Democrats Running For Governor Split On $100M Kimberly-Clark Tax Incentives
Walker-Backed Proposal Would Offer 'Foxconn Style' Deal To Consumer Products Company
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Walker-Backed Proposal Would Offer 'Foxconn Style' Deal To Consumer Products Company

Democratic candidates for governor are split on a proposed $100 million tax incentives package aimed at keeping two Kimberly-Clark Corp. manufacturing facilities in Wisconsin.  

The incentives package, which is modeled after the state’s deal with Taiwanese tech giant Foxconn, resurfaced last week after Kimberly-Clark announced a successful end to negotiations with a labor union.

With the union deal in place, Kimberly-Clark notified the state it is open to discussing a state-backed tax incentives package to keep operations going at its Neenah and Fox Crossing facilities, which employ about 600 people.

Under the deal, Kimberly-Clark would be eligible for tax credits of 17 percent on employee wages and 15 percent on capital expenditures. It would also be exempt from the state sales tax on capital expenditures for five years. The Legislature’s nonpartisan budget office estimates the deal would cost up to $109.5 million over 15 years.

Gov. Scott Walker proposed the deal. Six of the eight Democrats lining up for the chance to challenge him in November’s general election say they’re opposed to the deal, either entirely or as it’s written now. One Democratic candidate has said he supports it.

Former Wisconsin Democracy Campaign director Mike McCabe, Madison Mayor Paul Soglin, and state Sen. Kathleen Vinehout oppose the deal.

McCabe called the proposal "corporate welfare" and "crony capitalism."

"It’s a mistake to try to build a sturdy economy by showering tax breaks and state subsidies on a few big corporations," McCabe said.

"It’s a mistake to try to build a sturdy economy by showering tax breaks and state subsidies on a few big corporations," McCabe said.

Soglin said he has opposed the proposal since it was announced.

"It is the same package as Foxconn. No!" Soglin said via email.

Vinehout said the package sets a bad precedent for other Wisconsin businesses.

"The state can’t pay 17 percent of payroll for every business in Wisconsin," Vinehout said.

State schools superintendent Tony Evers, former state Democratic Party chair Matt Flynn, and former state Rep. Kelda Roys say they don’t support the deal as written, but indicate they’d be open to negotiations.

"There are some huge questions that need to be answered and details that need to be shared with the public including how many workers would be retained, how are we paying for this and are there clawback provisions should Kimberly-Clark not follow through with their end of the bargain," Evers said.

Roys urged the governor and lawmakers to go back to the drawing board with negotiations.

"The legislation before the state Senate is, at best, deeply flawed," Roys said.

The package passed the state Assembly in February, but has yet to be taken up by the Senate. Majority Leader Scott Fitzgerald, R-Juneau, said he plans to meet with Senate lawmakers this week to discuss reconvening to vote on the plan.

Roys said the deal should include a long-term commitment and include protections for additional Kimberly-Clark plants in Wisconsin, aside from the Neenah and Fox Crossing facilities.  

Flynn said the state needs to ensure the proposal isn’t used to "demand further concessions from the union and further taxpayer money."

"I am not convinced that that is the case here," Flynn said via email. "If I were convinced in discussions with this company that they satisfied my conditions, I would consider providing state assistance."   

Mahlon Mitchell, president of the Professional Fire Fighters of Wisconsin, is the lone Democratic gubernatorial candidate who has come out in support of the package.

In February, Mitchell told reporters he supported the governor’s plan. He criticized Walker for not offering incentive deals to more Wisconsin-based businesses.

One candidate, political newcomer Josh Pade, didn’t return requests for comment on the package.

In addition to Democratic opposition, some conservative groups, including the Wisconsin Institute for Law and Liberty and the MacIver Institute, have opposed the deal. They argue it sets a bad precedent.

Kimberly-Clark was founded in Neenah in 1870 and produces a variety of products, including Huggies diapers and Kleenex tissues.

 

 

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