>> Good evening.
I'm Zac Schultz filling in for Frederica Freyberg.
Tonight on "Here and Now", a first look at the proposed
Foxconn deal with the state.
State Assembly leaders are here.
Then a look ahead to the environmental components
within the bill.
A closer look at Foxconn's budding relationship with
the Wisconsin ginseng industry.
It's "Here and Now" for August 4th.
>> Funding for "Here and Now" is provided in part by Friends of
Wisconsin Public Television.
>> In our first look tonight, we're learning more about just
how and when Foxconn can earn their $3 billion from taxpayers
for building a manufacturing plant in southeastern Wisconsin.
>> The Assembly held a public hearing Thursday on a bill that
creates a manufacturing zone for Foxconn.
Six of Governor Walker's cabinet secretaries took questions from
lawmakers explaining how the tax credits work and what
protections are in place for workers and taxpayers.
Under this bill they won't have to pay sales tax on materials
and supplies, saving them up to $150 million.
Foxconn will receive cash pay-outs from the state for 15%
of their capital expenditures, up to $1.35 billion
over 7 years.
Foxconn is expected to start with 3,000 workers
and could employ up to 13,000.
According to testimony the entry level wages should be
$20 an hour plus benefits.
Wisconsin taxpayers will subsidize those wages.
Foxconn will receive cash pay-outs from the state equal
to 17% of payroll for every job that pays
between $30, 000 and $100,000.
That will earn Foxconn $1.5 billion over 15 years.
Scott Neitzel is the secretary of the Department of
Administration and helped negotiate the deal.
He says another 20,000 jobs will be created in the supply chain
to support Foxconn and you have to look at the big picture.
>> Here again, you have to look at it very broadly.
The potential for the positive economic impacts go well out
for years and years and years.
In the short term as these incentives pay out, yes,
there will be an effect on the state budget in the short-term.
But over the long haul, this is a net win for Wisconsin
for the long-term.
>> Republicans at the capitol have different ideas on how to
address the special session bill.
Senate Republicans want to pass the stalled state budget first
and deal with the Foxconn bill in the Joint Finance Committee.
Assembly Republicans decided to hold a public hearing
before the Assembly Jobs and Economy Committee,
which is chaired by Representative Adam Neylon
who joins us now from Milwaukee.
Thanks for being here.
>> My pleasure.
>> This bill would provide Foxconn with $3 billion in
taxpayer money and yet they only sent a statement
to be read at the hearing.
Isn't it a little concerning they weren't there to answer
questions about this proposal?
>> No, it wasn't concerning at all.
I think we covered almost every single issue
you can cover on this bill.
It was a very lively, good discussion.
I think it was a productive discussion.
I think that now that we've had that first hearing,
I would imagine at some point Foxconn will be available
and will be in Wisconsin to discuss this specific
piece of legislation.
But this is a long process.
And this is only the first step.
You know, I wouldn't make anything of it at this point.
>> There were a lot of questions about protections
for workers and taxpayers making sure
Foxconn lives up to their promises.
Do you think stronger language needs to be written
into the bill in that regard?
Are you open to amendments?
>> I'm absolutely open to amendments.
I think there are ways we can improve
this piece of legislation.
To start, I think it is actually very good legislation.
And for where we are in the process, I'm very happy.
But I think there are certain things specifically targeted
at making sure this investment best benefits
the people of Wisconsin.
Some sort of Wisconsin-first provision to make sure if all
things equal, Wisconsin vendors and Wisconsin workers are the
ones seeing these benefits flow to them.
>> Because of the Manufacturing and Ag Tax credit,
Foxconn's corporate tax rate eventually will be .
4%.
Most of the $3 billion in incentives will be straight cash
paid from the state to Foxconn.
Do you consider that corporate welfare
as others are calling it?
>> I believe that it is an incentive that's necessary
to bring one of the top manufacturers in the world into
a market that can support it.
And we can thrive.
And it's too good an opportunity to pass up.
I wouldn't label it as corporate welfare.
What I would say is that it's targeted economic development
Taking advantage of resources and our strengths as a state,
such as manufacturing, the strength of our work force,
our skilled labor force.
Taking advantage of these strengths and investing
in our future.
