep. Joel Kleefisch (R-Oconomowoc), citing other companies that located in southeast Wisconsin like Uline and Amazon.

Borrowing an analogy used by Gov. Scott Walker, Rep. Pat Snyder (R-Schofield) compared the Foxconn deal to the Packers transforming their image by signing Reggie White. "It will suddenly say to everyone else that Wisconsin is turning the corner in the new manufacturing field that Foxconn is going to produce, and we will be a destination site for the future," Synder said.

Assembly Republicans on Friday rolled out a Substitute Amendment package with seven changes to the original incentives bill released earlier this month. The amendments sought $20 million for worker training, government positions to promote economic development statewide, and language emphasizing the hiring of Wisconsin workers first, among others.

Foxconn would receive a total of $2.9 billion in tax credits over the 15-year lifetime of a specially created Electronics and Information Technology Manufacturing Zone (EITM) - if the world's largest manufacturer of liquid-crystal display panels comes through on constructing its first North American plant in Wisconsin and fills all of the proposed 13,000 jobs, at an average annual salary of $53,875.

The bill includes up to $1.5 billion in refundable tax credits for job creation, but only jobs paying between $30,000 and $100,000 a year would be eligible.

Proponents describe the bill as a "pay-as-you-grow" incentives package.

Foxconn also would be eligible for a refundable credit of up to 15 percent of its capital expenditures in the zone. Aggregate payments for the capital tax refund could not top $1.35 billion, according to a review by the Legislative Fiscal Bureau. Credits would be paid from the state's General Purpose Revenue appropriations.

In a Break-Even Analysis, the review projects the state wouldn't begin making money on the Foxconn deal until 2042. The Fiscal Bureau notes such a timeline must be viewed cautiously, however.

"(A)ny cash-flow analysis that covers a period of nearly 30 years must be considered highly speculative, especially for a manufacturing facility and equipment that may have a limited useful life."

Such caveats meant little to opponents of the bill, who cited the potential risk to taxpayers.

"Far too many questions have been raised about whether or not this project is good for taxpayers, a good deal for Wisconsin workers and contractors, and safe for our environment for me to vote yes today," said Rep. Tod Ohnstad (D-Kenosha), the ranking Democrat on the committee.

The Fiscal Bureau memo cautions that its analysis focuses on the impacts of the Foxconn project on the state treasury. It does not take into account the other "benefits to the state's economy and residents."

While Foxconn would receive up to $1.5 billion in capital expenditure tax credits and sales tax exemptions, the incentives would "induce private investment of $10 billion from Foxconn alone, for a leverage ratio of $6.70 of private investment for each $1 of public outlay. The payroll credit would spur a leverage ratio of 5.9 to 1. And those ratios climb higher when indirect and vendor-related jobs associated with the project are factored.

"Most state expenditures do not result in private investments of this nature," the LFB report states. "The project would also provide greater employment opportunities for the state's present and future workforce, and add a new sector to the state's manufacturing economy."

The legislation exempts the Foxconn project from some DNR permitting requirements, such as wetlands review, and lifts the usual demand for environmental impact statements that has slowed previous larger-scale development projects to a crawl.

Supporters of the incentives package point out that the wetlands exemption, for instance, calls for more rigorous replacement standards, but opponents ignored that provision while criticizing the bill.

"We're a state that takes pride in our natural resources, but yet in this bill you throw that all out the window. For a company to come in...you're pretty much throwing everything that we believe in out the window for a company that, quite frankly, I don't have a lot of faith in," said Rep. Christine Sinicki (D-Milwaukee)

Ohnstad and other Democrats said the failure of their raft of 23 amendments - which were all defeated on a party-line vote - was a sign the Republicans weren't really interested in bipartisanship and a key reason for voting against the package.

The amendments would've mandated that a certain percentage of Foxconn's labor force be veterans, imposed a $20 minimum wage for employees at the proposed facility, required the company provide health insurance, and beefed up then bill's clawback language, among other provisions.

The bill is now expected to go to the Assembly floor Thursday, for what promises to be a lengthy debate before a vote.

MacIver News Service | Aug. 11, 2017

By M.D. Kittle

[Madison, Wis...] - Assembly Republicans rolled out a Substitute Amendment package Friday for their Foxconn incentives bill that Rep. Adam Neylon describes as "the very best bill we are able to draft at this time."

The Pewaukee Republican, chairman of the Assembly Committee on Jobs and the Economy, told reporters in a press call Friday afternoon that the committee will vote on the bill and its seven additions Monday afternoon.

Assembly Speaker Robin Vos (R-Rochester) said the plan is to take the amended bill to the Assembly floor Thursday. Vos said he has the votes to pass it.

"I am very confident this bill will pass on Thursday. My hope is it will do so in a bipartisan fashion," the speaker said. Republicans, generally supportive of the $3 billion incentives package, hold a significant majority in the Assembly, the largest since the late 1950s.

The amendments include:

- Wisconsin Worker Training: Provides $20 million in new funds in the next biennium to the state Department of Workforce Development. DWD would work with local universities, colleges, technical schools and nonprofits to create a plan to provide worker training and employment for suppliers, vendors, and companies impacted by Foxconn's plan to create as many as 13,000 jobs, not including the expected 10,000 construction jobs involved in building Foxconn's proposed 20 million square foot liquid crystal display complex in southeast Wisconsin.

The worker training program also directs the UW System and technical colleges to explore partnerships to provide comprehensive electronic manufacturing training.

"One of the most important priorities we had was to make sure we can continue to fill the pipeline with workers," Vos said. Not just the thousands needed to work at Foxconn and related jobs, but the positions vacated by employees leaving their current jobs for opportunities at Foxconn or within the supply chain, he said.

Wisconsin, like other states in the Midwest, faces a severe worker shortage. With an unemployment rate at levels not seen since the late 1990s, filling the pipeline becomes all the more critical.

- Promoting Statewide Economic Development: The amendment directs the Wisconsin Economic Development Corp. to hire a full-time Electronics Manufacturing Small Business Development director. The position would work with local economic development efforts "so that communities and businesses across the state can benefit" from Foxconn, according to the amendments package.

- Prioritizing Wisconsin Workers: The amendment instructs WEDC to include language in its final contract with Foxconn promoting Wisconsin workers when "practically possible."

Vos said the state cannot demand the company hire only Wisconsin workers. That would be unconstitutional.

- Transportation Bonding Accountability: The amendment requires Joint Finance Committee oversight of transportation bonding involved in the Foxconn project, principally for the Interstate 94 North-South expansion. The incentives package calls for about $250 million in General Purpose Revenue bonding, contingent on a federal match.

Vos confirmed there are no guarantees what the match will be, and amendment writers were advised not to include a specific number. Doing so, Vos said, would hurt the state's chances at securing federal funding.

- Strengthening Environmental Protections: The amendment explicitly specifies all areas where the Department of Natural Resources must maintain environmental oversight. DNR must identify and consider wetland mitigation solutions in the same watershed.

Environmentalists have raised concerns that the bill, while requiring two acres of wetland replacement for every one acre disturbed, doesn't specify where that replacement has to take place. Replacing wetlands outside the watershed does little to protect the environment of the area impacted, they say.

-Addressing Local Needs: The amendment allows tax incremental district funds to be used in the construction of fire and police stations. Local officials from Kenosha and Racine counties, where the Foxconn project is expected to be built, sought the expansive language to help them meet the emergency services needs of what promises to be a manufacturing city unto itself.

The bill also authorizes the use of local sales tax revenue bonds to pay for infrastructure needs.

And the amendments package clarifies language in the bill to ensure tax credits to Foxconn aren't paid unless the job pays a minimum salary of $30,000 per year.

Assembly Democrats blasted the timing of the release of the substitute amendment and the scheduling of the Jobs Committee hearing.

