— WEDC is hammering out the final details of a new incentive package that MolsonCoors says will bring “hundreds” of jobs to Milwaukee as part of the company’s national reorganization.
Still, neither WEDC CEO Missy Hughes nor MolsonCoors CEO Gavin Hattersley provided many details of the package or the number of jobs that will move to Milwaukee as they heralded the company’s decision to move positions to the state’s largest city.
Hughes, who was announced as WEDC CEO Sept. 5, said yesterday she’d been on the job about 72 hours when MolsonCoors first contacted the agency about working on an incentive package. It came together quickly as the company announced plans Oct. 30 for a national reorganization.
Hughes said negotiations were ongoing as the company’s plans solidified, and the incentives will require the creation of a new enterprise zone that would have to be approved by the Legislature’s Joint Finance Committee.
Meanwhile, Milwaukee Mayor Tom Barrett said he’s proposing a city package worth up to $2 million in incentives contingent upon adding workers at the brewery and keeping current jobs.
The mayor said the deal, which would have to be approved by the Common Council, also includes requirements for MolsonCoors as it hires employees to work on the project, including renovations to existing facilities to house new employees.
“We want to ensure that the people who live in this community and sometimes literally in this neighborhood are helping to build the future of this city,” Barrett said.
— The incentive package offered to Foxconn by the state will likely “discourage more economic activity than will be encouraged by the subsidies themselves,” according to a new George Mason University study.
The study, conducted by economics researchers Matthew Mitchell, Michael Farren, Jeremy Horpedahl and Olivia Gonzalez at GMU’s Mercatus Center, found that previous estimates of the economic impact of the state’s $3.6 billion “pay-as-you-grow” deal signed by former Gov. Scott Walker did not factor in a number of potential costs.
The study said the oft-cited $39 billion figure from a UW Center for Research on the Wisconsin Economy estimate — based on a 15-year run — was “not, in theory, wrong.” But the GMU research said it failed to take the cost of the subsidy package into account. This rendered the $39 billion figure a gross, not net, tally.
“The widely reported figures tell only one side of the story: they estimate the gross increase in GDP owing to the subsidy, but they ignore the gross decrease in GDP associated with the taxes that pay for the subsidy,” the study says.
The Mercatus Center study factored on the opportunity costs of the $3.6 billion that had to be removed from the state’s economy to pay for the package — such as lowering sales, personal income, corporate and fuel taxes and contributing towards “a genuine public good such as public safety.”
The study also highlighted that the CROWE study assumed “with 100 percent certainty” that Foxconn would not have located operations in Wisconsin without the subsidy package — an assumption the Mercatus Center study said is statistically incorrect.
“In most cases, the odds are high (between 75 percent and 98 percent) that the subsidized company would have chosen to locate in the subsidizing locale even without the incentives,” the study said. “If that is the case, the odds are also high that subsidizing governments are wasting their money.”
Combining those two factors into a research model, the study found the Gen 6 plant Foxconn announced it would pivot to will result in the subsidy directly contributing to a net economic loss of between $737 million and $10.4 billion in eight of the 12 scenarios forecasted.
What’s more, the study regarded two of the four scenarios in which the subsidies resulted in a net economic gain as “unrealistic” while the three most likely scenarios resulted in multi-billion dollar net losses.
“In short, the net effect of targeted economic development subsidies is likely to be negative,” the study said.
Spokesmen for Gov. Tony Evers, GOP legislative leaders, the Wisconsin Economic Development Corporation and Foxconn were not immediately available for comment.
See the Mercatus Center study:
See the CROWE study:
— Foxconn has announced De Pere-based DeLeers Construction and a Minnesota’s ISG have been contracted for work on the company’s planned Green Bay location.
A report from BizTimes Milwaukee shows the companies will be developing the second floor of downtown Green Bay’s WaterMark building. Foxconn purchased the space last year as part of a $9.25 million deal.
See more in Foxconn Reports below.
— Health plan selections during this year’s open enrollment period are down 20 percent from the same point in 2018, continuing a trend of lagging early signups on Healthcare.gov.
A release from the Centers for Medicare and Medicaid Services shows 39,931 plans were selected in Wisconsin between Nov. 1-16, compared to 49,733 in the first three weeks of November 2018. In the year before that, 64,974 people in the state had selected plans by this point.
On the national level, plan selections so far are also down from last year — about 1.6 million, compared to 1.9 million. Still, the number of new customers nationally isn’t much lower at 431,574, compared to 456,907 last year.
CMS notes the final number of plan selections could change as choices are switched or cancelled. Also, signups tend to ramp up near the end of open enrollment, Dec. 15.
The release shows national call center volume is down from 1.5 million calls to 1.3 million, and the number of Spanish-speaking representatives has decreased from over 100,000 to just over 86,000.
Under the Trump administration, funding has been cut by more than 80 percent for navigator programs, which help consumers find options for health care coverage on Healthcare.gov. National navigator funding for this year’s open enrollment period is unchanged from last year at $10 million.
Enrollment totals are measured Sunday through Saturday, so cumulative totals capture sign-ups from one fewer day than last year.
