>> I'm Frederica Freyberg.
Tonight on "Here and Now",
a first look at the fiscal
markup on the Foxconn deal.
A closer look at pollutants
that tech manufacturing creates.
Then, in our WisContext segment,
What impact will a Foxconn plant
have on Lake Michigan?
A look ahead to what's in store
for local government if the
state Foxconn deal is struck.
Shawn Johnson joins me for
Capitol Insight for politics of
the deal.
It's "Here and Now" for
August 11th.
>> Funding for "Here and Now" is
provided in part by Friends of
Wisconsin Public Television.
>> A first look
tonight at the Legislative
Fiscal Bureau's markup on the
Foxconn bill.
The nonpartisan bureau issued a
report about the long-term costs
of the state's $3 billion
incentive deal with Foxconn, a
special session bill that would
clear the way for the Taiwanese
manufacturer is making its way
through the Legislature.
The Fiscal Bureau report
detailed the incentive package
under which the state would pay
Foxconn up to $2.85 billion over
the next 15 years, and a
$150 million tax break on
construction materials.
It would also loosen
environmental regulations for
Foxconn.
The report finds state taxpayers
would not break even until the
year 2043 under best case
scenarios, and the Assembly
plans to vote on the special
session bill next week, and the
Senate referred the bill to the
Joint Finance Committee.
With so much talk about the
dollars and cents of the Foxconn
deal, we wondered what the
manufacturer of electronics and
LCD screens entails.
It's a far cry from rust belt
smoke stack-type industry.
Is it clean?
What by-products could result?
From there we turn to the
University of Michigan.
They pointed us to Peter
Adriaens, professor of civil
and environmental engineering.
He joins us from Ann Arbor,
and thanks so much for doing so.
>> Thanks for having me.
>> This Foxconn plant
will produce LCD screens, and
you say heavy metals are key
components of tech manufacturing
of this sort. How so?
>> Yes, so LCD screens are
liquid crystals that are encased
between two glass plates.
The liquid crystals
have organic solvents in them.
Then, back lighting is required
for a screen like that.
That has mercury in it,
and there's a power supply which
has heavy metals like cadmium,
chromium, zinc, and copper.
>> How would those
heavy metals be contained
or discarded?
>> During the manufacturing
process, the excess materials
that are not used in the
manufacturing would be stored
into waste bins or waste drums
and ultimately be processed.
>> What happens if they are
released into the soil or water
and is that a possibility?
>> That is definitely a distinct
possibility, and the waste
materials essentially are liquid
materials, and they usually get
burned down into a waste cake of
materials, so like a sludge
that has heavy metals in it.
The question is what Foxconn
plans on doing with that.
Is it going to get stored
in a storage facility?
Where are they going to take it?
Because leakage out of drums
is a fairly common occurrence.
>Are these dangerous pollutants?
>> It depends on which one you
are talking about.
The Benzene definitely has long-
term health effects including
birth defects, cancer and other
types of impacts, and heavy
metals, once they get into your
body and once they get
into the environmental ecosystem
are there to stay for
a very long time.
They are called bioaccumulative.
They accumulate in the body
and they stay pretty much for
the rest of your life.
Basically, you can't
get rid of them.
>> Can the water used
in the process be cleaned and
returned to the lake where it
will be drawn from?
>> There are definitely
processes by which you can try
to clean them in some sort of
cleanup standards where you can
clean the manufacturing waters
to the standard where they can
be discharged again, but I'm not
sure what processes are actually
in place, and the bill seems to
indicate there is no monitoring
required on the water quality.
>> Speaking of that,
there are these relaxations of
environmental rules in this
bill.
What is your overall reaction to
the relaxation of those rules in
this bill that is being ushered
through our Legislature?
>> Almost seems a little
excessive here, and I'm very
used to seeing what states do
to attract businesses--
anything from changing
zoning laws to what not.
I have never seen them relax the
environmental regulations on
the manufacturing operations.
Definitely they would be
required to do less than U.S.
operations in the same state.
>> Specific language
in the bill says our Department
of Natural Resources would not
require a permit for Foxconn to
do things including depositing
material, changing the course
of streams, and enlarging
a water body that connects
to a navigable waterway.
What does that mean to you?
>> In normal business operations
you have to seek permits, and
there's conditions around the
discharge, and it seems like
this bill is essentially
completely getting rid of
all state required legislative
permitting.
They argue the federal permits
apply, but essentially, they're
getting a free ride on all
the state permits.
It's very unusual.
>> You are saying
it's unusual, but what about
that fact that federal rules
would still apply?
Do those not protect the
citizens?