"It's remarkable that with a vote scheduled for Monday, we just received the Republican amendment," said Assembly Minority Leader Peter Barca (D-Kenosha) in a statement. "The Legislature and the public will have little to no time to review these changes. It's clear that Republicans are trying to rush through the process to avoid as much scrutiny as possible."

Neylon said that many of the amendments, at least portions of them, were suggested by Democrats.

"This isn't about doing it fast, it's about doing it right," the chairman said, adding there will be plenty of time for committee members to read the amendment proposals over the weekend before a vote Monday afternoon.

The substitute amendment doesn't include the jobs benchmarks that Senate Majority Leader Scott Fitzgerald (R-Juneau) has requested for the incentives package.

While job-creation benchmarks make sense "on the surface," Neylon said they are unnecessary based on the "pay-as-you grow" language of the bill.

"The tax credits Foxconn would earn are on jobs created that are over $30,000," he told MacIver News Service Friday on the Dan O'Donnell Show, on Newstalk 1130 in Milwaukee. In other words, Foxconn receives a tax credit check after, and only after, it cuts a paycheck for its employee.

The representative from Sturgeon Bay will sit on a task force dedicated to reworking the public education funding formula

August 11, 2017

By Ola Lisowski
MacIver Institute Research Associate

A bipartisan and bicameral group of legislators will soon be hard at work addressing the state's "broken" public education funding formula. That's according to Rep. Joel Kitchens (R-Sturgeon Bay) who says he'll be co-chairing the special task force alongside Sen. Luther Olsen (R-Ripon) as soon as work on the state budget is finished.

"I think there's a realization that the current funding formula does not work," Kitchens said, emphasizing that the complex formula "needs to be simpler and more transparent so that the public can actually understand it."

The comments came at an annual summit hosted by the Wisconsin Public Education Network, a grassroots advocacy group dedicated to traditional public education. Kitchens faced off against Rep. Chris Taylor (D-Madison) in a midday plenary session titled "Public Matters: A Conversation with Representatives Joel Kitchens and Chris Taylor." The session was moderated by longtime Milwaukee Journal Sentinel columnist Alan Borsuk.

Discussing funding for K-12 education in the current budget, both legislators agreed that they would rather see more money go through the general school aids funding formula rather than the categorical aids that are considered outside of regular revenue limits and funding. Money sent through general school aids is also part of the "equalization aid formula," which evens out disparities in school funding between property-rich and property-poor school districts.

Gov. Scott Walker's budget for the Department of Public Instruction would increase per pupil categorical aid by $200 in the first year and by another $204 in the second year, with some strings attached. Currently, most schools receive $250 per pupil in that pot of money.

"When we rewrite this, I would like to get rid of a lot of that categorical aid," Kitchens said, agreeing with Taylor. "[Superintendent] Tony Evers has his fair funding formula and I think a lot of that makes sense, as far as simplifying it, getting rid of those categorical aids, putting it actually into the funding formula where it belongs. But then that's going to require discipline in the future with governors and legislatures to stick the money where it is supposed to go, where it's designed to go."

The legislators spent nearly an hour discussing education-related issues such as school choice, achievement gaps, and funding levels, but occasionally veered off to talk about current hot topics such as Foxconn.

Taylor made clear she opposes the "corporate handout" to cheers from the audience. Any mention of Foxconn by Kitchens brought boos and hisses. Pushing back against the idea that Foxconn is only coming to Wisconsin to enrich its executives and turn them "from billionaires into multi-billionaires," as Taylor put it, Kitchens said the investment would be good for Milwaukee and its schools.

"It's happening because we want to create jobs, particularly in southeast Wisconsin," Kitchens said, interrupted by boos and hisses from the largely elderly crowd. "There's going to be public bussing to get people from Milwaukee to that plant that's built. I think that creating those jobs is really what is going to solve a lot of the problems that we have down there."

While discussing Milwaukee schools, Taylor said the voucher program "was sold as a panacea" to fix schools, but said that the only thing vouchers have done for Milwaukee is to increase property taxes.

"The voucher program was never sold - it was created by a group of people with a wide array of ideological perspectives to empower parents, unlike those attending the event in Lake Mills," Jim Bender, President of School Choice Wisconsin, said. "Now, the Milwaukee Parental Choice Program has higher ACT scores, higher graduation rates and higher college acceptance rates at a lower cost per student to local taxpayers. But inside the bubble of hyperbole and uniform thought, the truth plays no role."

Kitchens admitted that he is "not the strongest advocate of expanding the statewide voucher program," but pushed back against Taylor's partisanship on the issue.

"As much as you would like to make this a partisan issue, when Democrats were in charge they never once tried to get rid of the voucher program. So it's not something that's going away, you know, vouchers are here to stay."

MacIver News Service | Aug. 10 2017

By M.D. Kittle

[Madison, Wis...] - Senate Republicans are ready to deal with the proposed Foxconn Technology Group deal, but finishing the budget remains a priority.

Senate Majority Leader Scott Fitzgerald stepped out of a two-and-a-half-hour meeting Thursday afternoon with a bounce in his step.

"We just had an outstanding two hours in there," the Juneau Republican said of the sessions with caucus members and Walker administration officials. "I thought we made a lot of headway and got a lot of good answers."

Senate President Roger Roth said he referred the Senate Foxconn bill to the Joint Finance Committee earlier in the day, and Fitzgerald said he's hopeful JFC can get back to business for three days of budget and Foxconn bill work, Aug. 22-24.

.@SenFitzgerald on #Foxconn incentives and #WIbudget after a closed caucus on Thursday. #WIright pic.twitter.com/ucZUywZso1

"That would give them the balance of that week to try and wrap up any action on the budget," the majority leader said. "I guess I'm moving more to, the budget needs to get done first...if we can get both of these things done simultaneously, though, we would be in a good position to finish up the budget and also get Foxconn done once people are comfortable with that bill."

Senate Republicans came to the session with a lot of questions, many of them involving job creation. They want to know the timeline for hiring, not only for the potential 13,000 jobs Foxconn said it would like to create at a proposed manufacturing campus in southeast Wisconsin, but also for the thousands of construction jobs that would be needed to build a complex estimated be the size of 11 Lambeau Fields.

Fitzgerald said there was a lot of discussion about the difference between the memorandum of understanding signed by Foxconn and Gov. Scott Walker and the final contract to be worked out by the Wisconsin Economic Development Corporation.

Mark Hogan, WEDC secretary and CEO, told Senate Republicans the MOU is simply an agreement between Foxconn and the state to eventually strike a final agreement. The contract is where the rights and responsibilities of the parties are spelled out.

Hogan told the senators that one of WEDC's goals for the contract is setting benchmarks for job creation. The $3 billion incentives package, as written, would provide Foxconn with tax credits on capital expenditures and for hiring. But the bill doesn't include language that says "x amount of jobs will be in place by a certain day," Fitzgerald said.

WEDC, according to Fitzgerald, prefers the legislation as written, with perhaps one technical amendment. So does the Senate, apparently.

"Right now I don't see the Senate having a lot of amendments to the bill that was originally drafted," Fitzgerald said.

The Assembly has put together more than a dozen amendments to the bill since Thursday, when the Assembly Committee on Jobs and the Economy held a marathon public hearing on the Foxconn bill.

State Rep. Adam Neylon (R-Pewaukee), chairman of the committee, met with Fitzgerald Thursday morning and went over the proposed amendments.

Fitzgerald said the language is pretty specific, although he's not sure if some of the amendments are necessary.

He confirmed that one amendment specifically deals with the annexation of the small Racine County town of Yorkville into the Village of Mount Pleasant.

In an interview with MacIver News Service Thursday morning on the Jay Weber Show, Fitzgerald said Assembly Speaker Robin Vos (R-Rochester) is "making an anticipatory kind of judgment that (the Foxconn project) will be located in Racine and not Kenosha." Vos' district includes Racine County. Foxconn has not selected a site yet, but it is presumed that the project would be located in Racine or Kenosha counties.