>> Now the conservative group Americans for Prosperity
released a statement yesterday opposing the deal,
saying they can't endorse the tax credits in this package.
Are they misguided in what they are looking at?
>> No, they've long said they don't believe in using these
types of tax credits for economic development.
That's always been their position.
I tend to disagree with them.
I think economic development should be done
in a targeted beneficial way.
And I think when you have an opportunity to bring in jobs
to Wisconsin, thousands of jobs, millions of dollars in
construction, you have to take advantage of that opportunity.
The people of Wisconsin deserve it.
When you knock on doors when you go to communities throughout
Wisconsin people want jobs.
People want economic development.
They want opportunities for them and their families.
It's up to us to seize this opportunity so we can provide
them with things like jobs, opportunity,
more skilled workers into our work force.
This is going to bring -- I heard a good line the other day
-- this is going to be a brain gain, not a brain drain.
We've been losing workers for years.
They're going to other states.
Here's an opportunity to bring workers into Wisconsin
instead of losing them on the other end.
>> The last time Wisconsin did some of these major packages it
was back with Mercury Marine around 2010 and it wasn't long
after that Harley-Davidson and some other manufacturers came
looking for some of those same incentives.
Do you imagine something like that happening again?
Are other large manufacturers either in the state or looking
to come in are going to ask for something on this scale?
>> Of course.
I believe of course people going to ask for it.
And those conversations are already taking place.
My phone's been ringing literally non-stop since the
public hearing was scheduled in the jobs and the economy.
And a lot of people are already business owners or companies in
Wisconsin that are saying yeah, this would be great
but what about this benefit for us?
Why can't we change the climate to benefit all?
And I think these are worthy discussions.
And I'm willing to participate in them moving forward to see
what more we could do to help the people of Wisconsin
that are already here and already creating jobs
and already working and providing for their families.
I think these are good discussions.
And I think we should continue to have them.
But I will point out in this legislation,
there are things like the enterprise zone
that is expanded
five more zones than WEDC can designate for different types
of benefits and incentives for growth in Wisconsin and hiring
new employees that could be provided to any company
in Wisconsin that applies through WEDC.
What we like to do is look for clusters and zones in areas
of opportunity to develop in the future.
And those aren't going to Foxconn,
but they will be going to companies in
Wisconsin to help them grow here.
>> Now, this bill calls for expedited environmental
permitting and there's no environmental impact statement.
Do you think we are going to be missing out on some of the
potential environmental dangers ahead of time before this gets
put through?
>> That's a good question.
I think that-- I want to establish first and foremost
Foxconn will still have to comply to the Clear Air act,
Clean Water Act.
They'll still have to go by all the waste removal standards.
They're not exempt from the law.
What we are doing is expediting and streamlining
the process at the beginning when you are applying
for these permits and your application.
Because quite frankly a project of this scale could be decades
before it would be approved through traditional ways.
So I think if we want to actually see Foxconn invest
in Wisconsin, this is an area we have to be flexible in.
However, I also want to point out this does not mean they are
exempt from DNR oversight.
DNR is still able to participate in the construction process.
We are still able to have oversight to make sure that
environmental protections are taking place.
So, you know, while -- we should expedite this process or it
could take decades to actually get implemented,
I think there are protections in place.
>> All right. We will have to leave it there.
Thank you for your time.
Representative Adam Neylon from Pewaukee.
>> Thank you. Thanks for the invitation.
I appreciate it.
>> From Milwaukee over to Racine,
that's where we find Democratic State Representative Cory Mason
for his take on the Foxconn proposal.
Thanks for your time today.
>> Pleasure to be here. Thanks for having me.
>> You weren't on the committee but you did attend the hearing
yesterday and testify.
Did you get all of your questions answered
about this bill?
>> I think there's a lot of questions
that are still out there.
I mean first and foremost, it's hard to overstate
the economic impact this could have for southeast Wisconsin
and Racine in particular.
So I think people are very excited
about what this could be.
The bill's going to determine what it will be.
And so I think people have some questions that are still out
there in regards to environmental protection,
in regards to the wages.
And you know, we heard a lot of talk about the number
of engineers they want to hire and brain gain
and how great that would be.
But there are a lot of discussions then about
if we're going to invest a lot in Foxconn, that's one thing,
but we should be investing in our work force too.