See the latest enrollment snapshot: http://www.cms.gov/newsroom/fact-sheets/federal-health-insurance-exchange-weekly-enrollment-snapshot-week-3
— Gov. Tony Evers has signed a law a bill to make new funding available for rural development projects, which advocates say will open up new growth opportunities for the dairy industry.
The bipartisan legislation is based on a recommendation from the Wisconsin Dairy Task Force 2.0, launching a new pilot program at the Wisconsin Housing and Economic Development Authority.
Under the new law, $3 million in loan authority will go toward equipment and machinery, brick-and-mortar projects, marketing and other investments. The program guarantees up to 25 percent of the loan or $750,000 if that’s lower.
“At a challenging time in the dairy industry’s history, we are grateful to have lawmakers’ attention and action,” said John Umhoefer, executive director for the Wisconsin Cheesemakers Association. “In extending access to capital, they are enabling rural business owners, including cheesemakers and other dairy processors, to invest in their companies, employees, and communities.”
The legislation was authored by Sens. Howard Marklein, R-Spring Green, and Janet Bewley, D-Madison; and Reps. Gary Tauchen, R-Bonduel; and Don Vruwink, D-Milton.
See the bill text: http://docs.legis.wisconsin.gov/2019/related/proposals/sb219
— U.S. Rep. Gwen Moore has introduced legislation that would provide an incentive to tribal governments to invest in renewable energy, matching a similar federal tax credit program.
Since tribes aren’t subject to federal income taxes, they’re ineligible for the tax credits. The Promoting Sustainable Energy Projects for Tribal Communities Act would provide tribes with cash amounts equal to certain tax credits to offset the cost of electricity generated from renewable sources, or investments in property used for renewable energy projects.
In a release, Moore says the bill would lead to new high-paying jobs, attract large-scale investments “and most importantly, restore tribal sovereignty.”
“Additionally, the declining use of coal is having devastating economic effects on tribal communities that have relied on coal to bring economic opportunity and jobs to Indian country,” she said. “But rather than subsidize dirty energy, we need forward thinking solutions.”
See more on the legislation: http://www.congress.gov/bill/116th-congress/house-bill/5158
— A Glendale skilled nursing business called Dycora Transitional Health – Colonial Manor will be cutting 66 jobs and closing its facility, a release from the state Department of Workforce Development shows.
According to a notice sent to DWD, 37 full-time jobs will be impacted, as well as four part-time jobs and 25 “casual employees.” The company plans to start job cuts Jan. 17 and will close by March 7.
Some of the hourly workers are represented by the Service Employees International Union, the notice shows.
— The U.S. Food and Drug Administration has granted Breakthrough Therapy Designation for Fitchburg-based Usona Institute‘s psilocybin treatment for major depressive disorder.
According to a release, the designation bolsters Usona’s mission to advance psilocybin as a treatment option. Psilocybin is a hallucinogenic compound that can be derived from mushrooms with psychedelic effects.
“The results from previous studies clearly demonstrate the remarkable potential for psilocybin as a treatment in MDD patients, which Usona is now seeking to confirm in its own clinical trials,” Usona Director of Clinical and Translational Research Charles Raison said in a statement.
Usona also announced the launch of its Phase 2 clinical trial, which will include approximately 80 participants at seven study sites around the country.
Promega CEO Bill Linton co-founded Usona Institute, which is dedicated to supporting and conducting pre-clinical and clinical research to further the understanding of the therapeutic effects of psilocybin and other similar medicines.
See more at Madison Startups: http://www.madisonstartups.com/usona-earns-fda-designation/
# Older and with fewer services, rural Wisconsin wrestles with dementia
# Cult brands: How companies build a fanatical fan base
# Milwaukee proposes tax incremental financing of up to $2 million for Molson Coors
# MillerCoors jobs could be in Milwaukee by June, but exact number still unclear
– Holterman appointed to U.S. Cattlemen’s Beef Board
– Wangard begins construction of Mount Pleasant apartments
– UW-River Falls students earn top placings at soils conference
– Pre-Thanksgiving storm could dump up to 12 inches of snow across Northern Wisconsin
– Chronic wasting disease spreads in northwestern Wisconsin
# FOXCONN REPORTS
– Study On Foxconn Deal Shows Government Subsidies Don’t Work
– Foxconn names design, construction firms for Green Bay project
# HEALTH CARE
– Bird’s eye view: Milwaukee Regional Medical Center
– SARA Investment acquires Wauwatosa office building for $3.9 million
– Lasry, LaConte, Barrett and Moore named Executives of the Year for 2019 for landing DNC
# REAL ESTATE
– Real Estate Spotlight: Milwaukee suburbs seeing changes, challenges
– Sara Investment buys Wauwatosa office building, seeks more tenants
– Northern state forests to allow public to harvest Christmas Trees
– Evers signs bill defining autocycles, setting fees
– Bucks Pro Shop pop-up store returns to Bayshore for holiday season
– AT&T bringing 5G to Milwaukee, other cities, in first half of 2020
– Performance of Elite will be key to relaunch of Midwest Express
– Bill Berry: Jens Jensen earns overdue recognition for conservation work
# PRESS RELEASES
<i>See these and other press releases: