Nygren And Taylor Weigh In On Foxconn And Budget

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Premiere Date: 
September 8, 2017

Nygren And Taylor Weigh In On Foxconn And Budget

Passing out of the Joint Finance Committee this week are the months-overdue state budget and the Foxconn bill. To sort through it we have committee co-chair Rep. John Nygren, R-Marinette, and committee member Sen. Lena Taylor, D-Milwaukee. Nygren says the amendment to allow Foxconn legal appeals to go directly to the Supreme Court is important to avoid legal delays. Taylor calls this unfair.

Episode Transcript

Frederica Freyberg:

Moving now to other news, it's more than two months late, but Republicans finally passed the state budget out of the Joint Finance Committee this week. How to fund roads and address a billion dollar gap in the transportation fund tied the majority up in knots for months. What emerged this week didn't get to a long-term funding source but it did pass on a party line vote.

John Nygren:

We will begin with the roll.

Frederica Freyberg:

Republicans have been arguing amongst themselves over transportation spending for more than a year. With Assembly Republicans looking to raise revenue for big road projects. While Senate Republicans and Governor Scott Walker wanted to continue borrowing hundreds of millions of dollars. In the end, they agreed to $402 million in borrowing and an increase on registration fees for hybrid and electric vehicles. That will only bring in about $400 million a year. And Republicans admit they did not create a long-term fix to the funding problem. Plus, major highway projects like Interstate 94 East-West and the Zoo Interchange in Milwaukee will continue to be delayed due to lack of funds.

Alberta Darling:

I am disappointed about the I-94 East-West. I think that what we're doing maybe is a bit shortsighted. I would say it is shortsighted because we're going to have orange buckets up all over the place for years.

Frederica Freyberg:

Republicans also changed the special session bill that paves the way for Foxconn to build a manufacturing plant in southeast Wisconsin. The amendment changes the legal process. So if a circuit court judge overrules a local government decision, like to take a person's property to give to Foxconn, the company can appeal the ruling directly to the State Supreme Court. Democrats say it makes a bad bill worse.

Gordon Hintz:

We can't even finish funding our highway infrastructure for existing businesses in the state of Wisconsin. But when we need something to distract from a relatively poor economic record, certainly of this governor, we're going to give away $3 billion, up to $3 billion, change environmental standards and change legal process.

Frederica Freyberg:

The legislature's budget committee also bit into tax policy. It rejected Governor Walker's income tax cut and sales tax holiday.  But also said no to the governor's increase in the Earned Income Tax Credit for working poor people. It eliminated the Alternative Minimum Tax affecting high-income earners and cut the local property tax on business machinery. Joining us now to talk about the work, Joint Finance Committee Co-chair Republican Representative John Nygren. He joins us from Marinette. Thanks a lot for doing so.

John Nygren:

Good to be here in Marinette especially.

Frederica Freyberg:

I bet after a lot of work. First I wanted to get your reaction to Peter Barca's resignation as minority leader in the Assembly.

John Nygren:

Well, you know, Peter and I may disagree on a lot of issues. But I think he's a good man. And I think it's unfortunate. It's kind of a statement of the current status of the Democrats in the Assembly. That Peter voting for the best interests of his district with the Foxconn deal was basically made to step down based on that vote. Just disappointing.

Frederica Freyberg:

I want to get now to the budget. We enumerated the major prongs of the transportation piece of it a little bit earlier. But am I correct in understanding that the new revenue source for roads is in additional fees for hybrid and electric cars?

John Nygren:

Yes, that is the only new, additional revenue that is in this budget for transportation. It's more of a parity. We looked at the average vehicle that travels 12,000 miles in the state per year and what they pay in gas tax. And we want to make sure that everybody's paying their fair share. So that's why we established this hybrid and electric vehicle fee to give us that parity.

Frederica Freyberg:

So even having just stated that it was this sole new revenue source, do you have disappointment in that?

John Nygren:

Oh, there's no doubt that I believe we needed to go further. However, you know, we also put in a number of reforms. We are going to continue to look for waste and abuse at the DOT. So we believe that there's dollars to be saved there. But, you know, unlike some of my colleagues in maybe the other house who don't believe we have a funding problem for transportation, I actually do. Yet in politics you don't get everything you want. And this is one of those examples. At the end of the day, we're going to put a budget forward that's pretty positive for the constituents of my area and the rest of the state. And that's something we can be proud of.

Frederica Freyberg:

In the transportation budget you also voted to eliminate the prevailing wage for public projects. A Fiscal Bureau paper describes savings of that as, quote, "not statistically significant." What about that?

John Nygren:

Well, Fiscal Bureau is limited in what they can actually -- the numbers they actually can provide for us. But I think it pretty much goes without saying that if you're not establishing an artificial wage that must be paid on any state-funded project, that there's a potential for the free market to actually engage and to drive costs down. So we believe it's a reasonable step to help us save additional resources.

Frederica Freyberg:

What about construction delays that even your co-chair says she's disappointed about?

John Nygren:

Well, there shouldn't be any more additional delays other than what the governor had already had in his budget. You know, Senator Darling comes from southeast Wisconsin. I understand the concerns of southeast Wisconsin. Yet I would also say that the legislators and the leaders in southeast Wisconsin need to engage in the conversation about how we fix transportation long-term in Wisconsin. Until that happens, there's not going to be a solution to address this anytime soon.

Frederica Freyberg:

Joint Finance did a vote to study polling. Is that the nod to long-term, sustainable funding?

John Nygren:

It’s one of the opportunities. We did a study last time. This is kind of a follow-up to that. We do know with tolling we do need congressional approval to get that done. Yet from my belief, you know, it is a user fee. If you're not traveling the system, you're not paying. So rather than raising registration, which is across the board regardless of how many miles you use on our system. Tolling is an opportunity for us to charge people for their use rather than passing across the board.