And giving our colleges and universities and technical
colleges the resources they need so people in this area can
actually take advantage of this great opportunity.
>> Essentially the way these credits and incentives are going
to work is Wisconsin will be subsidizing the wages for 15
years, up to 17% of wages.
Do you think we need to insure there's good wages being paid?
For example, if there's an engineer being hired,
$20 an hour probably isn't enough for them to pay off loans
and raise a family.
>> Foxconn has said they believe the average wage will be around
$53,000 a year plus benefits,
which is a great marker to start at.
They've also talked about starting salaries
being $20 an hour.
And that's great but it would be nice to know if we are going to
offer $3 billion in incentives to this company to come here
and potentially start a real economic cluster,
the wages have much stronger protections and people know
taxpayers are going to put $3 billion in.
It's not too much to ask that the people working there
would be paid a living wage.
>> We've heard the site announcement is going to come
in the next couple of weeks.
Are you confident it will be in your area?
>> If they're going to make the right decision,
it will definitely be in Racine.
That would definitely be the right decision.
But regardless of where it is in southeast Wisconsin,
there's a lot of benefit for the region.
So many jobs, so many opportunities that we need to be
poised to take advantage of it.
The other thing I will say about Racine and its work force,
people here work hard.
They want to do well.
They've been longing for the lost manufacturing jobs
of decades past.
If you give them the skills and opportunity to do this work,
they will proudly do it and succeed.
So we're really optimistic about it coming to Racine and being in
our own backyard.
>> Now besides being in the legislature,
you're also running for mayor of Racine.
Does that change how you approach this bill?
>> No, I don't think so.
What I hear from my constituents over and over again is
they want me to fight to make sure
we have good middle class jobs for Wisconsin.
That's been true to the 11 years I've been in the legislature.
I'm sure that'll be true when I'm mayor.
People also want to know you're going to do everything you can
to protect the natural resources.
That Lake Michigan's not being to be threatened.
That we're going to protect their water resources.
That's my job, whether that's as mayor or as a state legislator
is make sure that workers are protected and the environment is
protected as well.
We can do really both while taking advantage of the enormous
historic opportunity.
>> Now speaking of the environment, are you concerned
about the lack of an environmental impact statement?
That would tell us a lot about what we can expect from Foxconn.
>> Yeah, I think there's a number of questions out there
about why about the environmental exemptions were
given and why exactly they would need that.
And I think there's some big questions that will be underway
about the necessity of all the exemptions that were given.
And certainly it is my hope -- certainly at the hearing
yesterday I brought this up, and the chairman of the committee
who you interviewed previously, said he was opened to amendments
around some of this language.
It's my hope we can have some good bipartisan consensus around
tightening up that language to make sure our water is protected
and still give Wisconsin this great economic opportunity
with Foxconn.
>> We've got just a few seconds left but I want to
talk about the amount of water Foxconn will use.
Estimates range from 10 to 15 million gallons a day,
and not all of that can be treated and returned.
Is that sustainable for your area?
>> So one of the great things the Great Lakes compact did is
it basically insured that they're weren't going to be
large scale diversions outside of the basin.
But it also ensured if you wanted to do that kind of
consumptive use, you need to come near Lake Michigan to be
able do it.
I would argue that compact language is part of the reason
Foxconn is looking at the sites that it has because we have
access to Great Lakes water within the basin.
It's been a real opportunity for us.
>> Cory Mason from Racine, that's all we have time for.
Thank you. >> Thank you.
>> In tonight's look ahead, there are still
a lot of unanswered questions about the Foxconn deal,
including what it means for the environment.
Sarah Geers is staff attorney
for Midwest Environmental Advocates.
Thanks for joining us today.
>> Thanks for having me.
>> The special session bill is eliminating a lot of the up front
environmental reporting like the agency environmental impact statements.
What do we learn from an impact statement?
>> They're critically important.
They're the main tool in the Wisconsin Environmental Policy
Act that the agencies use to insure that their decisions
fulfill the mandate that the state put environmental
protection at the forefront of government decisions.
They put all of the information about potential environmental
impacts in one place for agency decision makers who may be
siloed into narrow permitting programs themselves.
And also make that information digestible for the public.