>> Federal rules definitely do
protect the citizens, but the
reason we have state specific
laws from the DNR is to adapt
the federal rules to the
location or geographic specific
conditions such as Wisconsin
having Great Lakes, the
different kinds of industries
that operate in the different
states.
So we need to adopt any kind of
rule to the local business and
industrial operations.
That's why we do need state laws
in addition to the federal laws.
>> All of this
discussion of heavy metals, and
other kinds of materials and
storage of those, should we be
concerned when you see the
language in this bill that is
going through the Legislature
and the relaxations in it?
>> I think there's definitely
cause for concern for a couple
of different reasons, and one
you look at Foxconn's record in
china, and definitely have been
major discharges both in air and
in water, and precautionary
principle would say yes, we do
need rules, and the second cause
for concern is it really opens
up and becomes a slippery slope
and opens up the opportunity of
other electronics manufacturing
industries or other industries
that even do a minor portion to
say look, there's a precedent,
and we do not need environmental
regulations, if you want to move
to the state of Wisconsin.
There's definitely cause for
concern.
>> Professor Peter
Adriaens, thank you for joining
us with your expertise.
>> Thank you very much.
>> Wherever Foxconn
locates, proximity to a vast
water source would be key.
Our partners at WisContext did
some digging on just what's
required and just what the rules
are for where the company would
most easily get the water.
We went to the shores of Lake
Michigan in Racine to talk with
journalist Scott Gordon.
Scott, how much water do expects
think this kind of manufacturing
process would take?
>> I have seen estimates
of up to 15.8 million gallons
of water per day.
Manufacturing electronics
is a pretty water-intensive
process, and the manufacturer
of LCD screens is
pretty water-intensive, too.
>> What are the specific rules
under the Great Lakes Compact
for who can take
Lake Michigan water?
>> The terms which they do that
are going to depend in large
part on location.
The line of the Great Lakes
basin sort of dictates a lot of
how that works.
If you are within this sort of
borderline of the Great Lakes
basin, then you have access to
that, and if you are in a
straddling community where part
of your city boundaries or
whatever are inside the basin
and part are out, then you can
get access to that.
If you are in a county that
straddles, but the community
itself is outside the line,
then you can ask
the Great Lakes Compact Council
for a diversion and go through
the process that the City of
Waukesha recently went through.
It all depends on location.
If they want to use Lake
Michigan water, chances are they
are going to work for a location
in the community that straddles
the Great Lakes basin where you
have access of that.
>> If you are not
fully within the Great Lakes
basin, if you are in an area
that as you say straddles that
basin dividing line, then you
can take this water and use as
much of it as you need?
>> Not necessarily as much of it
as you need.
If you create a consumptive use
of the water, meaning you can't
restore that resource back into
the basin over a certain
threshold, then that triggers
a review of what you're doing
under the Great Lakes Compact--
which isn't necessarily a
binding thing, but it certainly
invites a bit more scrutiny.
>> It triggers a
review but not necessarily a
vote of all the Great Lakes
governors as did the Waukesha
water diversion.
>> Exactly.
>> Under the special
session bill that's going
through the Legislature right
now, written into that
legislation is a streamlining of
environmental protections at the
very least; Is that right?
>> Yes, to say the least.
The plan in any case would have
to comply with federal
environments, regulations and
state environmental regulations
technically.
They are waiving requirements
for wetlands and other things,
and waiving the requirement for
Foxconn to submit an
environmental impact statement
before beginning construction
which has people have said is
one of the main tools that the
state uses to kind of get ahead
of environmental problems at a
given project site.
The Great Lakes Compact gives
states discretion as to how they
implement the compact within
their borders, and the special
session bill is essentially
streamlining that as well.
>> Is there ever any
danger of sucking too much water
out of Lake Michigan?
>> That's kind of a hard
question to answer.
People are supposed to be
putting back to a large extent
the water they are using from
the Great Lakes basin, but they
are permitted a bit of
consumptive use so it's not like
they're replenishing every
single drop, and the natural
recharge of the Lakes is about
1% of their volume per year.
That's why people have the
agreements in place to sustain
that resource, and there is
some concern that more and more
companies will be attracted to
the Midwest by the resource,
especially as they look around
the world and see parts of the
world and parts of the United
States that are really
struggling with
the sustainability of the water
resources, and the analyst who
gave that 15.8 million-gallon
estimate also said that he
anticipates more electronics
manufacturers will be drawn to
this region in part because of
this.
>> It's a very good
thing for economic development
but a very fragile thing given
the resource that is here on
just off the shore.
>> Right.
