PRESS EDITORIAL: Your tax dollars, their incentive

When the regional tax to pay for the Milwaukee Brewers stadium was proposed in 1996, Gov. Tommy Thompson famously told a northern Wisconsin audience that the add-on to the state sales tax would “stick it to” the residents of Milwaukee and the surrounding counties, including Ozaukee.

It was probably an accidental admission by Thompson, who supported the tax, but the quip was spot on. The stadium tax did indeed stick it to the people of the affected counties, who paid $605 million over 24 years for the benefit of a profit-making facility owned by a private company.

The stadium tax would still be sticking it to residents of southeast Wisconsin if the Legislature had not declared an end to it in 2020. Now it looks as though the holiday from the tax will be brief. The stage is being set for a proposal to raise more than $100 million in public financing, probably including a revived stadium tax, for upgrades of the Brewers’ American Family Field.

The sales pitch for charging taxpayers for the cost of privately owned business facilities will, as usual, be based on the premise that the resulting economic development benefits the public. Numerous studies have found that assumption false.

The American Economics Liberties Project reported: “Pretty much any study done by anyone anywhere that is credible and independent looking at sports stadiums finds that they have next to no impact on the local economy.”

Taxing the public for private economic development of various types seems to be an irresistible temptation for government officials. Just ask the taxpayers of Port Washington, who are on the hook for a $1 million subsidy billed as an incentive for a developer to build a brewpub overlooking the harbor. Never mind that no incentive was needed to develop precious public lakefront land that was sold at a bargain price to the company that will own the brewpub.

Spending revenue raised through tax incremental financing as a development incentive is a misuse of TIF money meant for public infrastructure that is found in many municipalities. But in Wisconsin, it is overshadowed by what is widely considered the mostly flagrant abuse of economic development taxation in the nation—the Foxconn fiasco. It is centered in Racine County, but it affects every state taxpayer.

In his book “Foxconned,” journalist Lawrence Tabak documents a $3 billion rip-off of taxpayers in the name of economic development. Posing with shovels in a ground-breaking ceremony for a manufacturing plant that turned out to be imaginary, former Gov. Scott Walker called it the “single largest economic development project in the history of the state” and, one-upping him, former President Donald Trump proclaimed it “the eighth wonder of the world.” Five years later, a one-word description would suffice—“fraud.”

In fact, there is speculation that Foxconn, headquartered in Taipei, will be sued for fraud if it fails, as expected, to comply with a contract requiring the completion of a TV screen factory by the end of 2025.

In exchange for $3 billion in taxpayer incentives, Foxconn promised to build a $10 billion plant that would create 13,000 jobs. The company built about 5% of the promised manufacturing space and created only a few hundred jobs.

Gov. Tony Evers renegotiated the state’s pay-off to Foxconn, but it is still substantial, and includes a taxpayer guarantee of the debt taken on by local municipalities for Foxconn’s benefit. Thanks to the blind generosity of elected officials of Racine County and the Village of Mount Pleasant, that debt is $500 million borrowed to buy property that was then deeded to Foxconn and to build infrastructure on the thousands of acres of land stripped of homes, farms and vegetation.

“Foxconned” describes how eminent domain was used ruthlessly to force homeowners and farmers off their land and details how taxpayer money dedicated to the Foxconn project enriched consultants, contractors and politicians.

The author concludes: “Public incentive spending engineers public support through promised job creation but ends up enriching the few.”

The few get enriched by, in the immortal words of Tommy Thompson, sticking it to the taxpayers.

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Ozaukee Press

Wisconsin’s largest paid circulation community weekly newspaper. Serving Port Washington, Saukville, Grafton, Fredonia, Belgium, as well as Ozaukee County government. Locally owned and printed in Port Washington, Wisconsin.

125 E. Main St.
Port Washington, WI 53074
(262) 284-3494
 

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