GREEN BAY, Wis. (WBAY) -- A tax credit used by municipalities throughout the state, including Green Bay, could be in jeopardy with the passing of the proposed state budget.
It's called a historical tax credit and it's often used to help redevelop old, vacant buildings, but Governor Scott Walker is proposing some changes that have already impacted Green Bay.
“Green Bay has a rich history with some beautiful buildings and a great story to tell,” said Wendy Townsend, project and program manager with Green Bay’s Economic Development.
Over the past several years, the City of Green Bay has put a lot of effort into redeveloping old, vacant buildings by helping developers apply and get historical income tax credits from the federal and state government.
“The credit consists of 20 percent federal credit and then 20 percent state credit, so you could have up to 40 percent of project categorized under this historic tax credit,” said Townsend. “They may be used together or separate in ta project.”
Townsend said it's basically businesses helping other businesses.
“So if you were a for-profit business and you were paying taxes, you can buy these tax credits. Then that company uses that as their project injection and then you are able to use it as part of your tax relief on your business,” said Townsend.
A few of Green Bay's success stories include the Meyer Theatre, Pete's Garage and the Ferguson Family YMCA.
“That building has been restored into a new age,” said Townsend.
But proposed changes in the 2017-2019 state budget could swing the momentum. Gov. Walker wants to put a $10 million cap on the credits and add a provision that would take way any credits promised to a developer if certain job requirements aren’t met.
However, Townsend said that provision isn't necessary because developers already don't get the credits unless the project is complete.
“So they are actually incentivized to finish to be able to get the rewards,” said Townsend.
Townsend hopes Gov. Walker backs down on the provisions saying the uncertainty has already halted two projects in Green Bay, the Schauer and Schumacher building and another building that hasn't been publically named yet.
“A key building that a developer would love to work with, but was uncertain with where the credits were so that is on hold until they understand what the financial commitment would be on that ,” said Townsend.
Gov. Walker proposed a cap on the historical income tax credits in the state's last budget, but it was shot down.
Action 2 News has been told state lawmakers are considering a $20 million cap on the historic tax credits instead, but that has yet to be determined.