PRIORITY: Development Opportunity Zone (DOZ) Status for Janesville

Development Opportunity Zones (DOZ) are special geographic areas designated by the Wisconsin Legislature. The Wisconsin Department of Commerce oversees these zones, which offer special tax credits to businesses that create or retain jobs in “economically distressed areas”. The state limits (1) the amount of tax credits available in each DOZ, and (2) the number of years each Zone can exist. In the past, the Legislature established Zones in the Cities of Beloit, West Allis, Eau Claire, Kenosha, and Milwaukee, and one specifically for the Gateway Project in Beloit. The Gateway Project’s DOZ is the only Zone currently operating; the terms of all the others have expired.

Beloit’s Gateway Project DOZ was established in the wake of the Beloit Corporation’s closure in 2000. The Project, which lies at the intersection of Interstates 39/90 and 43, is a flourishing 1,600-acre campus that includes housing, commercial and retail development, and a light industrial park. Economic development professionals agree that the Gateway Project’s DOZ status has given the area a significant advantage over its competitors, as companies within the Zone may claim tax credits for job creation and capital investment. Tax credits tied to capital investment are what make the DOZ program so attractive and useful, as many projects simply do not create enough jobs to trigger more traditional state incentives.

Since January 2006, the Janesville area has experienced the loss of over 5,000 direct jobs due to plant closures, downsizings and long-term lay-offs—an estimated 2,600 within the last twelve months. When combined with the significant number of indirect service sector positions that will adversely impacted as a result of these dislocations, the Janesville area has been dealt a debilitating “body blow” to its economic engine. As of August 2008, Rock County’s unemployment rate was 6.7 percent, a full two percentage points above the state average, and is inching dangerously close to 8%. In fact, our unemployment rate has been at or above the state and national average for 31 of the last 32 months.

Therefore, Forward Janesville requests special legislation designating a specific area (or areas) in the City of Janesville (to be determined by the City) as a Development Opportunity Zone(s). We request that this legislation authorize a fifteen to twenty-year lifespan for the Zone, and establish a tax credit cap of at least $10 million. There is no question that Janesville has endured some particularly difficult economic times, and the worst may be yet to come. The bottom line is that we need help. State leaders should do whatever it takes to get our community back on its feet.