Contact: Cullen Werwie, (608) 267-7303
Madison–Governor Walker announced in Lomira today that Wisconsin would be creating three additional Enterprise Zones for the state. Senator Randy Hopper and Representatives Tom Larson, Jim Steineke and Mary Williams will be introducing the legislation to authorize the new zones.
“Enterprise Zones are the most powerful tool the state has to assist the private sector with job creation,” said Governor Scott Walker. “These zones help the state bring in and grow businesses with a major jobs impact. The creation of additional zones will help us reach our goal of a private sector environment that creates 250,000 jobs over the next four years.”
Current law authorizes up to twelve zones. Nine zones are currently under contract with the remaining three in various stages of discussion. The lack of additional enterprise zone authority could cost the state a future significant job creation opportunity.
Examples Enterprise Zones Currently Under Contract
Uline – Pleasant Prairie
Life of zone: 9 years; Jobs created: 1,008
Republic Airways – Milwaukee
Life of zone: 12 years; Jobs created: 770; Jobs retained: 570
Mercury Marine – Fond du Lac
Life of zone: 12 years; Jobs created: 1,311; Jobs retained: 1,526
Oshkosh Corporation – Oshkosh, Appleton, Kewaunee
Life of zone: 10 years; Jobs created: 1,000; Jobs retained: 3,535
Quad/Graphics – Milwaukee, Franklin, Dousman, Kohler, West Allis, Sussex,
Pewaukee, Menomonee Falls, Lomira, Hartford
Life of zone: 11 years; Jobs created: 1,000; Jobs retained: 5,500
Bucyrus International – Milwaukee and surrounding communities
Life of zone: 10 years; Jobs created: 500
Components of the Enterprise Zone Credit
Job Creation – the program offers a tax credit equal to 7% of the taxpayer’s payroll in the enterprise zone that is paid to new full-time employees who earn more than $20,000 in a Tier 1 county or municipality ($30,000 in a Tier 2 county or municipality), but less than $100,000 annually. (The Governor’s Budget lifts this $100,000 income limit, but establishes a maximum annual credit of $10,000 per job.) Counties and municipalities are assigned to a tier based on distress criteria including the unemployment rate, poverty rate, and median family income.
The timing of the fiscal effect of job creation credits varies according to the individual circumstances of the project.
* A business currently located in-state and is expanding will typically phase in job creation. Since the credits are based on performance, the fiscal effect of the credits will follow the job creation schedule.
* A business moving to Wisconsin from out-of-state will create most jobs at the time of the move, but may phase some in later. The majority of the fiscal effect will typically be felt in the first year of the contract.
Job Retention – 2009 Act 11 extended the credit to job retention projects in which the business makes a significant capital investment and is either an original equipment manufacturer with a significant supply chain in Wisconsin or has more than 500 full-time employees in the enterprise zone. The credit is calculated in the same way as the job creation credit. The fiscal effect of these credits typically begins immediately, since the employees are already on staff.
Capital Investment – If a business makes a significant capital investment in the zone, Commerce may certify it to receive tax benefits not exceeding 10% of the capital investment. This capital investment would typically take place soon after designation, and the fiscal effect would then begin immediately.
Training – Credits based on training will follow the training schedule.
Wisconsin Supply Chain – A business may earn up to 1% of the amount paid for good and services purchased from a Wisconsin vendor.