>> Is it a big loss not to have one?
>> It certainly is.
We've seen erosions to the Wisconsin Environmental Policy
Act and environmental impact statements over the years,
but we've never seen this type of exemption.
>> What do we know about Foxconn's environmental
practices overseas?
Are they able, ready and willing
to follow Wisconsin and U.S. law?
>> They've certainly stated they are
willing to follow state laws.
But I'm not sure if they have experience
complying with the environmental laws in the United States.
In their plants in China, they have had extensive environmental
pollution issues, regarding pollution of China's rivers as
well as air pollution.
And we certainly have higher environmental standards than
they've been used to in China.
>> Even though Foxconn is getting this expedited
permitting and being allowed to fill in state wetlands,
DNR says they'll still enforce Wisconsin's pollution laws.
Do you have faith in the DNR's ability and willingness
to do that?
>> I certainly have faith in the DNR staff
that we work with frequently.
They're very dedicated professionals.
But we've seen the DNR's funding and staff authority
eroded over the years.
And they are currently underfunded
and not given the authority they need to do their jobs.
So it'll be critically important for the public to watch dog the
permitting processes that haven't been touched by this
bill, which include the air quality and water quality
programs.
>> You mentioned DNR staff.
What about the political appointees that run the agency
and determine how they respond, whether they prosecute a
violation or a warning?
>> I'm glad you caught on to that distinction
because it's one that I make often.
We've certainly seen a lot of political influence
by the top levels of DNR.
We're concerned that the type of influence that lead to the
environmental exemptions in the Foxconn bill would be carried
through other environmental decisions at the DNR level.
>> Do you expect any third party testing or monitoring,
independent groups deciding we're going to put our money
and effort to make sure that they're following the law?
>> Certainly we see that all over the state.
There are citizen monitors trained by the DNR that do water
quality testing to supplement the state's program.
We also urge individuals that get drinking water
from private wells to do their own, essentially,
groundwater quality testing.
>> You described Midwest Environmental Advocates
as an environmental law firm.
Do you expect lawsuits to be filed ahead of this process?
>> There are certainly some potential constitutional issues
associated with this bill.
I can't say for certain we or another organization would bring
a challenge to the bill before we even know where the site is
going to be located.
But there's certainly that possibility.
And it's something we're looking into.
Additionally the exemptions that this bill creates have really
made a more complicated and burdensome process
for the company to follow
by making divergent federal and state programs.
And there again, it's another opportunity for litigation.
>> Now, do you have to have harm done
before you can have cause to file a suit?
Could you file a suit and a judge throws it out saying they
haven't done anything wrong yet?
How can you sue them?
>> Yeah, that's always a balance.
And so that would be one of the issues we would look at in terms
of when a challenge to the bill could be brought forward.
However once the legislature acts to take away these
environmental protections, that may have serious implications
for constitutional protections under the public trust doctrine.
>> Once a place this big, with this many employees,
is up and running, is that too late to do much to change how
they act?
>> It certainly would be difficult for example
at that point to get a court to reverse a decision
on a wetland fill permit, for example.
That would be something that likely concerned citizens
or environmental organizations would have to pursue shortly
after that permit was issued.
>> Only less than a minute left.
In your opinion, can this type of manufacturing be done
environmentally friendly or are there issues with all
manufacturing of this type?
>> I don't know enough about LCD manufacturing to say they would
all have environmental compliance problems.
I do know there are issues that this industry like others have
to contend with.
One of them is water usage.
Another is the use of heavy metals in its processing that
can cause water pollution.
And those are some of the issues we've seen in China.
Certainly just like any other industry,
they have the capacity to comply but there are certainly some
challenges and hurdles they'd have to overcome.
>> Sarah Geers, thank you for your time.
You'll keep watching it. So will we.
>> Thank you.
>> Governor Walker says the impact of Foxconn's investment
will be felt across the state.
There's already some evidence of that happening.
During last week's signing ceremony in Milwaukee,
Foxconn Chairman Terry Gou also signed a memorandum of
understanding with the state's ginseng growers and received an
honorary gift of ginseng roots.
Joining us from Wausau to talk about this relationship
is Bob Kaldunski, a grower of ginseng
and the president of the Ginseng Board of Wisconsin.
