RACINE — With the imminent arrival of Foxconn in its suburban backyard, the City of Racine now has a tremendous opportunity to live up to its economic potential.
But to do so, the city will “need to enhance its attractiveness to developers and to the thousands of new residents who may be seeking to relocate to fill the jobs promised by Foxconn and its supply chain.”
That is among the findings in a recently released report, “City of Racine’s Fiscal Condition: Living Within Its Means,” commissioned by the Johnson Foundation at Wingspread and produced by the Wisconsin Policy Forum, which analyzes the city’s financial health.
The Policy Forum evaluated the city’s finances from 2012 to 2016 and its current condition in areas including health care, debt and transportation.
Rob Henken, Wisconsin Policy Forum president, said with Foxconn coming to the area, the project’s size is going to highlight some of Racine’s underlying challenges.
The city, Henken said, has managed its budget fairly well despite rising health costs. However, a lack of “financial capacity” has put the city finances in potential jeopardy for the long term.
“Foxconn presents economic development and municipal revenue opportunities for the city,” the report states. “On the negative side, it raises the prospect of vastly increased municipal service demands that city leaders are just beginning to contemplate.”
The report referenced two of the main concerns for the city — its long-term debt and costs to retiree health care — which could affect the city’s fiscal state later on.
“Clearly ... it’s impossible to predict the future; we don’t know what’s going to happen,” Henken said. “But an underlining theme of this is Foxconn — what’s Foxconn going to mean to all of this?
“Foxconn could be what it takes to start to address this net new construction issue and start to have the development that’s going to produce a greater property tax base and produce healthier revenue growth.”
Transit is one of the city’s largest problems, which Henken said is “emblematic of the overall challenge,” with the city subsidizing bus routes that serve suburban communities.
According to the report, the Ryde program, which allows the city to provide busing to surrounding communities, receives $238,000 from Mount Pleasant and $32,900 from the Village of Caledonia. The Village of Sturtevant recently voted to not participate in the program and thus kept its $42,600 contribution.
“We see the city having to put in more and more levy (for busing) over time which adds to the general pressures that it’s facing,” Henken said.
The Policy Forum report says that “whether the subsidies for service outside of Racine can and should continue is likely to be debated as Ryde’s fiscal challenges mount. Ironically, these discussions may occur at the very time that a vast expansion of regional bus service appears to be needed in light of Foxconn and its anticipated related development.”
But Foxconn may provide Racine and its surrounding communities with “a unique opportunity to tackle the issue of regional bus service collaboratively and to determine an equitable means of delivering and paying for a true regional transit system,” the report states
Discussions about ‘regionalism’
Racine Mayor Cory Mason said Foxconn has “forced conversations about regionalism” and how the surrounding municipalities might work together.
“The city doesn’t exist in a vacuum; it exists as part of a larger community,” Mason said. “We have a shared future in the region … what we haven’t figured out is how to govern together and share resources very well. Mostly from decisions made by people who are no longer in office.”
Mason said it’s possible that upward of 200,000 people could call Racine County home and estimates a majority of those people will reside east of Interstate 94. (As of 2017, the county’s population was 195,294.) The increased population will likely put added stress on services such as police, fire, sewer and water.
“At some point there will be a discussion about water resources and what’s an equitable distribution for the resource,” Mason said. “Those are all conversations that we’ll need to have.”
However, the last consolidation of resources — county dispatch services — caused a legal battle between the city and county during then-Mayor John Dickert’s tenure.
Mason said he and County Executive Jonathan Delagrave found a solution to that problem, and with Foxconn soon to break ground, the region has a sense of “we’re in this together, and we’re competing as a region against Milwaukee and Kenosha.”
Mason points to the relationship between the villages of Somers and Pleasant Prairie and the City of Kenosha and their forging of cooperative agreements as a potential image of Racine’s future.
“It hasn’t been perfect … but they figured it out, and they are growing at a rate much faster than our region is,” Mason said.
“We have a shared future in the region … what we haven’t figured out is how to govern together and share resources very well.” Racine Mayor Cory Mason