Wisconsin State Journal, July 16
State Senate can’t have it both ways in budget standoff
The borrow-and-spend state Senate is making a weak argument against the fiscally conservative Assembly in the ongoing state budget debate over transportation needs.
Republicans who control the Senate say they won’t raise any kind of tax or fee to cover the expense of higher spending they are demanding for roads. Instead, their latest proposal to keep important highway projects on track is to borrow more than $700 million, according to Senate Majority Leader Scott Fitzgerald, R-Juneau.
That’s down from the Senate’s original proposal to borrow $850 million over the next two years. But it’s still excessive and irresponsible, given that 20 cents of every dollar the state raises for roads is being eaten up by debt payments. Moreover, that percentage has grown from 7 percent in 2000, and it will reach 24 percent by 2019 under Gov. Scott Walker’s original plan to borrow $500 million for roads, according to the Wisconsin Taxpayers Alliance.
If the GOP Senate’s bottom line is that the state shouldn’t bring in additional revenue for roads and other transportation needs - even though Wisconsin’s roads are the worst in the Midwest, according to a state audit, and nearly the worst in the nation - then you’d think senators would be willing to hold the line on spending.
But the GOP Senate is balking at that, too, now that Assembly Speaker Robin Vos, R-Rochester, has called the Senate’s bluff.
Which is it, GOP senators? Is the state spending too much on roads? Or does it need more money to spend?
Please make up your mind. You can’t have it both ways.
The Republican-led state Assembly understands that the state’s gas tax and vehicle registration fee haven’t been raised in a decade. And because vehicles run on less gas, motorists actually pay less in motor fuel taxes than they used to, a trend that’s only going to continue.
So a modest increase in the gas tax or registration fee - or even a fee on heavy trucks that cause the most damage to roads - is easily justified to cover the rising cost of vital construction projects.
But for political reasons, the Senate is sticking with Gov. Walker’s irresponsible position that the gas tax must remain flat - even though every other tax, including property, sales and income taxes, collect more money year after year.
Instead, Walker and the Senate want to put their higher spending for roads on the state’s credit card.
Sen. Fitzgerald said last week he’s not sure what Assembly Speaker Vos’ ultimate strategy is. But it seems clear to us: Vos and the Assembly want to pay for good roads with real money. And they’re committed to that prudent position, even if the state budget is delayed.
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The Journal Times of Racine, July 17
Good reasons for Foxconn’s interest here
There’s good reason to be excited about the prospect of Taiwanese electronics manufacturer Foxconn opening a new manufacturing facility in southeast Wisconsin, and possibly even in Racine County: While local elected officials have been quiet on the discussions, understandably out of fear of harming this area’s prospects of landing the plant, the possibility of up to 10,000 new jobs coming to Racine County cannot help but stimulate interest. As economic shots in the arm go, this would be an injection of Vitamin B-12.
We know that it’s more than just idle speculation: Outgoing Racine Mayor John Dickert confirmed that Foxconn officials met with city Water Utility General Manager Keith Haas about supply for a potential facility, and the village boards of Mount Pleasant and Caledonia met in a joint closed session last week, reportedly regarding contact by Foxconn officials.
There have been some disconcerting notes sounded in area media regarding the Foxconn prospects: The company’s decision to set up shop here would require thousands of workers - specifically, workers who can assemble iPhones, PlayStations, touch-screen tablets and other electronics, as Foxconn workers do in China. Some have speculated that there is a shortage of workers in the area qualified to do such work.
In Racine County, that shortage is merely temporary.
Four major stakeholders - the Racine Unified School District; the United Way of Racine County; Racine Area Manufacturers and Commerce; and Higher Expectations For Racine County Youth - have been working together in recent weeks, months and years to prepare all of the county’s young people to pursue and obtain family-supporting jobs upon graduating from high school.
As we know, a four-year college or university suits many high school graduates, but not all of them, and as a community we must prepare all of our high school students to be successful adults. That translates to the need for programs that prepare students who are not college-bound.