"When I've spoken to the speaker about this, he has definitely given me the impression that he thinks Racine is the place it should be built and it makes more sense there," Fitzgerald said, voicing concern about an "assumption" that "Racine (County) is going to be the location and Kenosha (County) has fallen by the wayside."

Vos said the potential sites were chosen by Foxconn, not legislators.

"It's only natural for a legislator to want the development in their district," he said in a statement to MacIver News Service. "However, as Assembly Speaker, I'm looking out for what's best for all of Wisconsin for the benefit of the entire state. We want this legislation to become law so thousands of jobs and billions of dollars in economic development can come to the state."

On the budget front, it appears full repeal of the business-hated personal property tax isn't in the cards this session. Fitzgerald said there are growing concerns of a softening economy and what that might do to state revenue. He said the goal is to find at least some of the approximately $240 million needed to eliminate the tax, about $120 million on the high end, and hold some cash back to deal with any potential cash flow issues.

"I think we have to be serious about it and see what we could do to address it," the majority leader said.

MacIver News Service | Aug. 10, 2017

By M.D. Kittle

[Madison, Wis...] While supportive in principle of the proposed $3 billion Foxconn incentives package, Senate Majority Leader Scott Fitzgerald has no intention of Pelosi-ing the process.

"The idea that we pass the bill now and we'll read it later is not going to work. It's not going to work in the Senate, never has worked in the Senate," the Juneau Republican told MacIver News Service Thursday on the Jay Weber Show, on NewsTalk 1130 in Milwaukee.

It was U.S. Rep. Nancy Pelosi (D-Calif.) who famously - or infamously - said in 2010 that Congress needed to "pass the bill [Obamacare] so you can find out what's in it..."

Pelosi was criticized for not being as deliberative as many would have liked. Fitzgerald has no intention of making that mistake.

But could the Senate's usual sluggish pace cost Wisconsin what has been referred to as a "once-in-a-century" economic development deal - a project expected to create a city of tech manufacturing, employing 13,000 people within the next five years and contributing billions of dollars to the Badger State economy?

Fitzgerald doesn't think so. As of Thursday morning, the senator said he didn't have the votes to pass the bill. But then again, Fitzgerald said, he hasn't seen the dozen Assembly amendments now tied to the incentives package.

"If there's one thing I've learned how to do in the 10 years I have been Republican leader in that caucus is to be able to count noses," he said, adding that not having the votes now doesn't mean that the bill ultimately won't pass.

"I do think it will pass, in one form or another, and I think the project will move forward. But I have not sat down individually or even as a caucus until today to say, 'What do you guys think about this? Where are you at?'"

Republican senators are expected to caucus this afternoon. They will receive an overview on the Foxconn legislation and the potential impact of the project from the heads of the state Department of Administration and the Wisconsin Economic Development Corp., Fitzgerald said.

The Senate has been left out of the loop on key elements of Foxconn, he reiterated.

"I was at a barbecue at the governor's mansion approximately a month ago. That was the first time I was ever even introduced to the idea of Foxconn or what Foxconn was or how this relationship exists between those that work with Foxconn and their American counterparts," Fitzgerald said.

Assembly leaders, however, counter that the bill was introduced nine days ago, the Assembly Committee on Jobs and the Economy held a nearly 11-hour hearing on it a week ago, and the Legislative Fiscal Bureau has released a detailed report on the incentives package's fiscal impact on the state treasury. Much is now known about the bill, they say.

But there are many more questions, Fitzgerald said.

"The thing that's missing right now is if they [Foxconn] don't live up to the job creation kind of on the short-term basis and hit the benchmarks moving out from there," the majority leader said. What happens if a year from now, two years from now, nothing happens, and no jobs have been created? What happens to the investments local government and the state have made in building the infrastructure for a project slow to materialize?

"I think that's just as big a concern as making sure taxpayers are protected and it's kind of fuzzy as to whether or not it's included in the bill or something negotiated between DOA and Foxconn," Fitzgerald said.

He reiterated that finishing the state budget remains the Senate's priority. Fitzgerald said he's "hopeful" the Joint Finance Committee will be back in business either "late next week or early the following week."

"We have about a three-day period that not only can we do a public hearing, not only on Foxconn, but then if we're able to pull this together we could have the finance committee complete their work on the budget, which tees it up for both houses to take up the budget anytime after that," he said.

Listen to MacIver News Service's full interview with Fitzgerald on News/Talk 1130 WISN here:

MacIver News Service | Aug. 9, 2017

By M.D. Kittle

[Madison, Wis...] There appears to be a communication gap - again - between Assembly Republicans and their GOP brethren in the Senate.

Senate Majority Leader Scott Fitzgerald expressed his disappointment Wednesday that the Senate has not been contacted about the changes to an incentives bill for Taiwanese tech titan Foxconn Technology Group.

With an aggressive timeline in place, Fitzgerald hoped to be "looped in" about the bill's dozen or so amendments proposed by this point, Myranda Tanck, communications director for the majority leader, told MacIver News Service.

"This office has not been included, and to our knowledge the Senate has not been included in the amendment [conversation]," Tanck said.

The Assembly Committee on Jobs and the Economy is overseeing the bill, which includes $3 billion in tax credits and other sweeteners in return for Foxconn coming through on its pledge to build a $10 billion LCD panel manufacturing campus in southeastern Wisconsin. Foxconn says it plans to create 13,000 jobs and infuse billions of dollars into the Badger State economy with its first foray into manufacturing in North America.

Last week, the committee held a nearly 11-hour public hearing, which contributed to at least 50 amendment ideas, according to state Rep. Adam Neylon (R-Pewaukee), chairman of the committee.

Neylon said the Committee on Jobs and the Economy expects to vote on the bill and its amendments either Monday or Tuesday next week. If approved, the bill could go to the Assembly floor later in the week, Neylon said.

As to Fitzgerald's concerns, Neylon said his committee has had its hands full just trying to get this bill through, "let alone thinking about the entire Assembly and the Senate."

"They certainly play an important role in all of this, and there will be ample time for them this month to work on their side of the equation," he said.

Last month's memorandum of understanding signed by Gov. Scott Walker and Terry Gou, Foxconn founder and chairman, stipulates the incentives package must be completed by the end of September.

The Senate majority leader said he believed that timeline was pretty fast, with so much that needs to be completed on an economic development project of unprecedented scale. Senate leadership plan to open their version of the bill in the Joint Finance Committee.

While members of the Committee on Jobs and the Economy have expressed their interest and willingness to work with Assembly Democrats on amendments, they haven't extended the same courtesy to fellow Republicans in the Senate, according to legislative insiders.

"Sen. Fitzgerald said from the beginning that he hoped this would be a bipartisan piece of legislation when it was brought to the Legislature," Tanck said. "He thinks this (lack of cooperation) could delay passage of the bill if the Senate is unfamiliar with what's in the amendments of this bill."

Senate Republicans plan to caucus Thursday. Tanck said executives from the Wisconsin Economic Development Corp., the agency charged with administering the incentives, will be in attendance to go over the details.

Fitzgerald reiterated to reporters again Wednesday that the Senate's priority is to finish the budget, which is now nearly six weeks late.

He's concerned about a Legislative Fiscal Bureau report issued this week that shows it could take about 25 years for the state to break even on the Foxconn deal.

"The Fiscal Bureau did indicate it hasn't dealt with something of this magnitude," Tanck said of the Foxconn project. "But the majority leader certainly wants to approach this proposal with the due diligence that's required."

The Fiscal Bureau memo cautions that its analysis focuses on the impact of the Foxconn project on the state treasury. It does not take into account the other "benefits to the state's economy and residents."

