Homepage / Technology / Audits show lax oversight by Wisconsin agency counting Foxconn jobs
Facebook slams former exec Palihapitiya, saying it 'was a very different company back then' 80% of Wall Street economists, strategists believe bitcoin is a bubble: Survey Facebook to book advertising revenue locally amid political pressure Strategist Tom Lee: Young people will drive bitcoin gains just as boomers boosted stocks in the '80s This founder started in his parents' garage—now his company does over $100 million a year Activision shares to get a boost from Overwatch, Diablo sequels, Goldman says Verizon will launch over-the-top service before year-end with NFL as key piece, analyst predicts Chamath Palihapitiya: Apple is 'no different than Louis Vuitton or any other luxury good' Passport's flagship fund to close after 'unacceptable' returns Apple's powerful new computer launches December 14 Despite a deluge of criticism, Mark Zuckerberg had a bountiful year Chamath Palihapitiya says Elon Musk is the 'most important entrepreneur of our generation' Senior Australian politician resigns over China ties scandal Forget bitcoin, one of its biggest cryptocurrency rivals is up nearly 5,800 percent this year Bitcoin futures fall on second day of trading on very low volume as interest wanes Bitcoin millionaire: Don't buy bitcoin Stocks making the biggest moves premarket: PEP, MAT, VZ, MYL & more Tech high flyers could soar 10% or more next year, investor Paul Meeks says Goldman Sachs predicts bumper returns for commodities next year Amazon is not a monopoly but there's no question why it's so dominant, tech investor Palihapitiya says Starbucks customer laptops hacked to mine cryptocurrency Fed Survey: Tax cuts and rate hikes on the way Social Capital's Palihapitiya says bitcoin is going to $1 million in the next 20 years Bitcoin bulls looking to diversify can now put money in a crypto-index fund Ex-Facebook executive Chamath Palihapitiya: Social media is creating a society that confuses 'truth and popularity' More American jobs? Broadcom deal might mean the opposite The bull case for gold as bitcoin captivates America One person reported dead after Austrian gas hub explosion Bitcoin bubble could lead to 'destructive' consequences, UBS says While you were watching bitcoin, the world’s second-largest cryptocurrency hit a big milestone French retail giant to buy mall operator Westfield in the biggest takeover of an Australian company ever Bitcoin futures launch is not taking away demand from gold, Goldman Sachs says Germany outpaces UK for commercial real estate investment, survey finds UK inflation comes in at 3.1 percent, highest since March 2012 Amazon expands its cloud presence in China as it battles the country's internet giants Robert Gates says a North Korean nuclear warhead will soon be an accepted reality European markets set to open higher as investors look ahead to Fed, ECB meetings Cryptocurrencies could be rocked by major hacks next year, expert warns Trump's 'ill-advised' move over Jerusalem has set back peace process, former secretary of defense says Four charts from Google make the argument for a growing, $50 billion e-commerce bloc Corporate deals slowed dramatically in 2017, but at least one country bucked the trend The 'alt-right' created a parallel internet. It's a holy mess Google eclipses Facebook as the top source of traffic for online publishers Cramer Remix: Acadia is the most volatile stock I’ve ever covered — and it’s worth speculating on Topgolf CEO sees 'real growth' in golf, says he's 'winning' with millennials Cramer: Auto parts stocks like O'Reilly wrongly sold off and are buys Asian markets look to follow Wall Street's strong lead, and New Zealand dollar firms Cramer tackles the question of why the market has been so positive for 2017 Electric vehicle demand is