Here & Now

Here & Now for Aug. 18, 2017

Robin Vos:

Once in a while I think it’s worth it for us to take that kind of big leap to do something to get Wisconsin on the front page of every single paper in the country and around the world as a place to open up your business.

Frederica Freyberg:

Assembly Speaker Robin Vos predicting big things for the future of Wisconsin and Foxconn. I’m Frederica Freyberg. Tonight on “Here and Now,” a first look at the Assembly’s version of the Foxconn bill as it heads to the Joint Finance Committee next week. Committee members from both parties are here. Then in our closer look, a new study on the time line for taxpayers to break even on the Foxconn deal. Then in our look ahead, what’s next for race relations in the aftermath of Charlottesville. It’s “Here and Now” for August 18.

Announcer:

Funding for “Here and Now” is provided, in part, by Friends of Wisconsin Public Television.

Frederica Freyberg:

In our first look tonight, the Foxconn bill clears the Assembly with two Republicans voting against the plan and three Democrats, all representatives from the area projected to land the factory voting for the bill. That includes Assembly Minority Leader Peter Barca of Kenosha. Assembly Speaker Robin Vos said the bill creates a bright future for the region and the state.

Robin Vos:

It's a field of dreams just beyond the interstate when you’re driving down I-94 between Milwaukee and Chicago. It’s a field of American dreams. It’s careers that people can buy a home and send their kids to college. And when they graduate from college, they don’t have to leave and go to another state. They can stay right here in Wisconsin.

Gordon Hintz:

If you look at the last six years, slashing taxes disproportionately for the wealthy at the expense of our schools and local communities seems to be the operating principle both this legislature’s majority and Governor Walker. And now we’ve got a governor six and a half years later with a weak economic record, crumbling transportation infrastructure and an out-migration of working-aged people and we’re proposing the largest ever subsidy to a foreign company. Sounds like a double-down on the trickle-down.

Frederica Freyberg:

Again, Kenosha Assembly Minority Leader Peter Barca along with Racine Democrat Cory Mason and Kenosha Democrat Tod Ohnstad voted in favor of the bill. The plant could be located in Racine or Kenosha County. The bill will now be taken up in the Senate where it will get a public hearing before the Joint Committee on Finance which is expected next week. Will there be changes? Will it be dropped into the budget bill? In a few minutes we’ll hear from Democratic committee member Senator Jon Erpenbach. But first, we go to Milwaukee to talk with Joint Finance Co-Chair Republican Senator Alberta Darling. Thanks very much for being here.

Alberta Darling:

Thank you for having me.

Frederica Freyberg:

So next week the Joint Finance Committee is expected to take up this Foxconn bill as we’ve just said. But as a member of the Senate, which one do you want to work from, the version passed out of the Assembly or the original?

Alberta Darling:

I think we should probably work off the one that just passed the Assembly, but we still have the option to start clean with the Senate version. But I would imagine we’d start with the Assembly because they did amend the bill.

Frederica Freyberg:

So what are you hoping to learn from the public hearing on the bill that will precede the Finance Committee vote?

Alberta Darling:

I think that we are going to hear from people who actually live in the area who can most directly benefit from this $10 billion investment by Foxconn what they really think about it. From my point of view, it represents a landmark opportunity for Wisconsin to be put on the map as a tech manufacturing state. We were chosen over several states that were also very competitive. But because of all of the reforms we did and because we’ve gone from 41st to the top ten in terms of business climates we were chosen because we’ve gone through a lot of blood, sweat and tears to get our house in order in Wisconsin and to become a business-friendly state and a business-friendly environment.

Frederica Freyberg:

Still, what issues or concerns, if any, might you have in connection with the bill?

Alberta Darling:

Well, the biggest concern is we have to make sure that it’s going to be a good deal for our taxpayers. And in my opinion it is because there are two parts of this bill. One is a capital investment. It’s a $3 billion investment over all. Half of it probably goes to capital projects and half goes to jobs. But the important part of this is, it’s performance-driven. Nothing will be handed out. No money will be transferred unless there are jobs created. For the capital you could say, well, that isn’t directly tied to jobs. But it is because it’s the building of the facility which will take a lot of workers, a lot of construction and will be one of the bigger construction projects in our state. It’s the size of 11 Lambeau Fields. So in my opinion there are safeguards for the taxpayer because it’s a performance-based tax credit. If they get a job that’s worth at least $30,000, they will get the tax credit. So for me it’s a tremendous opportunity. And I've been hearing from people in my district that they see it the same way. Not everybody. Of course there are people who are concerned about other issues. But let’s say what if we passed it up? We would be giving up the ability to be recognized around the country as a high-tech manufacturing state. And the ripple effects, the Greater Milwaukee Chamber of Commerce said there will be $78 billion of spin-off revenue to the state over the next 15 years. And on top of that, there will be a ripple effect as well. I’ve heard that Sharp, the technology company, is talking to other community leaders in that area to see if they can possibly come to our state. And that’s very exciting. I’ve heard that there are many Chinese companies, that kind of are groupies with Foxconn that want to be a part of the action. So we are going to get a lot of interest, a lot of jobs and a lot of economic development.