While Foxconn would receive up to $1.5 billion in capital expenditure tax credits and sales tax exemptions, the incentives would "induce private investment of $10 billion from Foxconn alone, for a leverage ratio of $6.70 of private investment for each $1 of public outlay. The payroll credit would spur a leverage ratio of 5.9 to 1. And those ratios climb higher when indirect and vendor-related jobs associated with the project are factored.

"Most state expenditures do not result in private investments of this nature," the LFB report states. "The project would also provide greater employment opportunities for the state's present and future workforce, and add a new sector to the state's manufacturing economy."

Neylon said the Legislature is capable of working simultaneously on the Foxconn proposal and the state budget.

"It makes sense to want the budget completed, but it's important to do our due diligence to have (the Foxconn package) done by the end of September," he said. "It's important to live up to those terms of the negotiations."

MacIver News Service | Aug. 9, 2017

By M.D. Kittle

[Madison, Wis...] - When DNR Deputy Secretary Kurt Thiede told a legislative committee last week that Taiwanese tech giant Foxconn would be able to move more efficiently through the state's environmental regulatory process, you could forgive businesses across Wisconsin for thinking, "That sounds good. I'll have what Foxconn is having."

Thiede told the Assembly Committee on Jobs and the Economy that a proposed $3 billion state incentives package would streamline the paperwork pileup, reducing the usual duplicative red tape.

"From a timeline perspective, we still believe the project can go forward expeditiously and have the regulatory framework in place to make sure the environment is protected," the Department of Natural Resources official said.

But what about all the other businesses (including 440,000 small businesses) currently in Wisconsin that don't or won't get the Foxconn treatment when it comes to government regulation?

Conservative lawmakers like state Rep. Adam Jarchow (R-Balsam Lake) have said, if it's good enough for Foxconn, it should be good enough for businesses of all sizes.

Scott Manley, Vice President of Government Relations for Wisconsin Manufacturers and Commerce, said the Foxconn effect could provide a "proof of concept" for greater regulatory reform.

"I think one of the things we have an opportunity to do with this project is to demonstrate to the people of Wisconsin that the streamlining reforms in this bill, when applied to a project of the magnitude and scope as the Foxconn project, is that we will essentially do a proof of concept, that, yes, we can streamline things and still have great environmental outcomes," Manley told MacIver News Service this week on the Dan O'Donnell Show on NewsTalk 1130 WISN in Milwaukee.

"I think it's a tremendous opportunity to demonstrate that we can make changes to the old way of doing things, the old command-and-control, government-centric way of regulating businesses, and once we've got that proof of concept established, I think policymakers would be much more likely to want to migrate that to all businesses as a whole," he added.

Manley and others have described as "modest" the proposed changes to DNR procedures in the Foxconn incentives legislation now in the Assembly.

The legislation exempts the Foxconn project from some DNR permitting requirements, such as wetlands review, and lifts the usual demand for environmental impact statements that has slowed previous larger-scale development projects to a crawl. Supporters of the proposed incentives package point out that the wetlands exemption, for instance, calls for more rigorous replacement standards.

"It does not exempt any business from having to meet Wisconsin's stringent air and water quality standards or the federal air and water quality standards," Manley said.

State development officials say regulators must move swiftly on Foxconn's plan to build what amounts to a manufacturing city in southeast Wisconsin to serve its first liquid-crystal display panel production operation in North America.

State Rep. Adam Neylon (R-Pewaukee), chairman of the Committee on Jobs and the Economy, said not every economic development project is alike - or equal for that matter.

"Every project is different and requires a different approach," he said, turning to a sports analogy to illustrate his point.

"Putting money into venture capital or money into investing in a start-up or entrepreneurs is a lot like a draft where you select prospects and you hope one comes to fruition," Neylon said.

Foxconn, the lawmaker said, is an "MVP all-star" that wants to come into Wisconsin and make an immediate and long-lasting difference on the state's economy.

Still, Neylon asserts the state should be looking at how to help other companies in Wisconsin alleviate regulatory burdens. Bills like the "Regulations from the Executive In Need of Scrutiny," or REINS, Act, which Walker is expected to sign into law Wednesday, are aimed at bringing regulatory relief to all business, Neylon said.

Also on Tuesday, the Mercatus Center at George Mason University released a new report analyzing the Wisconsin Administrative Code. The report, "A Snapshot of Wisconsin Regulation in 2017," finds the Code contains nearly 160,000 total regulatory restrictions and 12 million words that impact the state's economy. With more than 55,000 regulations alone, the Department of Natural Resources is the most burdensome regulatory agency in the state.

"This is an interesting conversation to have because we see a path to growth, and if we're able to fit more companies in that path, streamline the regulatory process for more companies, that's definitely a conversation to have," Neylon said.

Listen to MacIver News' interview with WMC's Scott Manley on NewsTalk 1130 WISN here:

As Walker signs the REINS Act into law, a new report examines the extent of Wisconsin's regulatory code

August 9, 2017

By Ola Lisowski
MacIver Institute Research Associate

[Washington, D.C...] A brand new report has found that Wisconsin's administrative code contains nearly 160,000 regulatory restrictions. The report was published by the Mercatus Center at George Mason University, a market-oriented academic research center.

It would take the average person 667 hours, or almost 17 weeks, to read the 2017 Wisconsin Administrative Code, assuming that person spent 40 hours per week reading at a consistent rate of 300 words per minute. Utilities, food manufacturing, and chemical manufacturing are the top three most-regulated industries in Wisconsin, according to the report.

The Mercatus report also examined the number of regulatory restrictions by department. The Department of Natural Resources (DNR) has the most regulations of any department in Wisconsin by far, with more than three times the number of restrictions of the next agency on the list, the Department of Health Services (DHS).

Together, DNR and DHS account for 45 percent of all restrictions in Wisconsin's code.

Wisconsin businesses must comply with all regulations to operate legally, and state-level regulations are just one layer. The federal code has over 1.15 million additional restrictions.

Gov. Scott Walker's administration has made regulatory overhaul a priority, pointing to regulations as a stymie for business growth, success, and entrepreneurship. Walker is expected to sign the REINS Act into law today, making Wisconsin the first state to pass the law. The REINS Act will require legislative approval before any rule or regulation with an economic impact greater than $10 million goes into effect.

James Broughel, a co-author of the Mercatus report, praised Wisconsin's progress passing the REINS Act and called for the regulation-cutting momentum to continue.

"With passage of the REINS Act, Wisconsin is changing how states keep new regulatory burdens to a manageable level. But an effective look back process analyzing old regulations is also important. With nearly 160,000 regulatory restrictions already on the books, this will be the next frontier for regulatory reform in the Badger State."

MacIver News Service | Aug. 8, 2017

By M.D. Kittle

[Madison, Wis...] - A new memo from the nonpartisan Legislative Fiscal Bureau details a hefty state commitment to the mammoth Foxconn economic development plan with a lengthy break-even schedule.

But the LFB acknowledges it has no way of accounting for all the potential positive economic impacts the proposed Foxconn manufacturing campus could bring.

The analysis, released Tuesday, was among state agency memos breaking down the fiscal impact of the proposed $3 billion in incentives tied to the estimated $10 billion project.

Foxconn would receive a total of $2.9 billion in tax credits over the 15-year lifetime of a specially created Electronics and Information Technology Manufacturing Zone (EITM) - if the world's largest manufacturer of liquid-crystal display panels comes through on constructing its first North American plant in Wisconsin and fills all of the proposed 13,000 jobs, at an average annual salary of $53,875.

An incentives package bill introduced last week in the Assembly provides Foxconn with refundable tax credits for each job it creates paying between $30,000 and $100,000. The credit would be based on 17 percent of the company's payroll in the EITM zone, for a total of up to $1.5 billion in tax benefits.

As the LFB points out, Foxconn plans to have about 1,000 permanent positions in Wisconsin this year (at an estimated payroll of $13.8 million), with plans to increase its workforce to 13,000 positions and a total annual payroll of $700 million by the beginning of 2021.

