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Still not enough votes for Kimberly-Clark tax break bill

November 14, 2018

MADISON, Wis. (AP) — Supporters of a $100 million incentive bill designed to keep open a Kimberly-Clark Corp. plant in northeastern Wisconsin argued Wednesday that taking no action would be devastating for the Appleton area and the entire state, though they remain short of the votes they need.

The paper products giant, which was founded nearly 150 years ago in Wisconsin and is now based in Dallas, is urging lawmakers to act to save nearly 400 jobs as it weighs closing either that Wisconsin plant or one in Arkansas.

At a public hearing before the Legislature’s budget committee Wednesday, the bill’s Republican author, state Sen. Roger Roth, admitted he still doesn’t have the votes needed to pass it, despite the GOP’s 18-15 majority. No Democratic senator has come out publicly in support of the bill, which the Assembly passed in March, and four Republicans have publicly opposed it, including one — state Sen. Luther Olsen — who expressed skepticism at the hearing.

Kimberly-Clark originally asked for resolution by the end of September but agreed to wait to make a final decision about the plant until the Legislature acts at the urging of Gov. Scott Walker and others.

Company vice president John Deitrich testified that the tax incentive bill was a “game changer” and that if it were passed, the company would keep the plant open and instead close the one in Arkansas. But Democrats and Olsen expressed skepticism.

“I am not convinced that this is the right thing for the state to do,” said Olsen, who peppered Deitrich with questions about the company’s profits and expenses that Deitrich didn’t answer.

Opponents, including a coalition of conservative groups, have cast the measure as a corporate giveaway and said the government shouldn’t be picking winners and losers. But Republican Assembly Majority Leader Jim Steineke and others said the question was whether to save the jobs and the economic impact of Kimberly-Clark on the state or lose them.

“We act and they stay or we don’t act and they go,” Steineke said.

Democratic committee members also expressed concern about its costs, the precedent it would set and the fact that they weren’t involved in developing the proposal.

The incentives are modeled after the $3 billion package passed for Foxconn Technology Group, which is building a display screen manufacturing campus in Mount Pleasant.

The nonpartisan Legislative Fiscal Bureau estimates the current bill would cost the state $109 million over 15 years, assuming jobs for 610 employees at both plants earning more than $70,000 would be retained. If only one plant were kept open, with 388 jobs, the cost to the state would be less.

The bill would extend company state tax credits for 17 percent of certain payroll costs and 15 percent of capital investment in exchange for retaining jobs. It would essentially go to Kimberly-Clark as a cash payment since its corporate income tax liability has been eliminated thanks to Wisconsin’s manufacturing and agriculture credit.

Walker backs the plan as a way to save the jobs for the Cold Spring plant in Fox Crossing that is the only one in North America that makes Depend adult incontinence products. Wisconsin Democratic Gov.-elect Tony Evers did not voice support for the bill in a statement Wednesday from his spokeswoman Britt Cudaback.

Evers supports a “long-term, industry-wide solution to the challenges facing the paper industry” like a proposal put forward by Democratic state Sen. Dave Hansen, Cudaback said.

Kimberly-Clark, which makes Kleenex tissues, Huggies diapers and other paper products, said in January that it planned to close both the Fox Crossing and smaller Neenah plant that employs about 110 people as part of the company’s plan to cut up to 5,500 jobs and close or sell 10 plants worldwide. Its North American consumer business is headquartered in Neenah, Wisconsin, where the company was founded in 1872. Wisconsin is home to about 3,000 Kimberly-Clark employees.

The Fox Crossing plant employs about 388 people but that would increase by 52 jobs and Kimberly-Clark could invest another $500 million in the facility over the next 15 years if the bill passes, Deitrich testified.

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Follow Scott Bauer on Twitter: https://twitter.com/sbauerAP

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