Frederica Freyberg:

So you —

Alberta Darling:

I know that people like in housing are saying how are we going to relocate a lot of these people and how are we going to have room to house a lot of the new labor that we’re going to have? And that’s going to be another boon to our economy.

Frederica Freyberg:

So just super quickly on the Foxconn deal, you don’t see that you might have any amendments in Joint Finance that would change it?

Alberta Darling:

I can’t say that right now because the Assembly put in several amendments.

Frederica Freyberg:

Right.

Alberta Darling:

I don’t anticipate that there are going to be a lot of changes, but there could be. I assume that the Democrats are going to put forward amendments. We’re very interested in working with them. I hope that our vote in Finance is a bipartisan vote. And I hope that the vote in the Senate is a bipartisan vote. I think it’s going to be very hard for Senator Wirch not to vote for this bill because of the acceptance in the Assembly in his area.

Frederica Freyberg:

Let me ask you very quickly because unfortunately we have less than a half a minute left. You’ve still got the budget out there to finish.

Alberta Darling:

Yes.

Frederica Freyberg:

Would you drop the Foxconn bill kind of into the budget and pass them together, or what’s that going to look like?

Alberta Darling:

No. We’re not going to have a separate Foxconn component to the budget. That will be a separate bill. That we have agreed to. We are looking at meeting in Finance on Thursday of this coming week to take up — start to take up the rest of the items that we have in our docket and we’ve been negotiating. And I think the biggest sticking points were what were transportation and education. So you’ll be seeing a lot of progress on all those issues and we will get the bill out by the middle of June to the third week of June to make the deadline of the 28th for Foxconn.

Frederica Freyberg:

September.

Alberta Darling:

We have to get a budget done. Yeah. We need to let the schools know what their investment can be. So we’d like to get that out by the August 28. So they’ll know what they have to deal with in their budgets.

Frederica Freyberg:

All right.

Alberta Darling:

We meet in Finance on the 28th.

Frederica Freyberg:

Senator Alberta Darling, thanks for joining us. You have a lot of work ahead.

Alberta Darling:

You bet. Thank you. We do, but it’s all good stuff.

Frederica Freyberg:

We go now to the other side of the aisle and to the state capitol to hear from a Democratic member of the Joint Finance Committee, Senator Jon Erpenbach. Thanks a lot for joining us.

Jon Erpenbach:

My pleasure.

Frederica Freyberg:

First out of the gates, I want to ask you what is your reaction to the Assembly Minority Leader voting in favor of the Foxconn bill?

Jon Erpenbach:

Representative Barca has to do what he feels he needs to do for his district that he represents which rumor has it Foxconn would be locating in that part of the state. So I understand why he did what he did. I would just hoped the bill would have been better. Would have been safer for taxpayers coming out of the Assembly. And would have been better for the environment as well. But there are those of us who have done this for a while who understand why Peter did what did he.

Frederica Freyberg:

There's some talk of Foxconn siting some location in Dane County. Do you favor it at this juncture?

Jon Erpenbach:

I don’t favor the bill at this juncture to begin with which I’m sure we’re going to get into in a little bit. But Foxconn right now could be looking up at the Fox Valley for a satellite-type of a situation or Dane County for a satellite-type of a situation. But it does sound like the bulk of what we’re talking about and what the governor is talking about would be in southeastern Wisconsin.

Frederica Freyberg:

So as to the bill, Joint Finance is expected to take it up next week. What kind of changes would you be looking for?