State payments of the payroll tax credit are estimated to begin in 2018-19, at $2.4 million, rising to $119.1 million annually between fiscal years 2023 and 2033. That assumes Foxconn's workforce remains at 13,000 from 2021 through 2033.

And Foxconn would be eligible for a refundable credit of up to 15 percent of its capital expenditures in the zone. Aggregate payments for the capital tax refund could not top $1.35 billion. Credits would be paid from the state's General Purpose Revenue appropriations.

State capital tax credit payments to Foxconn would total $192.9 million annually in fiscal years 2020 through 2026, according to LFB.

"The company would receive the full amount of credit, even if it has little or no Wisconsin income or franchise tax liability," the LFB analysis states.

The state Department of Administration projects the "cost" of the refundable state tax credits under the incentives package would exceed the potential increased tax revenue until fiscal year 2032, when the last EITM payroll credit is paid.

But as project supporters note, the tax benefits wouldn't exist without Foxconn building and hiring in Wisconsin. They call it a "pay-as-you-grow" economic development proposal.

In that vein, Foxconn and its contractors would save $139 million through a sales and use tax exemption, according to the LFB report.

"However, since it is highly unlikely that Foxconn would locate in the state without the incentives provided under the bill, this amount should not be viewed as a state revenue loss," LFB notes.

In a Break-Even Analysis, the DOA projects the state wouldn't begin making money on the Foxconn deal until 2042. The Fiscal Bureau notes such a timeline must be viewed cautiously.

"(A)ny cash-flow analysis that covers a period of nearly 30 years must be considered highly speculative, especially for a manufacturing facility and equipment that may have a limited useful life."

Democrats critical of the bill, particularly those mulling a run for governor, fired out press releases insisting the LFB analysis shows that the incentives package is nothing more than a taxpayer giveaway to a company that posted $136 billion in revenue in 2015.

"As today's memo shows, Wisconsin taxpayers are assuming 100% of the risk of this proposal, and we are smart to be skeptical of the deal and ask questions," state Rep. Gordon Hintz (R-Oshkosh), on a growing list of potential Democrat candidates for governor, said Tuesday.

The Fiscal Bureau memo cautions that its analysis focuses on the impacts of the Foxconn project on the state treasury. It does not take into account the other "benefits to the state's economy and residents."

While Foxconn would receive up to $1.5 billion in capital expenditure tax credits and sales tax exemptions, the incentives would "induce private investment of $10 billion from Foxconn alone, for a leverage ratio of $6.70 of private investment for each $1 of public outlay. The payroll credit would spur a leverage ratio of 5.9 to 1. And those ratios climb higher when indirect and vendor-related jobs associated with the project are factored.

The LFB notes #Foxconn incentives would yield $6.70 of private spending for each $1 of public money. Bucks Arena yields $3.#wipolitics pic.twitter.com/pfzJf4lXxh

"Most state expenditures do not result in private investments of this nature," the LFB report states. "The project would also provide greater employment opportunities for the state's present and future workforce, and add a new sector to the state's manufacturing economy."

Then there are the trades jobs needed to construct a dozen or more buildings on the proposed 20 million-square-foot manufacturing footpad. DOA estimates peg an average annual employment of some 10,200 construction workers and equipment suppliers earning average total compensation of $59,600 during the four-year construction period. Total income is estimated at $2.4 billion.

Another 6,000 indirect and related jobs are estimated to be created during construction, with average compensation of $49,900, according the Fiscal Bureau report. The total increased state tax revenue - primarily income and sales taxes - associated with the construction period is estimated at nearly $190 million.

DOA estimates a total of 22,000 indirect jobs and those secondary positions (suppliers) supporting Foxconn's operations will be created, with combined annual wages of $1.1 billion per year beginning in 2021.

"The way to judge this project is not by government revenues, not by government figures. It's what it means to our overall economy," said state Rep. Adam Neylon (R-Pewaukee), chairman of the Assembly's Jobs and Economy committee. The committee held a hearing on the bill last week.

Foxconn "will grow our GDP, it will have a tremendous impact on our economic activity in the state. A lot of people will benefit because of this incentives package. We have a situation where we will be attracting talent instead of losing it," Neylon added. "It's a mistake to think that government revenue is the end goal. The ultimate goal is economic benefit, not how much more state government can take in and spend."

Neylon said his committee still plans to vote Thursday on the bill, with amendments. The lawmaker says he has received at least 50 amendment ideas on the legislation since the bill was introduced last Tuesday, from technical matters to more significant issues such wetland relocation.

"I think reading these new fiscal analyses reaffirms a lot of what we were told during the public hearing and what we were led to believe," Neylon said. "It also exposes some areas we are working on to clean up or clarify or make sure there are safety nets in place within the language of the legislation."

August 8, 2017

Perspective By Chris Rochester
MacIver Institute Communications Director

Legislative Democrats and the head of left-wing Citizen Action of Wisconsin are pushing a new scheme to get more people hooked on government benefits. Despite the abundance of lessons to be learned from the ongoing failure of government-run healthcare, they are proposing opening up BadgerCare - Wisconsin's health insurance program for the poor - to anyone willing to pay the monthly premium.

Wisconsin Democrats are serious about this. They even had the non-partisan Legislative Fiscal Bureau run an analysis on their plan - and then completely ignored the dire warnings they got back.

The Legislative Fiscal Bureau memo pointed out the reality that opening up BadgerCare Plus to anyone willing to pay the full premiums would do significant damage to the current program. To summarize LFB's warning: the more people on BadgerCare, the fewer providers will accept it because reimbursement rates from the government are so low. That means decreased access to health care for the state's most vulnerable populations.

"These [Medicaid] reimbursement rates are generally well below rates paid by commercial health care plans, which likely has the effect of restricting the number of medical providers who are willing to participate in the program, as well as the extent of their participation," warned Jon Dyck, LFB supervising analyst, in the June 2 memo.

In other words, Medicaid regularly stiffs healthcare providers by paying less than the full cost of services provided. Nationally, Medicaid pays only 52 cents for every dollar that private insurers pay. So if we push more of our citizens into BadgerCare, fewer doctors will accept BadgerCare patients because of the lousy reimbursement rate and access to health care will only get worse.

Dyck continued, "The expansion of the number of persons who receive coverage under the buy-in proposal could exacerbate provider access problems."

That didn't stop Sen. LaTonya Johnson (D-Milwaukee) and Rep. Eric Genrich (D-Milwaukee) from introducing the bill, AB 449, that lets anyone sign up for BadgerCare Plus as long as they're willing to pay an estimated $600 average premium.

Supporters of the bill insisted it will not result in any additional costs to the state at a press conference rolling out the ill-advised proposal. "This costs the government, the state of Wisconsin, nothing, no extra money," insisted Citizen Action of Wisconsin Executive Director Robert Kraig, who led the Democrats' press conference. "It's a simple bill with no fiscal impact whatsoever."

But the LFB went on to strongly hint that that's not true, either. The federal government sets requirements for provider access rates, which means the state could end up paying more for BadgerCare because of the 'public option.'

"It may be necessary to increase reimbursement payments in order to meet minimum provider access requirements under federal Medicaid regulations. Any such increase would increase the cost associated with providing coverage and also increase the amount of the premiums paid for coverage," wrote Dyck.

The concerns over BadgerCare For All's impact on health care access makes the question of how many people would actually sign up an important factor, but no one responding to questions at the 'public option' rollout knew how many people would be interested in enrolling.

"That's a super good question. I think the LFB didn't know, basically," Kraig said when a reporter asked him how many people they expected would buy into the program.

During the press conference unveiling the 'public option,' Genrich even seemed to contradict the LFB memo. "It would be more affordable and more comprehensive than most other plans, and it would be able to hold the cost of prescription drugs that continue to skyrocket," the Democrat said.

