MON AM News: GOP bill would create state tax credit for video game companies; Yellen announces training facility expansion during stop in Wisconsin

January 29, 2024

— Republican lawmakers recently circulated legislation that would create a tax credit aimed at attracting video game companies to Wisconsin.

Rep. Clint Moses, R-Menomonie, and Sen. Patrick Testin, R-Stevens Point, sent a co-sponsorship memo to other lawmakers promoting the bill. In it, they note the video game industry dwarfs both movies and television, and is expected to grow 8.7% per year between 2024 and 2027.

“Many employers in the video game industry have expressed an interest in leaving California, the current hub of the industry,” the lawmakers wrote. “These companies wish to expand their base and bring in additional studios. This is quite the opportunity for Wisconsin.”

Vancouver, Quebec and Austin, Tex. are considered “primary growth regions” for video game development due to their tax incentive programs, according to the memo. The bill authors say the proposed bill would create a similar tax incentive for video game companies.

Under the legislation, an owner of a copyright in “digital interactive media or entertainment” — such as a video game development studio — could get a refundable income tax credit equal to 30% of the qualifying salary or wages and 30% of other related spending in Wisconsin. That could include purchases of software and equipment as well as leasing facilities.

“The video game industry provides high paying jobs in Wisconsin,” the lawmakers wrote. “There are multiple computer related jobs including programmers, as well as graphic designers, musicians, actors, stunt personnel, and project managers.”

Applications for the credit would go through the state Department of Revenue, which would have to determine if the applicant had at least $25,000 in eligible expenditures for the given tax year, according to analysis by the Legislative Reference Bureau. The agency or a certified auditor would also audit the applicants, who would be required to reimburse DOR for related costs.

And DOR would be required to report to the governor and taxation-related legislative committees every two years on the tax credit program, including economic impacts and other details.

The bill has the support of the Wisconsin Technology Council, which advocates for tech-driven industries in the state. Tech Council President Tom Still notes the legislation was “reviewed extensively” by DOR before it was put forward, giving backers more confidence. And he said it takes privacy concerns into consideration, so people can’t get tax credits for putting “spyware” into games.

“Video gaming is going through a transition that should make it easier to attract talent to existing companies in Wisconsin,” he told WisBusiness.com “There have been some layoffs in larger companies (Activision Blizzard, Riot) that will release talent. Some may choose to come here and perhaps even start their own gigs.”

The memo also highlights video game education programs in the state, noting the UW-Stout School of Art and Design is “recognized as one of the best in the Midwest” and has a motion-capture studio like those used by video game developers.

Existing video game companies in the state include PUBG, Raven/Activision/Microsoft, Lost Boys, Roundhouse, Filament and Midwest Games, which last year landed $3 million in a financing round led by TitletownTech in Green Bay.

Midwest Games founder and CEO Ben Kvalo says he supports the bill because it would “greatly help” video game developers and professionals in the state.

“This goes a long way in our ability to attract, retain, and bring back talent that we’ve lost over the last few decades,” he said in an email. “I hope this is the first of many steps in our fight against brain drain… This kind of bill is the difference between billions of dollars coming into or leaving our state.”

See the bill text.

— U.S. Treasury Secretary Janet Yellen during a stop in Milwaukee announced $1.5 million in federal funds to expand and modernize a worker training facility in the city.

Yellen made the announcement that would aid the Building Industry Group Skilled Trades Employment Program and Wisconsin Regional Training Partnership, a non-profit dedicated to connecting people with family-sustaining jobs. It came a day after President Biden went to Superior to announce billions in federal infrastructure funding.

“The President and I know how much having a good job can mean,” Yellen said Friday. “It can be the difference between being able to provide for one’s family and having to struggle to do so; between a life that feels stable and one that feels precarious; between thinking only about this month and planning for the years ahead.”

Yellen thanked U.S. Sen. Tammy Baldwin, D-Madison, for helping deliver the funds. She also said the money will help the WRTP advance its mission to equip Wisconsinites with skills they need to obtain good jobs and get ahead.

The Republican Party of Wisconsin ripped Yellen’s visit, arguing Wisconsinites don’t care to hear what she says.

“From her ‘transitory inflation’ debacle to declining wages for working families, Janet Yellen is the last person Wisconsinites want to hear from about the economy,” RPW spokesperson Matt Fisher said. “Voters are fed up with Bidenomics and will send Joe and Janet packing this November.”

Yellen also highlighted some of the major investments the Biden administration has made and how they have impacted Wisconsin. She talked about the American Rescue Plan Act, supporting unions through workforce development programs, and creating good jobs through Bipartisan Infrastructure investments, the CHIPS and Science Act and the Inflation Reduction Act.

“Workforce development programs aren’t new,” she said. “But with this Administration, programs like WRTP | BIG STEP are getting more of the support they need.”

See the text of her speech.

See video.

— The Wisconsin Women’s Business Initiative Corporation has announced a new program providing capital for minority-led businesses in Milwaukee.

The organization recently announced the MKE Build Operate Scale and Sustain initiative, or MKE B.O.S.S. The effort also involves Miwaukee’s Northwest Side Community Development Corporation and the Self-Help Federal Credit Union, which has dozens of branches across Wisconsin, Illinois, California and Washington.

SHFCU is the lead grantee for the program, which is funded by JPMorgan Chase & Co., according to the release. While the credit union will provide loans over $1 million, the NWSCDC will offer loans between $250,000 and $1 million and the WWBIC will provide loans from $1,000 to $350,000.

“This will be a game changer not only from a partner collaboration perspective, but truly enhancing how referral services are provided to our entrepreneurs of color,” said Kamaljit Jackson, vice president of programs and operations for the WWBIC.

See more details in the release.

— Lisa Johnson, CEO of BioForward Wisconsin, says she’s confident lawmakers will pass legislation by the end of February that would provide millions in matching funds as part of Wisconsin’s recent federal tech hub designation.

“The governor then does have to sign it immediately,” Johnson said on WISN’s “UpFront,” which is produced in partnership with WisPolitics. “The [Economic Development Administration] have been clear. You have to have the matching funds available before our deadline of February 29.”

The current legislation would provide $7.5 million in state matching funds. If Wisconsin were to be selected, Johnson said, the state could see $50 million to $70 million from the federal government, a program that’s part of the CHIPS and Science Act.

“The EDA has already told us after this summer we already do agree, we think you can do it, but then if our state didn’t come through? Then that’s a message to them going your state doesn’t even believe in this,” Johnson said. “So now the state is coming forward and saying we do believe in it, we agree and we’re willing to put money behind it, as well as private industry, BioForward, we’re all putting commitments towards this.”

See more from the show here.

Listen to a recent podcast with Johnson.

Top headlines from the Health Care Report…

— Researchers in Madison have found a new target for potential treatment of colitis, a severe form of inflammatory bowel disease, and related cancers.

For more of the most relevant health care news, reports on groundbreaking research in Wisconsin, links to top stories and more, sign up today for the free daily Health Care Report from WisPolitics and WisBusiness.com.

Sign up here.

— The new 2024 WisPolitics Directory & Government Guide has arrived.

This essential printed booklet has photos and contact info for all the major political VIPs in Wisconsin.

Click here to order at least five copies of the printed directory.

Badger Meter sales topped $700 million in 2023

Doc Rivers was lured back to coaching by the chance to compete for an NBA title with the Bucks

TOPICS

AGRIBUSINESS

– Boost herd health with genetics and care – dairy workshop

CONSTRUCTION

– 2024 Mayor’s Design Awards nominations open in Milwaukee

EDUCATION