Manufacturing tax credit added 21,000 jobs
via Milwaukee BizTimes by Arthur Thomas
Wisconsin’s manufacturing and agriculture tax credit accounted for almost 21,000 new manufacturing jobs since implementation started in 2013, according to a new study from University of Wisconsin-Madison Professor Noah Williams.
The study also concluded the tax credit accounted for 42,000 total jobs throughout the state.
Williams, who also served as an informal adviser to Gov. Scott Walker’s presidential campaign, suggests manufacturing employment would have fallen in the state without the tax credit and previous efforts to gauge the impact of the policy using only statewide job data failed to account for other factors.
“As an economist, I will leave the policy decisions to the Legislature and the governor. However, my research suggests that this policy has helped create substantial job growth in Wisconsin,” Williams said.
The analysis, released through the Center for Research on the Wisconsin Economy, looked at job data in Wisconsin counties bordering other states to help isolate the impact of the tax credit before working toward a statewide estimate. Agricultural jobs were not included because of a lack of data at the county level.
Since 2013, manufacturing employment in Wisconsin’s border counties grew 1.9 percentage points faster than in those counties just across the state line, according to Williams.
He also acknowledged the tax credit “was only one part of an overall attempt to change the business climate in Wisconsin, which included changes in unionization, personal taxes, regulation, and becoming a right-to-work state in 2015.”
The tax credit, passed as part of the 2011 state budget, phased in a series of increasing tax credits each year starting in 2013. It was fully phased in starting in 2016 and leaves manufacturers with minimal state taxes.
Opponents of the tax credit have pointed to Legislative Fiscal Bureau estimates showing the policy has reduced state revenues substantially. The most recent estimate suggests a reduction of $1.4 billion from 2013 to 2019, compared to an original estimate of $617 million.
An analysis by the Wisconsin Budget Project showed the state’s manufacturing sector increased employment by 2.1 percent in the two years before and after implementation of the tax credit, even as job growth in other industries increased faster.
Complete story here > Study: Manufacturing tax credit added 21,000 jobs