The work of the members of those four organizations has led to initiatives such as Unified’s Academies of Racine. Beginning with the 2016-17 school year, Unified freshmen are placed in groups, the Academies, which align most closely with their interests and ambitions. For students whose interests lie outside the four-year college arena, this means hands-on experience while still in high school, experience made possible through Unified’s parternship with RAMAC. The relocation of the REAL School to the former Sturtevant Sportsplex site, placing it literally down the street from Gateway Technical College’s SC Johnson iMET Center, is but one example of Unified’s engagement with the larger community to prepare all of its students for a prosperous adulthood.
For the uninitiated, the “iMET” stands for “integrated Manufacturing and Engineering Technology.” Gateway graduates who have studied at the iMET Center - prospective workers with associate degrees in disciplines such as automation systems technology - are exactly the kind of worker Foxconn would be seeking upon setting up shop in southeastern Wisconsin.
It’s no accident that Foxconn is the subject of local published reports and village-board meetings. There’s a clear reason for the company’s interest: It has found that Racine County stakeholders already are preparing students interested in heading in that direction.
Of course, we would love to see Foxconn come here. It would be a dramatic boost for the local economy.
But even if the Taiwanese manufacturing giant sets up elsewhere, Racine County is already at work preparing all of its young people for a bright future.
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The Janesville Gazette, July 16
The pitfalls of landing Foxconn
The sudden influx of 10,000 jobs in Janesville could only be a good thing, right?
Not necessarily.
News of Foxconn considering and then passing up Janesville as the site of a $10 billion expansion project might have left some people feeling disappointed. But we know from experience the pitfalls of allowing one company and industry to dominate the local economy.
The GM plant closing happened not even 10 years ago. Let’s not forget with its closing came the sucking sound of hundreds of people’s livelihoods disappearing. When a community relies on a big employer, its fortunes rise and fall with that employer, too. The car industry is notoriously cyclical, and Janesville endured many ups and downs through the years before the bottom finally fell out in 2008.
Officials are portraying Foxconn’s planned U.S. plant as a prize to be coveted. President Trump even dangled the expansion during his visit to Wisconsin last month, declaring the state could get a “very happy surprise very soon.” Michigan and other states are supposedly in the running, too. Janesville officials cooperated with Foxconn’s inquiry about options for locating in Janesville, and we cannot blame the economic development team for feeling excited about the possibility.
But if Foxconn, a maker of smartphones and other smart devices, were to open a plant here (and every sign indicates they won’t), the move would place tremendous strain on the city’s ability to ramp up services for both Foxconn and its workers. Had Foxconn picked this area for its expansion, the blessing of more jobs would have collided with the realities of Janesville’s infrastructure.
For starters, where would all these workers live? As it stands, Janesville has a shortage of quality rental housing. The housing market remained depressed for several years after the GM plant closed, but it’s now struggling to keep up with demand as the economy rebounds.
Look to North Dakota for tales of woe amid an economic expansion. The shale oil boom from 10 years ago brought wealth to the region but also a haphazard collection of temporary housing and other pains associated with overgrowth. Not that Janesville couldn’t find a way to eventually absorb Foxconn employees, but our point is that economic booms aren’t entirely positive for communities. They come with downsides.
Of course, the biggest downside with a company as large as Foxconn would be inevitable economic downturn, the moment when the company lays off hundreds of employees or even shutters the plant.
The technology industry is particularly sensitive to disruptions, and there’s no telling whether smartphones will remain as must-have devices 10 or even five years from now. Is Foxconn nimble enough to switch from its current line of devices to something else? Does it have the expertise or capability to survive the next technological disruption?
Janesville’s economy has rebounded through diversification. Janesville seems to have learned its lesson from depending on a single manufacturer, having rebalanced its economic portfolio with stakes in technology, food, distribution, medical and other sectors. If one company shutters or lays off workers, it won’t shock the entire system unless the whole economy tanks.
Whichever city lands the Foxconn plant will view itself as a winner, and Gov. Scott Walker and President Trump will surely treat that city as such. Politicians, if they talk about nothing else, tout jobs, jobs and more jobs.
Sure, we’re puckering a little, here, from sour grapes, but winning 10,000 Foxconn jobs wouldn’t be a perpetual party for the economy. It would come with a hangover.
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