The LFB memo, on the other hand, states cost estimates "exclude the impact of prescription drug manufacturer rebates that the program receives, since the federal Medicaid law under which these rebates are paid would not be applicable to the proposed buy-in population."

Compounding the LFB's warning that expanding BadgerCare could reduce access to care and could end up costing taxpayers more money is evidence that Medicaid recipients don't actually have better health outcomes compared with people with no insurance at all.

A sprawling, now-infamous study in Oregon found that participation in Medicaid "generated no significant improvement in measured physical health outcomes," compared with people with no insurance at all, according to health care expert Avik Roy.

Medicaid's low reimbursement rates limit patients' access to care, which could explain why health outcomes didn't improve. The Oregon study also found that Medicaid enrollees visited the emergency room 40 percent more often than the uninsured.

There are also other notorious examples of the failures of government-run healthcare boondoggles like the scandal-plagued VA system, rationing of care in the UK (the Charlie Gard case comes to mind), and of course, Obamacare, which is devastating individual insurance markets across the country.

While long on vague, unsubstantiated claims about access to care and cost to taxpayers, the Democrats and Kraig did offer something unambiguous in their "BadgerCare For All" proposal: Obamacare isn't working and the cost of health care is still too high.

"Republicans I think offered some fairly cogent critiques of the affordability issues and access issues that are ongoing in this country," Genrich offered tepidly after Kraig explained that the motivation for the bill is the spiraling cost of health insurance in the Obamacare era.

Their solution - another big, open-ended government program to patch over the failures of another - is diametrically the wrong approach.

Reagan was right when he famously said, "The more the plans fail, the more the planners plan." BadgerCare For All is one plan that should go straight into the circular file.

MacIver News Service | Aug. 7, 2017

By Tyler Brandt and M.D. Kittle

[Madison, Wis...] - Here's a marketing tip for the folks at the Transportation Development Association: If you're going to make a hyperbolic video about a bumpy state road putting children's education and lives in peril, at least pick the right road.

In May, the TDA, in its push to drain more money from taxpayers to fatten the wallets of road builders, rolled out a manipulative video that all but screams, "Think of the Children!"

"Let's Ride The Bus in West Salem, Wisconsin," as the video is billed, is taken from the view of a school bus jostling down a two-lane highway - Wisconsin Highway 108 in La Crosse County. The bus bumps along to the strains of the children's song, "The Wheels on the Bus," the bouncy chorus suddenly replaced by the sounds of the bus' tires rumbling over the worn road.

In the video, Troy Gunderson, superintendent of the West Salem School District, insists the portion of 108 is merely a "sample of many of the roads in which we travel in every direction with our children, so we're seeing a lot of excessive repairs on buses, from bent rims to shattered glass to mirrors flying off."

Wow.

The message is clear: Pony up taxpayers to repair this awful road or West Salem school buses will be nothing more than axels, transmissions and seats.

"Every time we have to repair the undercarriage on a bus, It's just one less computer, one less book or part of one less teacher that we can't have for our kids," the superintendent said.

But there are a few details the TDA leaves out of its "Think of the Children!" video.

State Highway 108, captured in the video, was put on the DOT's project list in 2015 and is currently in the design phase for an $800,000 maintenance project. The letting is scheduled for 2020. In other words, this road that Gunderson says is in desperate need of repair is going to be repaired.

In addition, if the road truly constitutes a crisis as indicated in the video, local committees have the power to prioritize projects.

"County highway committees, MPO's (Metropolitan Planning Organizations), local officials, legislators and the public all suggest candidate projects," the DOT notes. "In addition, any projects considered, but not selected, in the last program are also included as candidates." And, "Regions evaluate candidate improvement projects by considering such things as priority of need, use and local interest."

MacIver News reached out to the La Crosse Area Planning Committee (LAPC), the local committee in charge of Highway 108. LAPC is responsible for distributing federal Surface Transportation Program (STP) funds to local projects, as well as prioritizing state road projects.

The planning committee didn't seem to think the road was as big a crisis as indicated in the TDA video. LAPC didn't make any effort to elevate the project. In fact, it never told DOT to re-prioritize any of its projects in the area.

"I don't know that couldn't happen, there just hasn't ever been a need to do that (re-prioritize projects)," Jackie Eastwood, Transportation Planner for LAPC, told MacIver News.

But what about the children? How many fewer computers, books, how many parts "of one less teacher" will the kids of West Salem schools have to endure before the roads are repaired?

Gunderson did not respond to MacIver News Service's requests for comments.

Debbie Jackson, TDA's director of Marketing and Business Affairs, said the organization interviewed Gunderson about the impact of area road conditions on the district's budget, "not Highway 108 specifically." Jackson pointed to Gunderson's statement in the video about 108 being just a "small sample" of the roads the buses travel in the district.

Perhaps. But why did Gunderson and TDA focus on a highway that is scheduled for repairs and could have been repaired sooner? If 108 is indeed "just a small sample" then why not feature any one of these "many" roads.

The TDA video is one of but many examples of a campaign of half or manipulated truths from a coalition of road builders and their allies in government in an effort to squeeze more money - indefinitely - out of taxpayers.

Are there roads in horrible shape in Wisconsin? Absolutely. Are there funding constraints? Certainly. But governing is about priorities, and the Highway 108 case is a perfect example of that. It's also Exhibit A on how the road-building lobby has tried to manipulate the debate.

The video is akin to a recent astroturf campaign, exposed by MacIver News, in which the same names kept popping up in letters to the editor in newspapers across the state - each letter with strikingly similar language, each begging the state for more transportation money.

Just as in the astroturf campaign, the TDA's video stunt ignores reality in favor of a faulty narrative.

MacIver News Service | Aug. 3, 2017

By M.D. Kittle

[Madison, Wis...] - We're ready.

That was the unified message of dozens of public and private-sector officials - from Kenosha to Wausau - in testimony Thursday before the Assembly committee leading legislation on a $3 billion state incentives package for the "once-in-a-century" Foxconn Technology Group economic development proposal.

"Ladies and gentleman, close this deal. Make it happen," Tom Christensen, administrator of the Racine County village of Caledonia which could directly benefit from Foxconn's plan to build a $10 billion liquid crystal display manufacturing campus in southeast Wisconsin.

Waves of supporters testifed before the Assembly Committee on Jobs and the Economy during an all-day hearing that spanned deep into Thursday night.

There were critics to be sure, including the Wisconsin League of Conservation Voters and a "cannabis activist" who urged the committee to ditch Foxconn and subsidize the pot industry instead.

But the vast majority of those who testified laid out myriad reasons why they believe Foxconn would transform Wisconsin's economy and why the state must act quickly to make it happen.

"The time to worry about Foxconn leaving is now," said Tom Still, president of the Wisconsin Technology Council. "If this process takes too long, now is when they will leave. They will not leave after they've invested $10 billion."

The economic impact figures command attention.

Secretary of Administration Scott Neitzel testified about the 10,000 construction workers who would be employed over the next four years, with an estimated $5.7 billion spent on construction over the period and an annual $1.4 billion spent in the supply chain.

Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce, noted the estimated $15 billion in payroll over 15 years that Foxconn could bring to Wisconsin.

"I think that's a pretty good return on investment," Sheehy told committee members, noting the $1.5 billion the state would offer in job creation-based tax credits.

Wisconsin's higher education community testified to what has been described as the "brain gain" the Foxconn project would foster.

"Foxconn would help keep these highly educated graduates in Wisconsin," University of Wisconsin System President Ray Cross testified.

Foxconn Chairman Terry Gou and Gov. Scott Walker have said Wisconsin universities and tech schools and the "talent pipeline" they create are a strong selling point for Foxconn's decision to build its first high-tech manufacturing plant in North America.

While gushing at the potential, higher ed leaders took the opportunity to remind lawmakers that colleges and tech schools are going to require more money to create the programs and facilities needed to turn out the engineers and skilled technicians necessary to feed a massive workforce.

