LAB: WEDC policy would allow Foxconn to get credits for workers outside Wisconsin

Foxconn could collect tax credits on workers who don’t live or work in Wisconsin under a written policy with the state jobs agency, a policy that violates state law and the company’s contract, a new report finds.

The report, from the nonpartisan Legislative Audit Bureau, recommends the Wisconsin Economic Development Corp. change its written procedures to ensure those program credits are only awarded for the Foxconn employees who live within the state’s boundaries.

LAB’s findings show WEDC established written policies detailing how it’ll award the program tax credits. Under those policies, which don’t have to be approved by the agency board, WEDC is allowed to award the tax credits for “any employee that does not live in Wisconsin and is designated as ‘remote’, ‘working at home’, or ‘sales” as long as those workers are paid in the electronics and information technology manufacturing zone.

But the policy goes against current law, LAB notes, as well as WEDC’s contract with Foxconn.

LAB also recommended WEDC provide its Board of Directors with a copy of the written procedures and report to the Joint Legislative Audit Committee by Jan. 31.

In WEDC’s response, CEO Mark Hogan wrote the agency is researching the LAB recommendations and “will modify its procedures, if necessary, to comply with statutes and its contract.” He also pledged WEDC will appear before JLAC and provide a copy of the policies to its board “prior to any tax credits being awarded to Foxconn.”

Audit Committee Co-chair Sen. Rob Cowles praised LAB’s “diligent work.”

“This audit has given the Legislature and WEDC the ability to identify this issue and correct it prior to any tax credits being awarded,” the Green Bay Republican said.

Wednesday’s LAB report is the first evaluation of WEDC’s process for verifying information from Foxconn tied to its eligibility for program tax credits. The bureau is required to conduct four additional annual audits under the law Walker signed off on last year to bring the company to the state.

See the audit:
http://legis.wisconsin.gov/lab/media/2798/18-18full.pdf

By Briana Reilly

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