Jon Erpenbach:

Well, there’s two aspects to this bill. We’re giving away a lot of our taxpayers’ money here in the state of Wisconsin. We’re going to foot about 15% of their cost to build, which is about $1.5 billion. And then another $1.5 billion down the line in tax credits. So I'm concerned about that, first of all. And that’s assuming that they reach the 13,000 job goal and that’s assuming that there are no changes whatsoever in the market that they happen to be in through 2045 I believe it is until we start getting some of our money back, which really is unrealistic. And the second aspect and just as important, it’s a total environmental giveaway by the state of Wisconsin. Just the idea of no environmental impact on a project this size is staggering along with some of the other environmental issues. There needs to be better protections for taxpayers in this legislation. And there needs to be better environmental protections in this legislation. Then you also have to bring in something that I don’t know if the governor considered or not, is the Army Corps of Engineers as to whether or not they need to sign off on this. And we’re also involved in the Great Lakes Compact and whether or not that becomes an issue. And to be honest with you Fred, this reminds me a lot of Gogebic. Remember the mining legislation that passed through the legislature that the governor signed into law? Promised thousands of jobs. Governor never reached out to the Army Corps of Engineers. Never reached out to the tribe either. And as a result, that law passed but the mine was never built because of that. I fear that the governor is getting people’s hopes up and isn’t really crossing all of the T's and dotting all of the I's in other agencies that we need to work with right now.

Frederica Freyberg:

Do you think Democrats might see some of their changes in the Senate as opposed to the Assembly where 23 of their amendments were rejected?

Jon Erpenbach:

I would hope there would be changes. Everybody wants these jobs. Democrats want the jobs. Republicans want the jobs. To be honest with you, politically, the governor needs these jobs. But at the same time, you can’t have a project at this size and this scope without an environmental impact. That’s just unbelievably irresponsible. You also cannot let Foxconn basically walk away without really paying any corporate taxes whatsoever in the end because what we haven’t talked about is they would be eligible for other tax breaks outside of what the governor is giving them already. So in the end, their tax liability to the state could be absolutely zero. That’s not fair either.

Frederica Freyberg:

Meanwhile, the budget is still hanging out there and the Republican Senate Leader —

Jon Erpenbach:

Oh, yeah, the budget.

Frederica Freyberg:

— wants to finish that at the same time or very close to this Foxconn bill. How do you think it should be handled?

Jon Erpenbach:

Well, I'm not certain you can do one without the other because there’s going to be about $15 million for Foxconn in this budget that hasn’t passed yet. Obviously the budget is moving forward. There’s going to be checks written for a couple hundred million dollars in each year moving forward. So we need to look at that in the future. But in the meantime, school districts right now are trying to figure out how much money they’re going to have. When it comes to staffing levels in our correctional institutions, which are desperately needed, they don’t know what they’re looking at. Obviously the transportation builders are wondering what the hell’s going on. They don’t want to put projects on hold. If they put them on hold because we haven’t passed the budget, that’s going to cost taxpayers more money down the line. So ideally we’d get the budget done and then we would deal with Foxconn because there’s no rush on Foxconn. We need to be slow. We need to be deliberate. We need to make sure we get this right. Because if we don’t get this right, taxpayers are on the hook for a tremendous amount of money and there’s no turning back.

Frederica Freyberg:

All right. Senator Jon Erpenbach, thanks very much for joining us.

Jon Erpenbach:

All right. Thanks.

Frederica Freyberg:

And now for a closer look at the price tag that could come with the Foxconn deal. A study released Thursday by the Wisconsin Budget Project shows it’s possible Wisconsin may never break even on the deal. Jon Peacock is the lead researcher with the project and joins us to explain. Thanks for being here.

Jon Peacock:

Thanks for having me on.

Frederica Freyberg:

So the best case scenario for the Foxconn deal according to reports is that it breaks even in 25 years. What is the worst case?

Jon Peacock:

Well, the worst case scenario is it doesn’t break even ever because Foxconn could conceivably leave the state within 10 or 20 years after getting tax credits or really cash payments from the state of about $200 million a year for 10 or 20 years. And the possibility of their leaving in that period of time is very real for a manufacturer of technology devices like this that could be obsolete five, ten years from now.

Frederica Freyberg:

So are people talking about that?

Jon Peacock:

I think that certainly came up in the debate, but I don’t think it’s gotten as much attention as it should. Both with respect to the risk for state taxpayers and the local taxpayers who will have to incur huge infrastructure spending costs.

Frederica Freyberg:

Another thing, you looked at this from kind of many different angles. You have the best case. You have the worst case. And then you have kind of these cases in between. What other numbers did you run?

Jon Peacock:

We looked at a couple less rosy scenarios where Foxconn — in one scenario we analyzed that they would hire 6500 jobs, which I think would be a boon to that area. And that there would be ancillary employment or indirect employment of 16,500, so a total of 23,000 new jobs. And then a second scenario where there would be 3,000, which is at the bottom end of the range the governor’s been talking about and 11,000 new jobs, indirect jobs.

