May 23, 2000

Town Meeting at UW-Green Bay

Dr. Donald F. Kettl and the Kettl Commissioners:

I wish to thank the Kettl Commission for holding this town meeting and giving the general public the opportunity to address the function and funding of local governments in Wisconsin. The Governor has given the Commission a very large agenda: "Don't come back with status quo. I want everything looked at." He wants the commission to examine local governments' functions and size, how they consolidate and how the state funds public schools, according to an April 14 article by the Associated Press.

Radical structural changes certainly could be suggested. Wholesale consolidation of counties, towns, cities, villages and school districts could be done in Wisconsin. Imagine, for a moment, a community with one elected body that would cover the entire 6th Congressional District. The 6th CD currently touches 12 separate counties, hundreds of cities, villages and towns and numerous school districts. It is conceivable that we could investigate the possibility of consolidating all these units into one local government - creating one regional district community.

Such an entity has much merit. Property tax rates would be stabilized over the entire region - those who live in Menasha would pay the same tax rate as those who live in Manitowoc, Picket, Green Lake or the Town of Algoma. The competition for lower tax rates at the expense of our neighbors would become a thing of the past.

A regional district entity would also allow for better economic development - bringing more resources for industrial parks and supporting infrastructure. Design standards would be uniform across the entire region - simplifying the development process for developers and builders.

Public services could become much more efficient. We could maximize the utilization of our resources by eliminating much of the duplication between our communities and our

Ostensibly, urban sprawl would be curtailed. Regional plans would become the guiding force for the district - requiring in-fill before new lands are opened up for development. Competition between local entities for development would become irrelevant - we all would benefit by the development - enhancing every one's quality of life and enhancing everyone's tax base. All of these changes would reduce the need for state government and shared revenues.

These ideas, of course, are very broad and sweeping -- probably requiring changes to the state constitution -- the very blueprint far Wisconsin's local government that we know today. Perhaps it is within the scope of the commission to recommend a State Constitutional Convention - giving everyone the opportunity to rewrite how we interact and function as local units of govemment.

Such broad sweeping changes are certainly interesting and merited; however, these changes are very political and would take huge political efforts to implement.

Whatever the Kettl Commission recommends, tax equity issues should be at the forefront of the new offered solution. In 1969 the Tarr Task Force identified tax rate disparities between the different communities in Wisconsin. Approximately 133 communities had property tax rates below $20 per $ 1,000 of value while 124 had property tax rates that exceeded $35 per $1,000 of value. After implementing the shared revenue formula and school aid formula, only 18 communities had property tax rates above $35 per $1,000 of value while 87 still had property tax rates below $20 per $ 1 ,000 of value.

Some parts of Wisconsin are economic hot spots - the local economy is doing very well for them. Typically, the region supports these economic hot spots but only one community often benefits by them. For example, the Town of Grand Chute benefits tremendously from the entire Fox River Valley and beyond. They have commercial property that is gravitating to their community like crazy and the entire region shops at the commercial centers to support them.

Grand Chute derives the lion's share of this economic benefit. Only through shared revenue does Menasha receive some economic benefit from the activity in Grand Chute.

If the state were to eliminate shared revenues and replace it with a local sales tax option, Grand Chute would eliminate the property tax entirely from all business and residential structures. By using the sales tax, Grand Chute would be able to export more of their tax burden to the region.

Some have suggested providing local option taxes as a replacement for shared revenues. If this occurs, communities across the state will seek new ways to export their tax burden to the surrounding region. If the state limits the type and nature of local option taxes, the state will simply create losers and winners - allowing some communities to export their tax burden and others not.

This is the heart of the problem associated with tax islands and is, in part, what the Tarr Task Force was attempting to dampen through the shared revenue program. As the Kettl Commission continues to deliberate new methods to fund local government, I hope you keep tax equity at the forefront of your proposals. In addition, please be cautious about new alternative tax methods - they might lead to new ways to export local tax burden at the expense of other taxpayers in the region. Thank you.

Best Regards,

Joseph F. Laux

Mayor

CC: Common Council