It's interesting because a lot
of the agreements and
regulations that people have
around the Great Lakes like the
Great Lakes compact were kind of
born in part out of this fear
that outsiders would come into
the region and, you know, divert
these resources, and there was a
great outrage in the late '90s
about a company in Canada that
wanted to take millions of
gallons of Great Lakes water and
ship it to Asia, and now we have
possibly a lot more interest in
foreign, or at least out of the
region, companies coming in
establishing a footprint here,
in part to take advantage
of the resources.
>> I was joined by
Scott Gordon of WisContext.
You can find his
and other in-depth reporting
by going to WisContext.Org.
Just what impact would a Foxconn
project have on local
government?
In tonight's Closer Look, we
dive into that with Todd Berry
from the Wisconsin Taxpayer's
Alliance, who has been asking
that question in recent days.
Todd, thank you very much for
being here.
>> We have a blog post on the
website on this subject.
>> I read it.
We invite you to talk about the
important stuff.
But I wanted to ask you about
the overall reaction to this
$3 billion incentive package and
specifically the part of it that
would cost more in a budgets
cycle in 2022?
>> First of all you have the
long memo that talks about this,
and when you get into it you
find out that it's all
based on assumptions that the
Fiscal Bureau accepted
from other outside parties, and
it really is questionable,
and that's not meant to be a
criticism of the Fiscal Bureau.
As far as the impact,
we get $1.5 billion,
$2 billion dollars a year--
in a biennium of new revenue.
$600 million is manageable,
but how do they manage it?
I would look back to 2014-15
when the state threw a lot of
money at technical college
property taxes,
and it was actually more money
than the Foxconn thing.
What happened?
They basically just screwed down
the entire state budget and all
the new money went there or to
Medicaid, and that's probably
what would happen.
>> Wherever Foxconn
locates it would be inside a
local Tax Incremental Finance
district.
What does that afford
the company?
>> The idea behind TIF, and it
was originally meant for
disturbed, blighted urban
areas-- and this would probably
be on farmland-- but what it
does is it says the municipality
can issue debt in order to cover
the costs of improvements like
roads and sewer and so forth,
and because of the scale of the
thing, we are talking about
roads, and we may be talking
about four-rain highways for
miles, and just the parking
lots, whatever.
It's huge.
>> The Fiscal Bureau, though,
says these public service costs,
like that of which you speak,
would not be recouped
from Foxconn because of this TIF
district but instead shifted to
other property
outside the TIF district.
>> There's a couple things going
on there.
Foxconn is going to pay property
taxes, and because the
increment, the amount of
increased property taxes will be
because of all the borrowing and
development, and Foxconn will
share in those costs and because
it will be such a large part of
the tax base of the community,
they are going to pay something.
They are not going to be exempt
from property taxes.
>> How complicated is
it for local governments to
implement a TIF district?
What concerns are they
considering the fast track
nature?
>> I think it's a great
question, and it's part of what
was on our website.
There's a certain due diligence
and process to all of this.
Local governments hire a
consultant, they have to design
the district, and there are
hearings and meetings and local
government boards have to do the
approval and so forth.
If the state is assuming they
can get it through the
Legislature in the next 30 or 60
days, no one has given much
thought how fast can local
governments do this, and besides
the normal TIF process, if this
is done in a rural town that has
limited TIF authority, you
probably will have part of the
town next to a village or city,
and so then you have all the
annexation issues, and there's
nothing like local annexation
issues to stir up the troops.
>> Does this whole
thing, bottom line, help or hurt
local governments?
>> Well, long run, if the TIF
works the way it is and Foxconn
works the way it's supposed to,
you end up with a lot more
property value to tax whatever
the TIF has done, and that
windfall will fall to not only
municipality but the schools and
the counties.
Perfect example is Epic, in the
Madison area, where TIF ended
and suddenly there's a lot of
new value to tax by the local
governments.
>> 30 years out, though,
in this one, right?
>> That's another great
question, and rhetorically the
way to answer that is suppose we
had decided to build a
manufacturing plant to make
landline phones years ago,
technology changes.
>> 30 years is a long time.
Todd Berry, thanks very much.
>> You are very welcome.
>> The special session bill
that would approve the incentive
package for Foxconn is steaming
through the Legislature.
The Assembly is scheduled to
vote on it next week.
The Senate will hear the bill
before the Joint Finance
Committee.
In tonight's Capitol Insight,
we check in with Capitol Bureau
Chief at Wisconsin Public Radio,
Shawn Johnson, on the latest.
Thanks for being here, Shawn.
>> Hey, Fred.
>> Between now and
the floor action, lawmakers are
working on amendments.
Do we know how many
and what they're about?
>> In terms of the amendments
that are being worked on by
Adam Neylon, who chairs that
committee-- the Republican
lawmaker who chairs the
committee that's hearing
the Foxconn bill.
He said there's going to be
about 7 to 10 amendments that
will get rolled into one.
