When handouts become the norm

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Business leaders learn fast. Politicians always ready to socialize risk.

WELL, SERIOUSLY, did anyone really believe other businesses all across Wisconsin and beyond weren't watching?

The pile of public handouts for the proposed Foxconn development is placed as high as $4.5 billion over the life of the deal. It's the biggest incentive package to attract a development ever concocted. An economic analysis by the Milwaukee Journal Sentinel put the per-job cost to Wisconsin taxpayers in the $200,000 range.

If all goes according to plan and Foxconn does everything it says it will, taxpayers still won't break even for about a quarter century.

Then you have Wisconsin's growing worker shortage, coupled with Foxconn's chosen location within easy commuting distance for Chicagoland residents. It's not hard to imagine a scenario in which a large percentage of the jobs Wisconsin taxpayers are ponying up for wind up being filled by Illinoisans.

ALONG COMES THE ailing paper manufacturer Kimberly-Clark, suggesting two Wisconsin plants employing several hundred people will be shuttered unless the company gets a deal like Foxconn. In response, Gov. Scott Walker has proposed subsidizing nearly 20 percent of the company's payroll if the plants stay open and 600 people keep their jobs.

Mind you, everybody hopes working people are able to keep their existing jobs and new companies pick Wisconsin as a place to do business and create more employment opportunities.

But make no mistake. Business decision-makers learn fast. They see taxpayer dollars being doled out like party favors and quickly realize politicians can be persuaded to stick the general public with risks while the companies pad profits.

Anyone who thought the Foxconn deal wouldn't result in a handout hootenanny was painfully naive.

HERE'S THE KICKER: Economic analysts say the Wisconsin package for Foxconn may be as much as eight times higher than any previous American incentive package. Thank you, taxpayers.

Participation in the bidding wars for business development - see handout hootenanny, above - may be unavoidable. Businesses have been trained to expect taxpayers to give them money. And every state, city and town is afraid these days that failure to grease palms will cause them to be left out and left poor.

That's a dangerous game, and Wisconsin has raised the stakes for taxpayers everywhere. Developers looking to pit one state against another, and one city against others, have a new standard for the shakedown.

IT DIDN'T START this way. Modest incentives to provide cheap land or subsidized services infrastructure like streets or water extensions made sense. Today, though, the dance has moved far beyond that relatively sensible menu of options. Companies demand subsidies for basic operational functions.

At some point - we don't pretend to know exactly where that is, and acknowledge it can vary from deal to deal - there's a red line, where development incentives change from being mutually beneficial to becoming corporate welfare. Right now, political leaders turn a blind eye toward red lines.

They need to look harder.

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