Contact: Mr. Bill Williams
President, Gogebic Taconite
(715) 561-2601
Mr. David Ward
President, NorthStar Economics, Inc.
(608) 279-3393
Preliminary Tax Impact study indicates long-term tax benefits
HURLEY – The proposed Gogebic Taconite iron ore mine will generate approximately $1.4 billion in total state and local tax revenue over the expected 35-year life of the first phase of the mine, according to the Preliminary Tax Impact study recently completed by NorthStar Economics, Inc. — a nationally recognized economic consulting and research firm specializing in analysis of the Wisconsin economy. The construction and operation of the proposed Gogebic Taconite Mine would create long-term direct, indirect and construction-related tax revenues for local communities and the state of Wisconsin.
“This Preliminary Tax Impact study clearly shows the extremely positive long-term economic benefit of the proposed Gogebic Taconite Mine,” said Bill Williams, president of Gogebic Taconite. “The $1.4 billion in taxes generated by the mine will be an economic boost to both the Gogebic region and the state of Wisconsin for generations.”
Total direct tax revenue of more than $756 million will be created in the form of net proceeds taxes, income taxes, sales and use taxes, property taxes, mining fees and other taxes. Net proceeds taxes — special mining-specific taxes required by state law and distributed to local communities impacted by mining — are projected to be approximately $277 million during the 35-year life of the first phase of the mine. Of the $756 million in direct tax revenues, local communities in the 12-county Gogebic region will benefit from approximately $298 million in direct local tax receipts throughout the first phase of the mine, while the state direct taxes are estimated to be approximately $458 million during this same time.
“The proposed Gogebic Taconite Mine will generate significant tax revenue for both the state of Wisconsin and local communities within the Gogebic region,” said David Ward, president of NorthStar Economics. “Mining is a significant national and regional industry and the proposed Gogebic Taconite Mine will add to that economic impact by generating more than $1.4 billion in long-term tax benefits right here in Wisconsin.”
An earlier Economic Impact Study released by NorthStar Economics predicted the creation of approximately 2,800 mining-related and ancillary jobs in the 12-county Gogebic region. It is estimated, that the 2,100 ancillary jobs and the increased economic activity stimulated by the Gogebic Taconite Mine will generate more than $600 million in indirect tax revenue during the first phase of the mine. That translates to annual indirect tax receipts of more than $17 million. The study predicts the yearly total direct and indirect tax benefit to both local communities and the state to be an estimated $39 million. Study estimates are based on production levels of 8 million tons annually during the first phase of the mine. In addition, construction-related taxes are predicted to create more than $20 million in tax receipts.
“The people of Hurley need the good-paying, long-lasting jobs that will be created by the Gogebic Taconite Mine,” said Joe Pinardi, mayor of the city of Hurley. “And, the local mining tax revenue will help us educate our children, care for our seniors, provide police and fire protection for our city and build that stronger future we all want.”
Gogebic Taconite, a subsidiary of Cline Resources, is exploring the possibility of developing a portion of the Gogebic iron deposit in Ashland and Iron Counties. The company holds an option to lease the mineral rights on the entire deposit, but has indicated it would concentrate on determining whether permits could be obtained for approximately 4,000 acres within the 22,000 acre deposit and adjacent lands. For more information, please visit http://www.gogebictaconite.com.