He's looking for bipartisan
support on those, and those
would have language in there
about a Wisconsin first
priority, but that would not be
a mandate.
There would be language in there
so that it would make clear this
was not letting the Department
of Natural Resources do whatever
it wants to in terms of
permitting for the Foxconn plant
but the devil is always in the
details on that stuff.
There would be no benchmarks on
job creation, and I think one of
the most significant things that
we learned is that that
committee is making an effort to
make sure whatever they do with
amendments doesn't change the
memorandum of understanding that
was signed by Governor Scott
Walker and the Chairman of
Foxconn.
Essentially whatever the
Legislature does through this
committee they want to make sure
it's not big enough that it
changes that.
>> So that Terry Gou of Foxconn
does not walk away from it?
>> Right.
If they are not going to make
changes significant enough
to change that memorandum of
understanding, they're working
around the edges at that point.
>> Senate majority leader Scott
Fitzgerald late this week said
he wants the bill to go before
Joint Finance for a hearing.
He has concern about these
benchmarks of which you speak.
Take a look at what he told WPR
Capitol reporter Laurel White
earlier this week.
>> If Foxconn comes, locals
make the investments, the state
makes the investment and
the jobs aren't coming as
quickly as anticipated or
forecasted.
We would like to see some type
of protection there or assurance
that the jobs are going to
happen.
>> It looks like late
this week he will settle for the
benchmarks not being baked into
this bill.
What kind of assurances has he
gotten?
>>You at least see maybe, if not
all of his positions on Foxconn,
his tone did evolve on it
this week, and he went from
wanting those in law where it
would be an ironclad guarantee
to after he talked with
representatives from the
Wisconsin Economic Development
Corporation WEDC,
which is administering
the contract with Foxconn.
They said we could put those
guarantees in the contract, and
so you don't need to deal with
those in state law.
It wouldn't carry the strength
putting job guarantees in state
law, but Senator Fitzgerald said
they would be taken care of in
the contract with WEDC and
that would be okay with him.
>> What about the
Fiscal Bureau memo that came out
earlier in the week talking
about how the breakeven year on
the deal with Foxconn would be
2043, is that giving pause to
lawmakers on both sides?
>> He said when it came out, it
was striking stuff in there, and
to put that in more context, the
memo was saying that if Foxconn
creates 13,000 jobs, which is
the ceiling for what they said
they could create and spins off
and creates another 22,000 jobs
elsewhere, all of that tax
revenue compared to the tax
revenue the state is giving
Foxconn would balance out in
2043, 26 years from now.
Fitzgerald is the one that
talked about this so far, but
he's got some push-back from
conservative talk radio on that,
and they essentially said get
this done fast, and they are not
kind of on-board with any kind
of trepidation on that.
>> Meanwhile, Scott
Fitzgerald wants to do the
state budget at the same time as
the Foxconn bill or roughly the
same time?
What kind of a heavy lift
is that?
>> It is a heavy lift.
You have a lot of interplay
between the Foxconn bill and the
budget bill, because in the
Foxconn bill there is
$252 million in borrowing for
this i94 expansion between
Milwaukee and Chicago near where
this Foxconn plant would be
built.
By the way, a huge priority for
Senator Speaker Robin Vos, and
essentially they put part of the
transportation budget into the
Foxconn bill already, and you
know, through that lens it does
kind of make sense they deal
with them around the same time.
>> There are going to
be a lot of long nights in the
Joint Finance Committee.
>> Pretty good prediction, yes.
>> Shawn Johnson,
thanks very much.
>> You are welcome.
>> Now for a Wisconsin Look
at election news and who's who
index about people making noise
for running for governor
in 2018.
The Democratic Race
for Wisconsin governor has seen
new additions past week.
Declaring their interest to
enter the race are
Representative Dana Wachs of Eau
Claire and businesswoman
Michelle Doolan of Cross Plains.
They join Andy Gronik
and Bob Harlow, who announced
their intent to jump
into the Democratic Primary
earlier this year.
Next we have a slate of
candidates who filed paperwork
to run but have yet to declare.
These are newly-reelected State
Superintendent of Schools,
Tony Evers, former
Representative, Brett Hulsey,
political activist, Mike Mccabe,
and Senator Kathleen Vinehout.
Joining them are
two lesser-known figures,
Ramona Whittaker
and Jeffrey Rumbaugh.
Finally, there are a group of
individuals that have not
filed paperwork to run, but
whose names have been floated
as potential contenders.
Among these are Madison Mayor,
Democrat Paul Soglin, and former
Democratic State Party Chair,
Matt Flynn.
That is our program for tonight.
I'm Frederica Freyberg.
Have a great weekend.