Since the 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, the state’s property taxpayers can be grateful.
But in those six-plus years, nothing has come along in Wisconsin’s affairs quite like the pending placement, possibly in Mount Pleasant, of a $10 billion plant by Taiwanese manufacturing giant Foxconn.
This is a dramatically different situation, and it’s going to require different rules.
Because of property tax caps imposed by Gov. Scott Walker and the Legislature, while the Foxconn plant is being built in whichever community it lands, that community’s town board, village board or city council might decide to increase property taxes. Which would make a certain amount of sense, since there will be a steep increase in power, water and sewer use in that community because of the gigantic new neighbor.
The new construction the Foxconn plant brings will bring about a substantial rise in new taxing authority in that community.
Kenosha also is reportedly in the running to be the location of the plant. As Kenosha Mayor John Antaramian said in recent testimony before state lawmakers, there’s a catch-22 – for the younger readers, that’s where you’re damned if you do, damned if you don’t – for the municipality which lands the Foxconn plant.
A special district will be created for Foxconn around the undeveloped land in the host community. That district will allow local officials to use the property taxes paid by the factory to pay for the costs of new infrastructure serving the plant such as streets, sewers and water line capacity. 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 it’s Mount Pleasant, for example, as pointed out in an Aug. 28 Milwaukee Journal Sentinel report, this is an entirely possible scenario under existing state law:
Mount Pleasant had total property valued at 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 magnitude and plans of the company in question, isn’t unrealistic — then the village would have the ability to raise property taxes by up to 10 percent. Because the Foxconn plant and its tax payments would be in a special district, this hypothetical increase of up to 10 percent could fall on existing homeowners outside the district.
Antaramian, when testifying before state lawmakers, asked for more flexibility from state restrictions on local taxing and spending that could complicate the Foxconn deal.
On behalf of the Mount Pleasant readers of The Journal Times, we’d like to see more flexibility, too.
We welcome the jobs coming, both directly and indirectly, through the arrival of the Foxconn plant. But we’re concerned about the possibility of the property taxpayers in one of our communities taking a big hit in the annual bill for something which will benefit all of southeastern 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.