Thanks for your time today.
>> You're welcome.
>> At the event Chairman Gou said he and his family had been
using Wisconsin ginseng for decades.
Other than the personal connection,
why would a high tech company like Foxconn get involved
in the production of an ancient herbal remedy like ginseng?
>> Caught us off guard a little bit, too,
why they were interested.
Terry, as you mentioned, he's very passionate
about the Wisconsin ginseng.
I think what he wants to do--
his first wife has passed from cancer.
And he himself has put forth over half a billion dollars,
they said, just for cancer research.
He values the Wisconsin ginseng product as something pure
and wholesome and healthy.
And his goal is to market this across the country,
value added-wise.
He just feels there's value there.
And that it is a product that would fit in part of their
health and bio-science division.
>> Would this create access to new markets for Wisconsin
growers or increase prices or increase production?
>> Potentially, yes.
What they're looking at, from my understanding
with the communication that we have talking with them,
is they're looking at value-added products.
Reaching that millennial out there, that marketplace.
That consumer now, we hear quite often,
that millennial is wanting...
the Wisconsin ginseng might be a little bitter.
They want a little sweetness with it.
So maybe they're putting honey or something like that
to offset the bitterness.
And what they're looking at doing with their technologies,
making that value-added product more appealing.
And with their distribution that they have,
with their electronics, would be a natural fit for them to go
into the health market or value-added product,
convenience product.
>> A lot of Wisconsin ginseng already goes overseas
to places especially in Asia.
Do you expect that to increase or do you think there's a
growing the market in the United States as a possibility as well?
>> I expect both.
The export market will probably increase.
There's a couple things behind that.
Some of that is the China government.
Their new laws on residue levels in products.
Our product falls into in the pharmaceutical grade so that the
Chinese government or pharmaceutical companies
are looking for a product.
The other thing in this country, we'll also I believe have
the potential for the value-added product.
The convenience, as your parents, our parents,
went to the grocery store, bought chunks of cheese,
bought things in balk.
That's changing.
Now shredded cheese, sliced cheese.
Same thing with ginseng.
The market now is wanting chips.
They're wanting slices, kind of convenience things.
So yes, it definitely will increase market.
>> Just under a minute left,
do you expect to increase the size of your farm?
Have you spoken to other farmers that think this will mean
a difference for them?
>> Everybody's excited about it.
It's very rare for a company to come seek us.
We spend a lot of money, a lot of time overseas in the Asia
countries, looking and prospecting customer, companies.
And for a company to come to us and wanting to invest
in our industry is pretty special.
And will I increase?
Probably not.
As our industry is, our industry is older.
We are, like most agriculture, we are all
five to 10 years from retirement.
We hope as it does bring excitement
and it brings the younger generation into the market.
It's too early to tell yet.
We don't have the communication.
We haven't had a dialogue on where, what they want to do,
but it potentially could, yes.
>> Bob Kaldunski from Wausau, thanks for your time today.
>> Thank you very much.
>> Now for an update away from the state capitol.
The U.S. Army is backing out of its agreement to build
an estimated $20 million public drinking water system
in the town of Merrimac.
The water system was supposed to protect private well owners
from the nearby Badger Army Ammunition Plant that's leaking
chemicals into the water supply.
An Army spokesperson said providing a water system
would be inconsistent with the Army's authority
under the Defense Environmental Restoration Program.
Also this week, Foxconn is considering building
a second Wisconsin plant.
This time in Dane County.
It's not official yet but experts say it wouldn't be
surprising given that Foxconn executives have already met with
UW-Madison researchers and start-up companies
from the University Research Park.
In addition many Foxconn scientists and executives
are alumni of UW-Madison.
And finally tonight a look ahead to next week,
when together with our partners at WisContext,
we look into the potential impact of a Foxconn plant on the
Great Lakes Water Use Compact.
Reporting on that topic is posted now at WisContext.org.
And we want to say good-bye and thank you
to our student news intern Scott Behrens.
He leaves us after a brief but productive stretch of time.
Good luck, Scott.
Next week Frederica Freyberg will return.
I'm Zac Schultz.
Have a great weekend.
>>> Funding for "Here and Now" is provided in part by Friends
of Wisconsin Public Television.