Frederica Freyberg:

A long ways out, though, presumably. As for Foxconn, why do you want the Supreme Court to decide any appeals as opposed to the usual lower courts?

John Nygren:

Well, we know in today's world, you know, if you can't win at the ballot box, if you can't win at the court of public opinion, oftentimes you go to the courts to try and stop things that you may not like or you may not agree with. I think overwhelmingly, even though we don't have direct jobs coming to northeast Wisconsin from Foxconn, they're supportive. Seeing an opportunity for people to delay it in the courts, this does not avoid anybody's day in court. It just actually gets us to the resolution faster.

Frederica Freyberg:

Where’s the language for any clawbacks from the incentive package should Foxconn not meet its hiring goals?

John Nygren:

There are already clawback language in existing contracts for WEDC so that's where the opportunity would be for clawbacks. Remember, there's two different types of credits in the Foxconn deal. One is based on capital investment of up to $10 billion that Foxconn has plans to invest in southeast Wisconsin. So if there is no brick and mortar actually being built, there's no credits. On the other side, there's credits based on jobs. So if there is no jobs, there's no credit. So, you know, could Foxconn come, invest $10 billion and a few years down the road actually close up? That's relatively possible. Wouldn't necessarily make good business sense for them to do that. That's where those clawbacks that WEDC will write in the contract would come in.

Frederica Freyberg:

We need to leave it there. Representative John Nygren, thanks very much for joining us.

John Nygren:

Have a great weekend. Good to talk to you.

Frederica Freyberg:

You too. Now to the Democrats and Joint Finance Committee Member Senator Lena Taylor, who joins us from Milwaukee. Senator, thanks very much for doing so.

Lena Taylor:

It’s truly a pleasure to be with you Frederica.

Frederica Freyberg:

I know he's in the lower house, but what is your comment on Peter Barca stepping down as minority leader in the Assembly?

Lena Taylor:

You know, I always appreciate anyone who's been a leader. And I respect his desire to do that. And I hear that Gordon Hintz may be running. And I’ve had an opportunity to work with him. And he's a great guy.

Frederica Freyberg:

On to the budget. We've just spoken to Representative Nygren about Foxconn and transportation. First Democrats on the committee voted against the transportation package. Why?

Lena Taylor:

Well, first of all, there was nothing in it for public transportation. And very candidly nothing in it really to even help people to connect to -- you talked about the Foxconn deal which lacks accessibility, accountability and really opportunity for Wisconsin businesses. But transportation just really failed to come up with a long-term solution, which is what we've been waiting on all summer for them to do. So they get a big F for failure for creating an independent funding source, a long-term solution and frankly even a short-term solution. They decided to not do the Zoo Interchange, which is really where Flight for Life -- you know, a major engine in the Milwaukee and southeastern Wisconsin area.

Frederica Freyberg:

So what do your constituents think about that?

Lena Taylor:

They’re very perturbed that they would be so partisan. That they would be so disingenuous about dealing with transportation costs. This is going to cost taxpayers more gas. It's going to cost them more repairs in their cars. And it's going to cost us more money to do that work later that they've delayed for what? Three or four years. And then they put in there that you can't even take a surplus and use it if the Department of Transportation comes up with it later.

Frederica Freyberg:

Now, as for Foxconn, Joint Finance passed its package obviously of incentives and changes, including allowing lawsuits over it to bypass state appeals courts and go directly to the Supreme Court. What's your reaction to that?

Lena Taylor:

I think it's completely unfair that they've given this foreign company, this billionaire investor, an opportunity to pass not only our legal system, but also our environmental regulations that we have. It's very concerning. I also don't know if you know, but it's the largest subsidy, you know, to a company, a foreign company in particular, of any state. I mean, it's really -- $3 billion? This is over spending money for our children because they did not fill the void that they created with the largest cut in history to education.

Frederica Freyberg:

In terms of that prong of the Foxconn deal that allows it to kind of jump over the appeals courts, it does avoid the whole development being sidelined for years as these cases make their way through court, right?

Lena Taylor:

Well, very candidly, the process is the process that every other Wisconsin business and Wisconsinite needs to do. So why should this foreign company, for a deal that was done at MIU, that was done on what was equivalent to almost a napkin, a piece of paper, very small writings, why should they be able to do what you can't do and I can't do and no other company in Wisconsin can do, which is to usurp our system? I think that that's appropriate, for them to abide by the same rules that other Wisconsinites have to.

Frederica Freyberg:

What’s your expectation about whether Foxconn could be a positive economic development engine though for Milwaukee?

Lena Taylor:

I think that Foxconn, it would be a great opportunity if we could make sure that there were transportation connections. They didn't even have the ability for people in Racine to get connected to the potential site that they're talking about because there was no funding for public transportation. And they don't have those sources now. We also have issue in Milwaukee with whether or not people are going to get the training that they need. They're not doing training until years out. And they said $20 million. But one quarter of it, Gateway says we need a quarter of it ourself, in order to be able to bring theirselves up to being able to deal with capacity for the amount of need. So I’m concerned about transportation and training, not to mention access for businesses in Wisconsin or Milwaukee to even build the building.

Frederica Freyberg:

When that Foxconn bill goes to the floor of the Senate, you're voting no?

Lena Taylor:

I’m voting no as long as we're going to allow a foreign company to usurp our legal system. We're not going to put in transportation. We're not putting in training. And we have no security and accountability that Wisconsinites will get the jobs. Nor the ability to contract to do the work to build the building.

Frederica Freyberg:

All right. We need it leave it there. Senator Lena Taylor, thanks for joining us.

Lena Taylor:

Thank you for having me.

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