(Photo: Andrew Beckett)
A new report suggests a state tax credit for Wisconsin manufacturers and agricultural producers is costing the state big money, while showing no real returns.
The study by the Wisconsin Budget Project looked at the Manufacturing and Agriculture Credit. Analyst Tamarine Cornelius said it’s expected to reduce state tax revenues in the upcoming fiscal year by about $284 million, with most of the benefits going to the state’s wealthiest residents. “Tax filers with incomes of $1 million and up get 78 percent of the credit,” she said, with the average benefit being about $28,000.
Cornelius said the credit is concerning because there are no actual job creation requirements tied to it, and there’s no evidence it has actually helped create new jobs. “We took a look at how manufacturing jobs have fared before and after the tax credit, and couldn’t find that there was any effect,” she said.
With limited state resources, Cornelius suggested it might be worthwhile for lawmakers to reconsider the credit during next year’s budget process. “Especially given the climate right now – there’s a very aggressive tax cutting agenda, paired with reducing investments in some of things that have helped build Wisconsin’s economy over the years.”
Wisconsin Manufacturers and Commerce, the state’s largest business lobby, criticized the study. In a news release, WMC Senior Vice President of Government Relations Scott Manley said the credit “is growing and sustaining middle class manufacturing jobs in Wisconsin.”
“The Wisconsin Budget Project report against this credit is fundamentally flawed, and does not reflect the economic reality of its impact on our state. The reality is that since this tax credit was enacted in 2011, Wisconsin has grown the fifth-most manufacturing jobs in the country. Prior to the credit’s enactment, Wisconsin was bleeding manufacturing jobs – we lost 81,800 manufacturing jobs between 2006 and 2010. By contrast, we have grown nearly 34,000 manufacturing jobs since the credit was enacted in 2011. The credit has helped to reverse a trend that had devastated family-supporting jobs for middle class families.”