Harsh economic times have communities scrambling for ways to support development without becoming hostages to businesses that threaten to leave.
In Brookfield, for example, a local company requested city support to build better utilities. Brookfield officials responded by considering a grant and loan program, but they are being careful to attach strict job-creation or financial requirements to any subsidies.
“Why do we do this?” Dan Ertl, Brookfield’s director of community development, said of community subsidies. “It is to sustain our nonresidential tax base, to lighten the burden on our residential taxpayers.
The bottom line is we try to keep our communities strong economically.”
But there is concern that businesses can take advantage of government subsidies. Richard Wetzel, one of three Fond du Lac County supervisors to vote against borrowing $50 million to keep Mercury Marine from leaving, said he opposes county government becoming a banker.
“How do we handle the next company?” he said. “Whatever it is, if it’s a large company or a small company, they’re all going to point to the fact that we helped one, so we’ve got to help more, and I think our constituents are going to get a little uptight if that continues to happen.”
The borrowing, which Fond du Lac County will support with a new 0.5 percent sales tax also approved Wednesday night, is part of an incentive package the county, city of Fond du Lac and state assembled after Mercury Marine threatened to move.
Local governments have supported local employers for 30 years, and should continue to do so, said Curt Witynski, assistant director of the League of Wisconsin Municipalities.
“These bigger companies involved in this time of economic downturn and uncertainty, that’s really put the spotlight on failing companies and governments trying to keep them in place.”
Herb Ottery, Fond du Lac County supervisor who voted against the Mercury Marine borrowing and new sales tax, said the state should have played a bigger role in the incentive package. Creating taxes to support a specific company has not been, and should not be, the county’s responsibility, he said.
“Certainly you want to keep a business,” Ottery said. “But is that the role of the sales tax?”
The sales tax will raise up to $7 million a year, and no more than half will be spent on Mercury Marine. A portion of the remaining sales taxes will be dedicated to a county program that gives loans to businesses.
Ottery and Wetzel said they wonder if Mercury Marine’s success in getting subsidy commitments is opening the floodgates and, if so, how to tell if companies truly need support or are looking for handouts.