Feb. 7, 2002
Despite the recession and its ongoing threat to the welfare of construction, the building industry has held a $7 billion ace in the hole.
Industry leaders knew all along that whatever hits construction took, builders always had Wisconsin Energy’s Power the Future plan tucked away for a rainy day. That plan calls for about $3 billion to construct three coal-fired power plants in Oak Creek and two natural-gas plants in Port Washington as well as $4 billion for transmission lines, power upgrades and related work.
Let’s break that down: At the peak of construction in Port Washington and Oak Creek, the projects would provide 1,700 jobs and pay out $1.05 billion in payroll.
That’s a firm safety net. A group of projects that the industry thought was a sure bet. Well, it’s time to think again.
Gov. Scott McCallum’s budget reform bill — to bring the state out of its $1.1 billion deficit — created a splash in the state Capitol last month, and its waves are finally lapping up on the power-plant shore.
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When McCallum proposed cutting shared revenue to municipalities, towns and counties, he indirectly sliced away any incentive for those communities to host power plants, which are exempt from property taxes. Under shared revenue, the state this year will dole out $28 million in utility revenue to communities.
But once shared revenue disappears in two years — as McCallum’s plan outlines — the utility-revenue well will run dry. So, without state money filling community coffers, where’s the incentive to host a power plant?
It’s not there.
Why would a community want to convert taxable property into a tax-exempt power plant, cover the costs of various infrastructure upgrades and have nothing from the state to show for it? And don’t turn to the energy companies for a solution because they say they don’t have the cash to make up for money the state takes away.
State lawmakers, such as Rep. Tim Hoven, R-Port Washington, say the state will face a power shortage by 2010. He said something needs to be done before those dark days are upon us.
Hoven proposed a bill to double the utility shared revenue to communities. But considering McCallum’s budget act, Hoven is rethinking his plan in hopes of salvaging some incentive for communities, which under McCallum’s proposal, as Hoven said, "would be better off siting a landfill than a power plant."
Whether its Hoven or one of his colleagues, someone must develop a counterbalance to McCallum’s shared-revenue cuts. If they don’t, that $7 billion that once seemed so firmly in the industry’s grasp will almost surely slip away.