Frederica Freyberg:

There's also this matter of automation or robotics that I understand from experts Foxconn is really kind of all about. How would that affect tax revenue and this break-even point?

Jon Peacock:

We were essentially assuming in our two scenarios quite a bit of automation or use of robotics. In the sort of basic best case scenario and the other two that we looked at, we assumed that they would spend at least $9 billion on capital investments and qualify for the maximum credits on that side. But we just varied the number of people that they employed. So we were assuming higher degrees of automation.

Frederica Freyberg:

So that’s where those kinds of scenarios came from, from 13,000 to 6500 to 3,000. But as you said, in the near term, Foxconn is going to build this $10 billion plant in whatever location it decides to site in. And that results in this 16,000 construction or related jobs and nearly $200 million in state taxes then. So regardless of the numbers created, at least there’s that constant, right?

Jon Peacock:

Well, not necessarily, no. We did assume in each of our scenarios, we said we’ll give you that. Let’s just assume that. But actually we did that for the sake of simplifying things and focusing just on the changes in the employment. But a key thing to understand is that the way this deal is structured, there are two credits. One where they get 17% of their payroll reimbursed by the state and the other where they get 15% of their capital investment. And kind of the more negative scenarios for state taxpayers are that they qualify for the maximum on the capital side by going heavily into robotics and don’t have so many employees, in which case the state’s subsidy per new employee could be upwards of $570,000 a year.

Frederica Freyberg:

Which is obviously huge. And then there’s the matter of will these employees actually all be from Wisconsin, because it’s right there on the border.

Jon Peacock:

Sure.

Frederica Freyberg:

And so what implication does that have?

Jon Peacock:

Well, there’s been a lot of confusion about that. And I'm assuming many of them will be in Illinois. But the Secretary of the Department of Revenue says we’ll be able to collect income tax revenue for Illinois residents who are commuting into Wisconsin. So we assumed he is right when we did the modeling. On the other hand, especially for the more automated scenarios, most of the new jobs are going to be with suppliers. And many of them will be in Illinois. And those workers at those supply companies, their income will be taxed in Illinois. And so we assumed pretty conservatively that 5% to 10% of the new tax revenue would end up in Illinois tax coffers, not Wisconsin's. And that lengthens the payback period.

Frederica Freyberg:

Well, thank you for looking at the details. Jon Peacock.

Jon Peacock:

Thanks for having me.

Frederica Freyberg:

The debate over jobs in Wisconsin has taken place this week against a backdrop of racial unrest across the country. Specifically in Charlottesville at protests over confederate monuments, where neo-Nazi and other white supremacists groups caused violence resulting in the death of three people. President Trump’s “both sides to blame” response sparked national concern and sent many in his own party reeling in disbelief. In cities across the country, monuments came down, including in a Madison cemetery by order of Mayor Paul Soglin. Where can the American conversation on race go from here? For that we turn to someone who facilitates community conversations on race relations full-time. Tracey Robertson is the executive director of Fit Oshkosh. She’s in Green Bay tonight. Tracey, thanks very much for being here.

Tracey Robertson:

Thank you so much for having me again.

Frederica Freyberg:

First I want to ask you what this past week has been like for you?

Tracey Robertson:

You know, that’s a great question. And when I think about — in reflection about what this week has meant to me, it’s been a week like every other week I've had in America as a black person, black-identified person in this country. This is a typical week. Really emboldened racialized behavior is not unique to me.

Frederica Freyberg:

What's your reaction to President Trump’s remarks?

Tracey Robertson:

You know, I fully expect President Trump to be exactly who he told us he was going to be. He’s been very clear about who his political agenda is supposed to advantage and that certainly was not people of color, people who identify as Muslim, people who identify as LGBTQ. So I'm not as disappointed in him as I am in the people who voted for him.

Frederica Freyberg:

Have you be heartened or not by other people’s reaction to President Trump?

Tracey Robertson:

It's been very day-dependent. We had a vigil in Oshkosh for the victims at Charlottesville. And while we were there someone drove past and used the “n” word. And people at the vigil ran up and said how do you feel about that? I said, you know, I'm not surprised. You’re surprised. I’m not surprised. A lot of the engagement that I have on a day-to-day basis is people certainly inferring that I'm the “n” word, if not out rightly calling me that. Again, it’s just part of everyday life as a person of color in this country.

Frederica Freyberg:

So this week is like all other weeks. Does it make you sad then that suddenly this gets so much attention, when this is the daily life?