Asked if the university system would need more funding in this budget, Cross said now's the time to make investments that will pay off in a few years.

"It takes us a while to turn a big aircraft carrier," he said of the UW System.

Local government officials in Kenosha and Racine counties were unified in their support for an unprecedented economic development project expected to be located in their backyard. But they, too, urged the state to come up with the funding they'll need to get Foxconn off the ground.

Kenosha County and city officials said the local governments involved should be included in any "clawback" provisions to recoup costs should the deal go bad. And they asked for changes to the tax incremental finance laws to include public buildings, such as fire and police stations. Foxconn isn't merely building a plant; it's constructing a city unto itself, to be situated on some 20 million square feet and populated by thousands of employees.

The bill puts state taxpayers on the hook for local development costs under a "Moral Obligation Pledge." The Legislature would, if called upon to do so, pay up to 40 percent of the principal and interest of a local government's obligations.

The deal, as written, would include $1.5 billion in tax credits, in return for creating 13,000 jobs. Payroll tax credits would be distributed on full-time jobs paying between $30,000 and $100,000 per year. Another $1.35 billion in tax credits would help ease the company's capital costs. And $150 million in sales and use tax credits could be drawn on purchases of building materials, supplies and equipment used in the construction of the complex.

Neitzel and others who helped craft the incentives package assert its a "pay-as-you-grow" proposal, meaning Foxconn wouldn't be able to collect on the tax benefits until they invest in capital - human and structural.

But critics insist there are better things Wisconsin could spend $3 billion on.

Robert Kraig, executive director of the left-wing Citizen Action Wisconsin, asserts that health care, education, or clean energy would create significantly more jobs than Foxconn's development plan. Of course, no other Fortune 500 company (Foxconn is #27) offered to transform Wisconsin's economy.

Kraig, in his usual bombastic way, hammered the Wisconsin Economic Development Corp., the agency charged with administering much of the economic development package. WEDC does indeed have a troubled past, particularly in tracking incentives and holding wayward firms accountable. Kraig said putting WEDC in charge of the incentives package is a "scandal waiting to happen."

Citizens Action is a big advocate of expanded welfare benefits and other liberal causes.

"We often hear that we don't have the resources to invest in health care and higher education, but when a multi-national company comes knocking we find $3 billion for them," Kraig said.

Proponents of the bill say that kind of thinking is disingenuous at best. The return on investment, they say, is even more significant than the billions of dollars Foxconn would bring to Wisconsin.

"We could go from flyover to destination state pretty quickly because of this," Still, of the technology council said.

Opponents testified that they fear the process is moving too fast. The Assembly introduced the bill Tuesday, scheduled a hearing two days later, and the Jobs and Economy committee could vote on whether to move the bill along by early next week. There are, however, several more steps in the legislative process, not the least of which is action from the traditionally more deliberative Senate.

Mark Hogan, secretary and CEO of WEDC said it's important to secure passage by the end of September in order to meet Foxconn's aggressive construction and production schedule.

"Foxconn is ready to go," he said. "They would like to be hiring for some operations without even having construction in place."

Environmentalists spoke in opposition to the bill's provisions exempting some regulatory requirements from the project. The project loosens permit requirements involving wetlands and environmental impact statements, although the Department of Natural Resources testified that the bill only streamlines the regulatory process and limits duplication. The federal environmental requirements would be as rigorous as always, according to state agents.

But Jennifer Giegerich, of the Wisconsin League of Conservation voters, testified that her organization is concerned about the removal of wetlands, even though Foxconn would be required to replace 2 acres of wetlands for every acre it disrupts.

"We want to make sure our economy is as healthy as our air and our streams," Giegerich said.

Madison resident Tammy Wood, voiced a number of misgivings about the bill. Principally, Wood told the committee the state should be investing in a higher calling.

She said Wisconsin should put its money on pot, not Foxconn. Wood, vice chairwoman of the Progressive Caucus of the Democratic Party of Wisconsin, pointed to places like Colorado and the booming legal marijuana market.

"The cannabis industry is set to employ more people by 2020 than manufacturing," Wood said, adding that many of the jobs are so easy kindergarten kids could work in the cannabis industry - although she says she doesn't believe in child labor.

"I know you're passionate, but if we could stick to the bill and not the cannabis industry," state Rep. Adam Neylon (R-Pewaukee), chairman of the Jobs and Economy Committee, urged Wood.

Reefer madness aside, supporters of the incentives package insist the time is now to positively affect Wisconsin's economic future for generations to come.

The Foxconn deal "will provide significant dividends to the state of Wisconsin for years to come," Neitzel said.

MacIver News Service | Aug. 2, 2017

By M.D. Kittle

[Madison, Wis...] - A state lawmaker who helped craft reforms to Wisconsin's John Doe law, is again pushing for a special legislative committee to investigate the state's politically driven John Doe investigations into dozens of conservative groups and the campaign of Gov. Scott Walker.

State Sen. David Craig (R-Town of Vernon) said his renewed call for the bicameral committee is all the more urgent in the wake of MacIver News Service investigative story this week on former Wisconsin speech cop Kevin Kennedy.

Kennedy, the former director of Wisconsin's defunct Government Accountability Board publicly discussed the John Doe probe in December in New Orleans at an international conference of government campaign finance officials. Sources say Kennedy lauded a September 2016 Guardian story that included hundreds of pages of leaked court-sealed documents from an abusive campaign finance investigation the Wisconsin Supreme Court found unconstitutional and ordered shut down.

Kennedy, who retired in June 2016 days before the state shut down the GAB and replaced it with the Wisconsin Ethics Commission, was an admitted officer in the John Doe investigation. A secrecy order remains in effect for officers of the Doe. Violators are subject to stiff penalties, including jail time and fines.

Kennedy made his public comments as the state Department of Justice was launching a criminal investigation into the Guardian leaks.

"I think it's beholden on the Department of Justice to make sure if the law was broken that it's investigated to the fullest, as they would do in any other situation when John Q. Citizen is accused of violating the law," Craig said. "There should certainly not be any lesser standard for someone who is charged with executing the campaign finance and ethics laws in the state of Wisconsin."

DOJ spokesman Johnny Koremenos said the agency's investigation continues.

"We have an ongoing criminal investigation into the Guardian leaks and cannot provide comment on any details at this time," he said Tuesday in an email.

The DOJ reportedly has seized files and other materials from the Ethics Commission office, and it has sought outside legal counsel to represent staffers during questioning.

Craig said it's the Legislature's responsibility to make sure "the horrible acts by government under the John Doe investigations never happen again."

"We cannot do that as a Legislature without making sure that we know all of the problems inside the agency," the lawmaker said.

To that end, Craig said he wants to take another shot at a bill that would create a legislative committee with the power to subpoena witnesses and investigate the John Doe investigators.

Last session, a bill by Craig and other Republican lawmakers would have created the oversight committee to examine closed John Doe probes, as well as the wider use of police technology, such as electronic surveillance devices.

The legislation met with resistance from the law enforcement community.

"We took on probably more than one faction," Craig said. "And to have both of those issues going on simultaneously allowed the opposition to hide behind one of those, even though they may be opposed to the other."

Craig said he's weighing whether to split the two elements of the bill, dealing separately and primarily with investigation of the John Doe.

State Sen. Tom Tiffany (R-Hazelhurst), a leader in John Doe law reform, said he's "very anxious" to see how the Department of Justice handles its investigation.

"It appears Kevin Kennedy may have broken the law at the conference," he said. "It does no good for us to pass new laws if the current laws are not enforced."

Craig agreed.

"The Legislature has a constitutional role to make sure the agents of the government operate responsibly and in compliance with the law. It's on us to make sure that happens," he said. "It's also on the Attorney General's office, the district attorneys offices and others charged in the executive branch to make sure that justice is administered."

