Capitol Commentary
James L. Palmer, II
WPPA Legislative Lobbyist
Doyle Proposes 2005-2007 State Budget
Despite a state deficit of at least $1.6 billion, Governor Doyle recently proposed a state budget that does not cut aids to local governments, increases funding for the public school system by $850 million, in addition to increasing funding for the University of Wisconsin System. This is accomplished in large part by borrowing hundreds of millions of dollars from segregated funds which are supposed to be used for the specific purposes for which they were created. These funds include the Transportation Fund, the Patients Compensation Fund, and the Unemployment Compensation Fund. Needless to say, the Republican majority in the state legislature has not responded kindly to the notion of borrowing money from these funds in order to have future generations of Wisconsinites pay for all of this.
In response to criticism that he has not done much to address the issue of increasing property taxes in Wisconsin, Governor Doyle’s budget also proposes a two-year property tax freeze, a plan which the Governor argues will hold the line on property taxes without hurting public education. The Governor’s freeze is projected to save the average property taxpayer $2 over the next two years. Not to be outdone, Republican legislators have proposed, and passed, a property tax freeze designed to save the taxpayer $11 over the next two years. Governor Doyle has promised a veto. This contentious debate will continue for the next several months, as the Legislature’s Joint Committee on Finance reworks the state budget before sending it to the governor’s desk for his approval.
Serious issues demand serious leadership. For several years, Wisconsin lawmakers have publicly acknowledged the need for government to be less expensive and more efficient in delivering services to its citizens. Despite the fact that numerous governors, including the current one, have appointed study groups to explore this complex subject, nothing substantive has been accomplished. A reasonable person might think that the state’s $1.6 billion deficit would provide a good opportunity to implement some changes to achieve these goals. The fact that the current state budget debate in Madison appears to be about which side has the better short-term property tax freeze is disappointing, to say the least.
Frustrated by this lack of progress, and by the manner in which the state’s law enforcement community is politicized during tough economic times, the Wisconsin Professional Police Association has spent the last year working on a way to reform how the state distributes aid to local governments. We gathered input from the Wisconsin Alliance of Cities, the League of Wisconsin Municipalities, the Wisconsin Counties Association, the Wisconsin Towns Association, the Doyle Administration, and others, in an attempt to formulate a long-term plan that would address the property tax crisis in this state without devastating essential local government services.
Under the WPPA plan:
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State aid to local governments would be used to reimburse municipalities on what they spend for public safety services and economic development efforts, ensuring that Wisconsin’s local governments can keep their residents safe, create jobs, and grow their economies. Targeting state aids in this manner improves the level of transparency and accountability in the local budget-making process. Taxpayers would have a much better idea of where their tax dollars go than they do today.
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Aid amounts would be equalized for property tax wealth, so that communities with lower property values would receive more aid.
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Aid amounts would be adjusted for impoverished communities. Property tax wealth is only one economic indicator. The fact is that people pay their property taxes with their incomes. The WPPA plan recognizes that municipalities with low per-person incomes generally need more services.
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The state would provide strong financial incentives for municipalities to consolidate services in a way that doesn’t impair a local government’s ability to decide which services it will consolidate, or with whom. By encouraging governments to become more efficient, property taxes will decrease substantially all across Wisconsin.
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The WPPA plan won’t cost anymore than what the state already spends on aids to local governments, and it doesn’t require any new money. It doesn’t affect public utility aids, local road aids, or expenditure restraint aids.
Unfortunately, any discussion of government reform inevitably leads one to ask about winners and losers, that is, those municipalities that will receive more money versus those that will receive less. From a purely financial point of view, the WPPA plan does, in fact, have winners and losers. From a public policy point of view, however, all of Wisconsin’s residents would truly win out. The WPPA plan is a long-term approach that addresses Wisconsin’s property tax crisis, encourages consolidation of governmental services, and promotes public safety and economic development in a way that a short-term property tax freeze simply cannot.
As of the deadline for this article, the WPPA’s efforts to reform shared revenue have received favorable media coverage from the Wisconsin State Journal, the Wausau Daily Herald, the Marshfield News Tribune, the La Crosse Tribune, the Wisconsin Rapids Tribune, and Wispolitics.com. We will keep you updated of our efforts as the budget moves its way through the legislative process.
Given the state’s current fiscal environment and the public’s discontent over increasing property taxes, lawmakers have an opportunity in this state budget to do something truly innovative and meaningful. Unfortunately, the WPPA plan can’t be neatly explained in a sound-byte, on a bumper-sticker, or even in an editorial, for that matter. Nonetheless, the WPPA plan is a serious reform that deserves serious consideration. More importantly, Wisconsinites deserve a debate that is more about long-term solutions and less about political gamesmanship.
