Special, targeted tax breaks fail to create jobs in Wisconsin

See Wisconsin Group Negotiated Tax Credits for Jobs That Didn’t Arrive: Economic development group that helped bring Foxconn to Wisconsin awarded incentives to companies that ultimately didn’t create jobs they had promised by Shayndi Raice of The WSJ. Excerpts:

"The Wisconsin group that negotiated $3 billion in tax incentives for Foxconn Technology Group has problematic oversight practices, a state audit has found, raising fresh concerns about the costly incentives states use to attract economic growth.

The Wisconsin Economic Development Corp., a quasi-public entity, awarded state tax credits to companies that ultimately didn’t create the number of jobs they had promised, the independent Wisconsin Legislative Audit Bureau found in a report released last month. It also paid companies using state tax dollars for jobs created outside of Wisconsin, the report said. The audit found that only 35% of the jobs promised by companies from 2011 until 2018 were actually created, based on data from awards that had ended.

The findings also raise questions about the WEDC’s ability to monitor the tax-incentive contract it negotiated with Foxconn—a major supplier to Apple Inc.—on behalf of the state. In a controversial deal struck in 2017, the state promised billions in economic incentives as part of a plan by the Taiwanese electronics-maker to build a $10 billion liquid-crystal-display plant that would employ as many as 13,000 people."

"the audit found that WEDC paid $462,000 in tax credits to Walgreens Boots Alliance , even though the company had a total loss of 17 jobs instead of creating jobs. WEDC didn’t revoke the credits and recoup the money"

"Foxconn promised to create 13,000 jobs in Wisconsin for $3 billion in state tax incentives over 15 years"

"In January, Foxconn told Wisconsin officials that it didn’t create enough jobs in 2018 to qualify for credits under the terms of the contract."

"Critics of economic-incentive deals question whether they are worth the cost and some research suggests many companies promised incentives would have created jobs even without state funds.

“The ineffectiveness of these programs and the lack of monitoring is an open secret in economic development,” said Nathan M. Jensen, a professor at the University of Texas at Austin, who studies economic incentives."

"the audit also cites the WEDC for improperly verifying job creation data, meaning it may have incorrectly paid out funds at times."