Gov. Doyle: Governor Announces $315,000 Transportation Economic Assistance Grant to Help Beloit Company Expand, Create Jobs in Community

Contacts:
Gati Grundmanis, Department of Transportation, 608-266-3488
Jessica Erickson, Governor’s Office, 608-261-2156

Also Signs Legislation to Further Grow Wisconsin’s Economy

BELOIT – During a visit to Beloit today, Governor Jim Doyle
presented a $315,000 Transportation Economic Assistance (TEA) grant check to
Beloit City Council President Terry Monahan to assist American Aluminum
Extrusion Company as it expands and creates jobs in the community. The
grant is the state’s contribution toward constructing roads to help support
the company’s operations in Beloit.

“Investing in quality transportation is vital for businesses
that are looking to expand in Wisconsin,” Governor Doyle said. “By
providing these funds, we are helping add quality jobs here in Beloit while
improving access to American Aluminum Extrusion Company’s facility.”

The TEA grant covers 46 percent of the costs of
reconstructing Third Street from West Grand Avenue north 1,388 feet to St.
Lawrence Avenue; constructing a 580-foot extension of Third Street north and
west to Fourth Street; vacating St. Lawrence Avenue between Third and Fourth
streets; and installing sidewalk, landscaping, and lighting. The city is
providing a 54 percent match. The project has a total cost of $680,000.

“This project directly and indirectly creates more than 200
jobs throughout the state, including 63 at American Aluminum Extrusion
Company, resulting in $6 million in annual wages,” Governor Doyle said.
American Aluminum Extrusion Company is an aluminum extruder and fabricator
and produces products like ladders and levels. The company is in the midst
of a plant expansion at the former Beloit Corporation property for a total
capital investment of $6.8 million.

Since its creation in 1987, the TEA grant program has
invested more than $56.46 million in 230 projects in Wisconsin. TEA grants
have directly and indirectly created 55,233 jobs at 248 businesses
throughout the state.

While in Beloit, the Governor also signed Senate Bills 305
and 306, which make substantial changes in tax incremental financing – the
primary tool available to cities and villages for economic development.

“These two bipartisan bills represent the most extensive
reform of tax incremental financing since the program began in 1975,”
Governor Doyle said. “They address numerous problems with TIF districts and
fit perfectly within my ‘Grow Wisconsin’ plan. When we are working so hard
at the state level to grow the economy and create good paying jobs, we
cannot let similar efforts stall at the local level.”

For nearly 30 years, cities and villages have used TIF
districts to turn blighted, urban areas into sites suitable for business and
industry. As taxes increase along with property values in these development
zones, the community is able to pay for improvements. Once those costs are
covered, the district is terminated, and full value of the property is added
to the tax base. The result is a stronger local economy, an expanded tax
base benefiting homeowners, and a far more desirable urban setting to live
and work.

“While this system has worked well, it has not kept pace
with our needs as we compete in an increasingly global economy,” Governor
Doyle said.

Beloit and nearly 100 other communities have reached the
statutory limit on creating TIF districts to assist in economic growth and
job creation at the local level.

The legislation frees them to add districts. A city or
village can form a new district as long as the equalized value of the
proposed district, plus the increment value of existing districts, does not
exceed 12% of the community’s total equalized value. Current law sets two
caps: 5% based solely on total increment value and 7% combining equalized
and increment values of districts. A community exceeding both is sidelined
until an existing TIF district closes. Districts now can operate for up to
23 years.

The existing limits can hinder development in communities
like Beloit with low property values. Last year, Beloit reached its limit
when it formed a new district to help Frito-Lay, Inc., with its latest
expansion project. The new TIF district is financing the construction of a
Cranston Road, pedestrian bridge at a cost of $500,000. This spring,
Frito-Lay will begin a $4.1 million office expansion. Recently, the company
completed an $11.7 million plant expansion that added 27 new jobs. With well
over 700 workers, Frito-Lay is one of Beloit’s largest employers. In
building the pedestrian bridge, however, Beloit reached its TIF limit.

The TIF reform legislation also allows for mixed-use
developments, combining industrial, commercial and residential projects and
encourages smart growth and environmentally friendly, compact, urban
developments.

The Governor thanked the legislators who worked hard to get
these bills his desk: Senators Cathy Stepp, Bob Jauch, and Carol Roessler,
and Representatives Wayne Wood, Mickey Lehman, Dan Shooff, and Larry Balow.
He also thanked Department of Revenue Secretary Mike Morgan for his work on
these bills.

Governor Doyle also signed Senate Bill 6, which helps game
farmers by creating a sales tax exemption on the sale of live birds to a
hunting preserve. Under the old law, the birds could be taxed twice – once
when the hunting preserve buys it, and once after the hunter gets it. Under
the new law, the bird is taxed only once. Two years ago, the Department of
Revenue ordered game farmers to collect four years of back taxes, rightfully
drawing criticism from more than 40 legislators, including Senator Judy
Robson.

The Governor thanked Senators Robson and Roessler for their
leadership on this bill.