driving huge jump in number of battery factories around the world Bitcoin has aspects of a bubble, but it's OK to 'play' with it: Economist Robert Shiller Icahn wages new fight with Xerox with plans to nominate 4 to board Cisco CEO Chuck Robbins thinks he's finally found the key to growing in China Why Apple just spent up to $400 million on song-identification app Shazam Trump orders NASA to send American astronauts to the moon, Mars People are taking out mortgages to buy bitcoin, says securities regulator Here are JPMorgan’s favorite chip stock picks for the next year Ford says hybrids beat electric for self-driving cars Zuckerberg's purchase of Instagram was the perfect 'teen and millennial hedge' for Facebook Shares of retailer-turned-bitcoin-play Overstock.com rocket higher after Morgan Stanley reveals stake Amazon has sharply curtailed hiring in Seattle as it seeks second headquarters Start-up Fuzzy offers house calls for your pets for $468 a year Manufacturing CEO survey shows record high optimism on prospect of tax reform A top VC explains which technologies will change society the most in 10 years American Express is getting rid of signatures for credit card purchases Bitcoin futures up and running but trading is light Apple to buy music recognition app Shazam The smart play on bitcoin: Don't mine the gold, sell the picks and shovels Cramer: Bitcoin's futures launch is a 'very big victory' for the digital currency If Tim Cook is right about AR, Lumentum is a buy On Main Street the bigger you are, the better tax reform looks: CNBC/SurveyMonkey Ethereum creator compares crypto mania to world’s biggest art auction UBS: Cryptocurrencies like bitcoin are ‘the bubble to end all bubbles’ Google's high-end smart speaker, which rivals a Sonos, is now available Bitcoin futures launch could be bad for bitcoin’s price, tech analyst Gene Munster says Bank of America analyst predicts EA will bring back 'Star Wars' micro-transactions despite uproar European finance ministers call for US tax reform rethink Goldman upgrades ADP, says it will be 'outsized beneficiary' of GOP tax cuts iPhone X supply has improved, with most models now shipping in 2-5 days Former Facebook exec Chamath Palihapitiya says social media is ripping apart society Investors 'haven't missed the train' on bitcoin yet, but it could be a wild ride, analyst says Stocks making the biggest moves premarket: ADP, FIT, X, LKQ & more Vladimir Putin orders Russian forces to start pulling out of Syria NFL and Verizon strike a mobile deal to expand live game streaming Fueled by investor taste for liquid alternative investments, hedge fund conversions skyrocket Uber’s fight for survival in London is pushed to 2018 but another key Europe ruling is imminent Bitcoin price jumps $2,000 after Cboe futures launch Contenders emerge for the No. 2 Fed job as search narrows Investors are dumping gold to buy bitcoin, says strategist Currency expert says there's one fundamental reason behind bitcoin's runaway rally Global arms sales rise for first time since 2010 Trader who called bitcoin rally says cryptocurrency will surge above $100,000 in 2018 Chinese drone maker wants to fly people around, and it says it will turn a profit in two years European markets set to start week higher ahead of Fed, ECB meetings New Zealand's central bank just got a new governor How Chinese spies used LinkedIn to snoop on German politicians Instant noodle giant aims to boost paltry market share in China with healthy ramen Rohingya curries and Syrian sweets from refugees are making start-up a hit A Muslim country that isn’t even in the Middle East says it’s willing to send troops to Jerusalem One of the world's largest shipbuilders names a new CEO days after dire warning on losses Rubber farmers are getting slammed by low prices — but one company wants to fix that