Tracey Robertson:

It doesn’t make me sad. It makes me hopeful. I think it, sadly, takes these kinds of national incidents to raise awareness for people who don’t identify as people of color. It’s not news to us. But it’s news to lots of other people. And it’s sad that people have to lose their lives and we have to see so much hatred and disdain in order for some people to move. But for many people that’s exactly what it takes. So I'm hopeful that we’ll be better because of this incident.

Frederica Freyberg:

The mission statement of your organization is this, quote, to promote social transformation through color-brave conversations, education, advocacy and research in order to achieve race equity and justice within your community. What are color-brave conversations?

Tracey Robertson:

Well, historically what we’ve been taught about race is to pretend like we’re color blind. That we don’t see race. When I show up in a room, I show up fully as a black woman. So people’s opportunity to pretend like they don’t see me really is a racialized narrative. What we’re asking people to do is flip that script and really think about race in a very analytical way. Do some analysis around it. An example I love to use is about– let’s say a grandmother is in a grocery store. A grandmother who identifies as a white American, as a white person, is in a grocery store. And the grandchild says to them, oh, look, grandma, that person is really dark. What being color blind has taught us to do is pretend like we don’t see that. So that would look like, shhh, please don’t talk about that. We don’t talk about that. It’s not polite to talk about that. Although that grandmother has not said to that child, I have a problem with people of color, what they’ve said is A) we should never talk about it. B) I don’t have enough information to even engage you in a discussion. So we teach those children that talking about race is a problem. And I just like to ask do we think that worked? It hasn’t. Being color blind is what’s gotten us here today. So what we ask people to do is be really color-brave, to think about race, to consider race, to study race, to learn about race. An example of a color-brave grandmother in that same scenario would be, yep, that person really is dark. What do you think that means about that person? Where do you think that person would have come from? What do you think life in that place where they’ve come from looks like? How does that — what does that mean for us as white-identified Americans in this country? So really doing some critical analysis around race. Thinking about it from an historical perspective, recognizing that our country has not been great for people of color and really having some deep, valuable discussions around that to move us to a place of change.

Frederica Freyberg:

Why do you think there might be the reluctance or the fear on the part of people to have these color-brave conversations?

Tracey Robertson:

I think it’s like anything. I think we just haven’t had the tools. I think it requires us to be really introspective and to acknowledge that the country has really done some damage and has created some trauma for people of color in this community. And that’s really hard to face. It’s really hard — as I continue to learn myself to see some of the pain and read about some of the pain that my ancestors experienced. It’s tough work. It’s easy to pretend like these issues don’t exist. It’s easy to go about your everyday experience and pretend like you don’t recognize all the things that are happening. It’s a lot easier to pretend like it doesn’t exist.

Frederica Freyberg:

As for the removal of statutes or monuments, what’s your reaction to that?

Tracey Robertson:

That's a great question. I think what we’re seeing, people are really — an analogy I like to use is if you continue to kick your animal, at some point your animal is going to bite back, right? It’s kind of the same idea. I think people are incredibly frustrated. I think that the United States of America has not apologized for the oppression of many of the communities. I think people are incredibly frustrated. I think that holding these people up as heroes is a mistake. It’s problematic. It goes on to reinjure people who are really experiencing trauma around the issues of race. So I understand why people are angry and feel like that this — taking down the statutes is part of our journey to healing, to making our country really a racially inclusive place. We can’t do that if we have statutes of people who have been, you know, emboldened in their oppression against people of color.

Frederica Freyberg:

With really just about a half a minute left, does what has happened in the last week in your belief set us back or move us forward?

Tracey Robertson:

I think with our current political administration it’s certainly going to be a battle to move, but I think it’s certainly empowered some people to recognize that it’s important we work together to be the change that we want to see.

Frederica Freyberg:

All right. Tracey Robertson from Green Bay, from Oshkosh out of Green Bay tonight. Thank you very much.

Tracey Robertson:

Thank you.

Frederica Freyberg:

And finally tonight, a look ahead to next week, when we take you to Richland County, where we check in with locals in Richland Center, a small city halfway between Madison and La Crosse. We asked them what they think of the Foxconn deal.

Kelly Coppernoll:

I know it’s highly political. I know that there are strong opinions on both sides. But I think if something like that, maybe not as big, obviously, but something like that came to Richland Center, that would be a huge boost to us.

Frederica Freyberg:

Business owners and residents in one western county weigh in on Foxconn. That’s next week. Until then, I'm Frederica Freyberg. Have a great weekend.

Announcer:

Funding for “Here and Now” is provided in part, by Friends of Wisconsin Public Television.