"It's not one or the other. In this situation we had law enforcement and DAs involved (in abusing the law). That's why I think that it all the more calls for the Legislature to have a more in-depth investigation."

MacIver News Service | Aug. 2, 2017

By M.D. Kittle

[Madison, Wis...] Much, understandably, has been made of Wisconsin's massive incentives package proposal to land the almost unfathomably massive Foxconn Technology Group manufacturing plant.

While $3 billion in tax credits and other sweeteners certainly grabbed the attention of Foxconn brass, people, not incentives, ultimately make economic development deals, Wisconsin Department of Administration Secretary Scott Neitzel says.

And Neitzel, who has had a front-row seat to a "once-in-a-century" development project, asserts one Wisconsinite in particular sealed the Foxconn deal - or at least the memorandum of understanding.

"The key to what made this successful was the personal connection made between Gov. Scott Walker and (Foxconn chairman) Terry Gou," Neitzel said during an interview Wednesday with MacIver News Service.

"Terry was very impressed with the governor's work ethic. What he saw and recognized in the governor was what is represented in the Wisconsin work ethic, that heritage of people who know how to get up and work and take responsibility for their work," Neitzel added.

The Administration secretary joined Walker and a small group of Wisconsin business and development leaders on a break-neck trip to Osaka, Japan, in early June. They traveled at the invitation of Gou, who had been dealing with at least seven different states, Wisconsin included, on a potential site for Foxconn's first U.S. manufacturing facility.

Tricia Braun, deputy secretary of the Wisconsin Economic Development Corp., told the Milwaukee Journal Sentinel that Walker and Gou formed a fast bond.

"We felt like just right here alone that relationship was incredibly valuable to Wisconsin," Braun said. "And so I think that was a key. It put us over the top, I think."

Neitzel said the fact that Walker was willing to make the whirlwind trip to Japan - over a weekend, on such short notice - sent a message to Foxconn officials.

"I think the governor represented Wisconsin, really, really well, and that was very much a component of their decision," he said.

Wisconsin home-grown talent and its institutions of higher education also helped shape Foxconn's decision. Neitzel said Gou saw the potential of tapping into Wisconsin's "talent pipeline" of state and private universities, tech schools, training programs, apprenticeships, a "scalable pipeline" of human resources.

The Foxconn incentives bill, which has its first public hearing Thursday afternoon at the Capitol, includes provisions that have made environmentalists and regulators jumpy. The project would be exempt from certain permitting requirements, including those governing wetlands. But developers would have to add two acres of wetland to Wisconsin's ecosystem for every acre disrupted.

Neitzel said Foxconn officials appreciated what they saw as a "seamless face on state government," with a streamlined regulatory process and agencies working together to resolve problems.

As to the $3 billion in tax credits and other development benefits, Neitzel said the state's ability to come to the table with a workable financial package was key. While admittedly borrowing the term, the secrectary called the proposal a "pay-as-you-grow" incentives package.

The deal, as written, would include $1.5 billion in tax credits, in return for creating 13,000 jobs. Payroll tax credits would be distributed on full-time jobs paying between $30,000 and $100,000 per year. Another $1.35 billion in tax credits would help ease the company's capital costs. And $150 million in sales and use tax credits could be drawn on purchases of building materials, supplies and equipment used in the construction of the planned 20 million-square-foot LCD panel screen manufacturing campus. Neitzel said the plan is to build 12 to 15 buildings encompassing this small city of production.

At a press conference Tuesday, Speaker Robin Vos (R-Rochester) said the deal is structured on performance.

"Let's remember, not a single dollar is paid out until one of two things occurs," Vos said. "No. 1, a shovel is in the ground...They won't get a single dollar until they've actually spent money on construction."

And Foxconn can tap into the payroll tax credits only if it's paying people to work at the plant, jobs expected to pay on average north of $54,000 a year.

"What our objective was in this was to get a good deal, not to get a deal," Neitzel said.

Good deals come with good partners, economic development officials say.

Foxconn doesn't simply want to build a factory in Wisconsin, Neitzel said. The idea, the plan, is to create a "high tech manufacturing ecosystem."

That ecosystem is anticipated to include a host of suppliers serving the variegated component part needs of Taiwan-based Foxconn - and the thousands of ancillary jobs that would come with them.

Foxconn already has inked partnership agreements with Rockwell Automation in its quest to establish production in the United States. And the company recently signed a letter of intent with the Wisconsin Ginseng Board, a deal expected to open up more markets in the Asian-Pacific region for Badger State ginseng growers.

Neitzel said this transformational economic development project will go a long way in stopping Wisconsin's "brain drain," the exodus of college grads for opportunities elsewhere.

"When you are talking about Foxconn and about 150 suppliers, there's no reason why a graduate from an institution in Wisconsin, whether it's a tech school or a college with an advanced degree, shouldn't have opportunities to stay in Wisconsin," the secretary said.

"Think about the next 50, 75, 100 years, that's a great legacy to leave our state: Wisconsin students stay in Wisconsin."

MacIver News Service | August 2, 2017

By Chris Rochester

[Madison, Wis...] Obamacare premium increases will likely continue their rapid upward trajectory in 2018, according to new numbers from healthcare.gov.

Premiums for health insurance plans on Wisconsin's Obamacare exchange could increase by 12 percent in 2018. Preliminary rate increase requests by Wisconsin insurance companies were posted Monday to the federal website.

Of the 90 Obamacare-compliant health insurance plans that reported rate changes to healthcare.gov, the average increase was 12 percent. Rate changes range from a modest 6.15 percent decrease to a staggering 46.25 percent increase.

The 12 percent figure is likely to change as insurers finalize their rate requests for 2018. The state Office of the Commissioner of Insurance then has to approve or deny the requests. Last year, preliminary figures showed a potential 10 percent increase, but the final figure was considerably higher at 16 percent.

Insurers are also awaiting a decision from President Donald Trump on whether to continue federal reinsurance payments to insurance companies, which partially offset the massive losses many insurers sustain by offering Obamacare plans.

The increases shouldn't come as a surprise considering the declining health of the individual market. Between 2014 and 2016, the number of insurers offering plans on Wisconsin's individual insurance market dropped from 54 to 41 - a 24 percent decline, according to OCI data.

Major health insurance companies have also dropped out of the Obamacare market en masse, including four of the five largest insurers in the country. Aetna and Anthem Blue Cross/Blue Shield announced earlier this year they would join Humana and UnitedHealth in withdrawing from Obamacare's exchanges throughout the country.

Health Tradition Health Plan, an offering of Mayo Health System of La Crosse, also announced in early July it would not be offering Obamacare plans starting with 2018.

For 2018, insurers requested a premium increase for 83 plans effective on or after Jan. 1, 2018, while they requested a modest decrease for just seven plans.

A total of 17 plans requested increases of more than 20 percent, and four requested increases north of 40 percent. Molina Healthcare of Wisconsin requested the steepest increase for its individual HMO, a hike of 46.25 percent over 2017 rates.

Molina also requested a 40.76 percent premium increase for another of its individual plans, and Compcare Health and Network Health Plan also requested increases of more than 40 percent.

The proposed 2018 double-digit price increases come on top of a 16 percent premium increase last year and a family deductible of more than $7,000 for a mid-level silver plan.

Wisconsin's troubled Common Ground Obamacare co-op, a taxpayer-supported nonprofit insurer established as an alternative to for-profit insurance companies, requested increases of 20.32 percent and 17.99 percent for its plans in 2018, considerably higher than last year's 12.2 percent preliminary request.

Rate changes must be approved by state insurance commissioners. At the time of our search, only requested rate increases were available, while none had yet been approved, denied, or finalized.

Trump is expected to make an announcement Tuesday about the future of the Obamacare reinsurance payments - which, OCI officials say, could have a significant impact on the rate increases Wisconsinites will eventually absorb next year.