Technology

Audits show lax oversight by Wisconsin agency counting Foxconn jobs

The Wisconsin agency tasked with holding Foxconn accountable for delivering up to 13,000 jobs in exchange for $1.5 billion in state payroll tax credits has a history of failing to verify job-creation claims and rewarding companies that fall short of quotas, according to state audits.

The deal to secure Foxconn’s proposed LCD screen plant announced late last month is one of the largest economic development agreements in U.S. history and counts President Donald Trump, who rode into office on promises of creating manufacturing jobs, as one of its proponents.

A May audit found the Wisconsin Economic Development Corporation (WEDC) did not independently verify jobs numbers claimed by recipients of tax credits and posted inaccurate jobs figures online. Earlier such reports by the non-partisan Legislative Audit Bureau identified similar shortcomings in 2013 and 2015.

The agency intends to hire more staff to help manage the Foxconn project and is “committed to providing the highest level of transparency, accountability and accuracy in all of its awards,” spokesman Mark Maley said.

The deal with Taiwan’s Foxconn, formally known as Hon Hai Precision Industry, and an unrelated announcement last week by Toyota that it would build a $1.6 billion plant in a yet-to-be-specified state placed renewed focus on tax-funded development deals.

State and local governments since 1976 have awarded at least $105 billion in tax subsidies for corporate headquarter relocations, plant expansions and other developments, according to watchdog group Good Jobs First.

Critics say the subsidies often fail to produce promised economic growth and jobs, yet oversight typically is light and states rarely claw back benefits when companies do not meet commitments.

Indeed, some of the highest-profile deals between manufacturers and U.S. states have a spotty track record of long-term job creation.

Boeing has shed nearly 16,000 jobs in Washington state since winning the largest share of a 16-year, $8.7 billion incentive package, and cut nearly 1,200 jobs in South Carolina after securing multi-million-dollar incentives there.

“States should always be skeptical of any job projections. That’s why incentives should contain provisions to limit the costs per job-year, and to claw back incentives if a company leaves,” said Tim Bartik, senior economist with the Kalamazoo, Michigan-based W.E. Upjohn Institute for Employment Research.

The WEDC, formed in 2011 as part of Republican Governor Scott Walker’s push to create jobs, helped negotiate the deal with Foxconn that offers $3 billion in total state subsidies.

The May audit also found the agency did not penalize companies even when it became aware they did not meet targets established in their contracts. It allowed one unidentified business to keep $1.4 million in tax credits after missing job-creation quotas and forgave a combined $1 million in loans to two businesses after the they missed job targets, auditors found.

“WEDC cannot be certain about the numbers of jobs created or retained as a result of its awards,” the state’s auditor, Joe Chrisman, said in his report.

Walker, who negotiated the Foxconn deal along with the WEDC, did not respond to a request for comment.

Wisconsin lawmakers this week raised questions about Foxconn’s commitment to job creation. The state’s memorandum of understanding with the company commits Foxconn to creating up to 13,000 plant jobs, meaning that number is a goal and not a minimum.

“The thing that is missing is if they don’t live up to the job creation on a short-term basis and hit the benchmarks moving out from there,” Wisconsin Senate Majority Leader Scott Fitzgerald, a Republican, told WISN-AM in Milwaukee.

Foxconn said in an emailed response to questions that its Wisconsin project is expected to create “tens of thousands” of jobs in the state but declined to say if it would commit to a specific number.

Some lawmakers expressed skepticism after the non-partisan Wisconsin Legislature Fiscal Bureau estimated it will take at least 25 years for the state to break even on its tax break even if Foxconn creates 13,000 jobs.

The payback period would grow longer if that many jobs do not materialize, the bureau found.

Under the deal with Wisconsin, Foxconn would pull in a $1.35 billion construction credit and benefit from $139 million in sales tax exemptions and $252 million in nearby highway improvements, regardless of how many it hires.

Only the projected $1.5 billion in payroll tax credits could drop based on hiring, pushing Wisconsin’s break-even point “well past” the projected 25 years, the report found.

Concern over Foxconn’s promise to create jobs is based in part on the company’s record around the globe.

In Brazil, government officials had predicted as many as 100,000 Foxconn jobs if the company expanded its plant capacity, but a new factory proposed near Sao Paolo never materialized, leaving the country with fewer than a tenth of the jobs envisioned.

Likewise, a multibillion-dollar factory in Indonesia never materialized, and Foxconn has yet to start construction on a $30 million plant promised in Harrisburg, Pennsylvania.

Source: Tech CNBC
Audits show lax oversight by Wisconsin agency counting Foxconn jobs

Comments are closed.