A new report blasts the state’s manufacturing and ag tax credit for going over cost estimates while doing “little to promote job creation.”
The report, from the Wisconsin Budget Project, found the tax credit will cut revenues by $284 million when it’s fully phased in next fiscal year. That’s more than double the $129 million the Legislative Fiscal Bureau had projected for FY 2017 when the tax credit passed in 2011.
The credit reduces the amount of income taxes businesses or individuals have to pay for any manufacturing and ag activity, though the report found about $5 of every $6 of the credits has gone to manufacturers.
The report calls the tax credit a “boon for the wealthy,” finding 78 percent of the tax credits for individuals go toward those making $1 million or more.
But it found “little evidence” the credit has led to significant job growth. It noted the state’s percentage growth in manufacturing jobs was the same before and after its implementation — and still isn’t significantly higher than the national average.
“This is one of the most misguided tax breaks Wisconsin has ever seen,” Wisconsin Budget Project research analyst Tamarine Cornelius said. “Not only does the credit only benefit a wealthy few, but it does very little to stimulate job growth — and all at a very steep price.”
The $284 million the state is losing in tax revenue next fiscal year, the report says, could go toward waiving tuition and fees at the state’s tech colleges or pay for road improvements or 4,000 new teachers in K-12 classrooms.
“These cuts will make it harder for manufacturers and other businesses to hire the skilled workers they need,” Cornelius wrote.
Tom Evenson, a spokesman for Gov. Scott Walker, said the guv “continues to support [the credit] as a driver of economic growth in Wisconsin” because the two industries are key sectors in the state economy.
Wisconsin, Evenson said, ranked in the top 10 in manufacturing job growth between December 2010 and April 2016.
“Our reforms are working and our economy is growing,” he said. “Wisconsin’s unemployment rate is the lowest in 15 years and more people are working today than ever before in our state’s history.”
— By Polo Rocha,
WisBusiness.com
