MOUNT PLEASANT, Wis. (CBS 58) -- Mount Pleasant will use $4.9 million redirected from a Microsoft development incentive to reduce property taxes starting with the next tax bill, according to a Monday, Sept. 28 joint announcement from the village, Microsoft and the Racine County Economic Development Corporation.

Under a 2023 agreement, Mount Pleasant offered Microsoft up to $5 million a year once its data center developments created enough property value. Microsoft has now reached that threshold and is eligible for the payment, but the company is redirecting the money instead, citing its Community-First AI Infrastructure Initiative, under which it has said it will forgo local property tax incentives.

Of the total, $100,000 will go to the Racine County Economic Development Corporation for countywide economic development work, and the remaining $4.9 million will go to the village.

Village President David DeGroot said the funds will help reduce the tax levy starting in 2027 and cover capital costs, such as road work or police and fire vehicles, without the village needing to borrow money. Village staff plan to include proposals for the funding in the 2027 budget, set for release in October, with final decisions made by the Village Board.

Microsoft completed its first Mount Pleasant data center in summer 2026, with a second under construction and preliminary plans approved for two more campuses.