Microsoft to redirect $5 million yearly incentive to Mount Pleasant, Village says

Originally published by Racine County Eye.

Microsoft will redirect a development incentive of up to $5 million a year that Mount Pleasant agreed to pay it, and most of the money will go to the Village, the Village said in a news release Monday.

The Racine County Economic Development Corporation (RCEDC) would receive the money first. It would keep about $100,000 for countywide work and send the other $4.9 million to the Village. The Village Board will decide how to spend it when it approves its 2027 budget.

The $4.9 million is an annual amount, Village Communications Director Sean Ryan said. It is the first incentive payment Microsoft is eligible to receive, he said.

What is the Microsoft incentive in Mount Pleasant?

The Village approved the incentive as part of a 2023 development agreement with Microsoft. Village officials say Microsoft can now collect it because its buildings have added more property value than the agreement requires.

Nothing about the agreement has changed, Ryan said. This is a redirect of payments, and he said it is expected to continue as long as the incentives are in place.

The Village ties the move to Microsoft’s Community-First AI Infrastructure initiative, which the Village says includes a commitment to forgo local property tax incentives. Microsoft’s own description of the initiative, published in January, says the company won’t ask local governments to reduce property tax rates and will pay its full and fair share.

“When we announced that we would build a datacenter campus in the Village of Mount Pleasant in 2023, we made it clear that the community should benefit from our presedata centerosoft Vice Chair and President Brad Smith said in the release.

How will Mount Pleasant use the money?

The Village says it plans to use the money to keep tax bills stable while maintaining services, and to pay for capital costs like rebuilding roads or buying police and fire vehicles without borrowing. The release says it will use the funds to reduce costs, such as a tax levy starting in 2027.

“Taxpayers will benefit immediately, and will continue to benefit for years to come, because of the data centers Microsoft is building,” Village President David DeGroot said in the release.

RCEDC, a nonprofit, is “proud to partner with Mount Pleasant and Microsoft on this important investment,” Executive Director Jenny Trick said in the release. She said the money “will expand our capacity to drive economic growth and create new opportunities throughout Racine County.”

When would the change happen, and who decides?

The first tax bill to reflect the change is the 2026 bill residents receive in December 2026, Ryan said.

The Village can’t estimate what it means for an average home’s bill until the tax levy and rates are set through the 2027 budget process, he said. Village staff estimates the first will be $4.9 million in the 2027 budget proposal, which the release says will be released in October. The Board decides when it approves that budget.

Ryan has not yet answered questions about how the $4.9 million will be split between lowering the levy and capital costs, or whether the Village will release a signed document on the redirect. He said more answers will follow.

Where does the money come from?

The Village pays the incentive from property taxes generated by the data centers in Tax Incremental District (TID) No. 5, according to the release. It says the $5 million is only part of what Microsoft pays in property taxes because of its data centers there.

Mount Pleasant created the district in 2017 to prepare land along Interstate 94 for industrial development. Microsoft and Foxconn have both built there. The Village says the district is in good shape to pay off its land costs and that officials are looking at other ways it could ease taxes.

What is Microsoft building in Mount Pleasant?

Microsoft said June 23 that it had finished its first Mount Pleasant data center and had nearly 550 full-time employees on site. A second facility is under construction next door, with completion expected in 2028.

Racine County Eye asked the Village about the redirect Monday. Ryan answered some of the questions and said more answers will follow. This story will be updated.