Trade tax 'freeze' for lasting solution
Posted: Tue Aug 12, 2003 10:55 am
For those of you not from Wisconsin, here's a brief description of what's been happening:
- Jim Doyle, a Democrat, gets elected governor, the first in a *long* time. At the same time, both the house and senate fall into Republican hands.
- Doyle promises to stand by him campaign pledge of no new taxes.
- Budget crunches all around. State aid to local municipalities is reduced. In a political move, Republicans pass the budget with a "property tax freeze", which limits the ability of local municipalities to raise property taxes. Doyle promises to veto any such freeze. He does.
- Republicans claim that Doyle is hurting taxpayers and vow to override his veto.
That pretty much brings us to this:
Trade tax 'freeze' for lasting solution
6:54 PM 8/11/03
Today's property tax "freeze" vote will accomplish some good - as long as the plan fails. That's because the threat of a new tax cap has compelled some lawmakers and local officials to scramble for more honest and long-term ways to relieve local tax burdens.
The fake freeze itself, vetoed by the governor and scheduled for an override vote today in the state Senate, will accomplish little of lasting good but cause plenty of short-term harm:
* An arbitrary cap only locks in bad budgeting practices and priorities, ensuring that you get less, not more, for your taxpayer dollar.
* A temporary cap doesn't reform flawed state-local revenue sharing, which is at the heart of Wisconsin's high-tax troubles.
* Most maddening, the cap doesn't actually freeze taxes: While Gov. Jim Doyle's budget may lead to as much as $1 billion over two years in new property taxes, the "freeze" would allow property taxes to go up by nearly $400 million. And when the cap expires after three years, it's back to business as usual.
Lawmakers who want to solve state and local budgeting problems for the long term should re-examine more effective - but more complicated - long-term solutions. In one heartening first step, Sen. Jeff Plale, D-South Milwaukee, who has resisted heavy pressure to break with Doyle, floated a plan Monday that includes targeted tax credits for homeowners and renters.
Increasing targeted credits is an old idea worthy of a new look. The Homestead Tax Credit is currently the only way to target individual homeowners and renters for tax relief without running afoul of the state constitution's tax uniformity clause.
As Plale's stance shows, taking a stand against a tax "freeze" doesn't necessarily put opponents in favor of higher property taxes. But his proposal, which is impossible to sum up as a three-word slogan, also hints at the complex challenge Wisconsin faces in trying to limit taxes without sacrificing basic services demanded by taxpayers.
Everyone realizes that our property taxes are too high - the 11th highest in the country, in fact. And when both state and local taxes are considered, a recent study says Wisconsin residents paid $2.4 billion more in 2000 than they would have if their tax burden had been the national average.
But flawed policy, more than spendthrift politicians, is at the root of Wisconsin's tax problems. While local officials like to point out that state spending outstripped local spending hikes during the 1990s, they are less eager to note that they got about 60 percent of the money as state aid meant to create property tax relief. A recent study suggests overreliance on state handouts, which have increased dramatically in the past 10 years, actually encourages higher local spending.
So the Legislature is right to attack both state and local taxation as part of an effort to more closely match the overall tax burden to residents' ability to pay. But the GOP majority is too focused on political strategy and ideology to develop sound fiscal policies, and Doyle has failed to propose a reasonable alternative to the Republican "freeze."
To permanently limit government's reach into our bank accounts, Wisconsin still may want to pursue more logical and flexible local taxation limits - but only if coupled with more effective state aid formulas that reduce these programs' overall costs along with our overall tax burden.
A temporary tax "freeze" solves nothing. That move only enables lawmakers and local officials to keep pointing fingers at each other when taxpayers complain about the increasing costs and diminishing returns of our public services.
- Jim Doyle, a Democrat, gets elected governor, the first in a *long* time. At the same time, both the house and senate fall into Republican hands.
- Doyle promises to stand by him campaign pledge of no new taxes.
- Budget crunches all around. State aid to local municipalities is reduced. In a political move, Republicans pass the budget with a "property tax freeze", which limits the ability of local municipalities to raise property taxes. Doyle promises to veto any such freeze. He does.
- Republicans claim that Doyle is hurting taxpayers and vow to override his veto.
That pretty much brings us to this:
Trade tax 'freeze' for lasting solution
6:54 PM 8/11/03
Today's property tax "freeze" vote will accomplish some good - as long as the plan fails. That's because the threat of a new tax cap has compelled some lawmakers and local officials to scramble for more honest and long-term ways to relieve local tax burdens.
The fake freeze itself, vetoed by the governor and scheduled for an override vote today in the state Senate, will accomplish little of lasting good but cause plenty of short-term harm:
* An arbitrary cap only locks in bad budgeting practices and priorities, ensuring that you get less, not more, for your taxpayer dollar.
* A temporary cap doesn't reform flawed state-local revenue sharing, which is at the heart of Wisconsin's high-tax troubles.
* Most maddening, the cap doesn't actually freeze taxes: While Gov. Jim Doyle's budget may lead to as much as $1 billion over two years in new property taxes, the "freeze" would allow property taxes to go up by nearly $400 million. And when the cap expires after three years, it's back to business as usual.
Lawmakers who want to solve state and local budgeting problems for the long term should re-examine more effective - but more complicated - long-term solutions. In one heartening first step, Sen. Jeff Plale, D-South Milwaukee, who has resisted heavy pressure to break with Doyle, floated a plan Monday that includes targeted tax credits for homeowners and renters.
Increasing targeted credits is an old idea worthy of a new look. The Homestead Tax Credit is currently the only way to target individual homeowners and renters for tax relief without running afoul of the state constitution's tax uniformity clause.
As Plale's stance shows, taking a stand against a tax "freeze" doesn't necessarily put opponents in favor of higher property taxes. But his proposal, which is impossible to sum up as a three-word slogan, also hints at the complex challenge Wisconsin faces in trying to limit taxes without sacrificing basic services demanded by taxpayers.
Everyone realizes that our property taxes are too high - the 11th highest in the country, in fact. And when both state and local taxes are considered, a recent study says Wisconsin residents paid $2.4 billion more in 2000 than they would have if their tax burden had been the national average.
But flawed policy, more than spendthrift politicians, is at the root of Wisconsin's tax problems. While local officials like to point out that state spending outstripped local spending hikes during the 1990s, they are less eager to note that they got about 60 percent of the money as state aid meant to create property tax relief. A recent study suggests overreliance on state handouts, which have increased dramatically in the past 10 years, actually encourages higher local spending.
So the Legislature is right to attack both state and local taxation as part of an effort to more closely match the overall tax burden to residents' ability to pay. But the GOP majority is too focused on political strategy and ideology to develop sound fiscal policies, and Doyle has failed to propose a reasonable alternative to the Republican "freeze."
To permanently limit government's reach into our bank accounts, Wisconsin still may want to pursue more logical and flexible local taxation limits - but only if coupled with more effective state aid formulas that reduce these programs' overall costs along with our overall tax burden.
A temporary tax "freeze" solves nothing. That move only enables lawmakers and local officials to keep pointing fingers at each other when taxpayers complain about the increasing costs and diminishing returns of our public services.