Since Republicans took control of the governor’s office and both houses of the Wisconsin Legislature in 2011, there has been stiff opposition to increasing property taxes in the state, to the point of making a property-tax hike a much steeper hill to climb for municipal and school-district governing bodies.
For that, property taxpayers can be grateful.
But in those six-plus years, nothing has come along in Wisconsin affairs quite like the pending construction, possibly in Mount Pleasant, of a $10 billion plant by the Taiwanese manufacturing giant Foxconn.
This is a greatly different situation, and it’s going to require different rules.
When the Foxconn plant is being built, the local town board, village board or city council might decide to increase property taxes. A decision of that sort would make a certain amount of sense, since the new neighbor will bring about a steep increase in power, water and sewer use.
In other words, Foxconn’s project will bring about a substantial rise in taxing authority in at least one local jurisdiction.
Besides Mount Pleasant, Kenosha is also believed to be in the running as the site of the new plant. As Kenosha Mayor John Antaramian recently warned state lawmakers, wherever the Foxconn plant lands, it will bring with it a Catch-22 for local officials
A special tax-increment-finance district will be created for Foxconn around the undeveloped land in the host community. That district will allow local officials to use the factory’s property taxes to pay for the costs of new infrastructure serving the plant. This infrastructure might include streets, sewers and water lines. But existing state limits on property tax increases mean local governments can’t raise their levies by more than the amount of new construction in the previous year.
If the site chosen were, for instance, in Mount Pleasant, the scenario could easily unfold like this:
Mount Pleasant had a total property value of just over $2.5 billion in 2016. If Foxconn were to add $250 million of taxable new construction in a single year — which, given the company’s plans, isn’t out of the question— then the village would gain the ability to raise property taxes by up to 10 percent. But because the Foxconn plant’s tax payments would be captured by the TIF district, this hypothetical increase would fall on existing homeowners outside the district.
Antaramian asked lawmakers to loosen up existing restrictions governing local taxing and spending, saying the could complicate the Foxconn deal.
On behalf of the Mount Pleasant readers of The Journal Times, we’d like to see a bit more loosening up, as well.
We welcome the jobs that will be created, both directly and indirectly, by the construction of the Foxconn plant. But we’re concerned that local property taxpayers will take a big hit in their property-tax bills for something that will benefit not just them, but people living throughout southeast Wisconsin.
Gov. Walker and the Legislature must find a balance between the tax incentives being offered to Foxconn and their commitment to keeping property taxes down.