The Kettl Commission plan was presented Wednesday by commissioner Mark Bugher, former secretary of the state Department of Administration and the Department of Revenue.

A key element of the plan would fund public schools 100 percent by retaining the nearly $1 billion in state-shared revenues currently sent to local municipalities.

Bugher said the rest of the estimated $2.5 billion additional funding for schools would come from closing some tax loopholes and having the state retain the school levy credit currently sent to districts.

The state currently funds two-thirds overall of all public school costs, although the exact rate varies from district to district based on various economic factors.

Bugher said the net effect would mean a major decrease in property taxes but a likely increase in the state sales tax.

"Unless we are willing to tackle the issue of the fundamental ways to fund schools in Wisconsin, all the rest of the things we may do will be for naught," Bugher said.

Immediate questions being asked are whether teachers would then become state employees who would be able to participate in contract mediation-arbitration. Teachers had such rights prior to 1993, when the state assumed the two-thirds funding and capped local spending and teacher salary increases.

Some commissioners wondered if the pay for teachers would be standardized throughout the state.

The other major question concerned the function of local school boards if the state were to control all funding.

Waukesha School District Superintendent David Schmidt said how well his district would fare under the proposal would depend on the funding level the state would set.

"We probably aren’t going to lose," Schmidt said.

Losing local control?

The state currently has set in place a mechanism forcing teachers to accept a qualified economic offer of a combined 3.8 percent annual raise in wages and benefits. Schmidt said the proposal would create turmoil if it eliminated the QEO law but retained district revenue spending limits.

"I think the 100 percent funding will help reduce tension in communities as it relates to property taxes," Schmidt said. "My only concern at this point is what strings will be attached to that and what will the state control?"

George Lightbourne, secretary of the Wisconsin Department of Administration and a commission member, said the state will try to develop some cost estimates on Bugher’s plan and present them at the commission meeting Nov. 2 in Stevens Point.

Todd Berry, executive director of the Wisconsin Taxpayers Alliance, said the proposals amounted to a state takeover of local government.

"We’re removing people from their local government," Berry said. "I have a major philosophical concern with the commission trying to kill local government."

State Sen. Margaret Farrow, a City of Pewaukee Republican, said such radical thinking is exactly what Gov. Tommy Thompson was looking for when he appointed the 32-member commission earlier this year.

"We’re out of the box here and that’s good," Farrow said.

Milwaukee questions plan

But Bugher’s plan set off an immediate alarm with David Riemer, a spokesman for the city of Milwaukee.

He said the state’s largest city would have to nearly double its tax rate to make up for the loss of state-shared revenues, even if the school costs were taken care of.

"What are we to tell the black and Hispanic in our city who (would be) paying a tax rate three or four times that of suburban, all-white communities?" Riemer said. "If you take all the shared revenues, it will produce horrible results. It will create an impasse worse than that which led to the commission."

Bugher said the likely compromise would include some formula for revenues to continue for large cities and rural communities.

Providing services

The commission has also been discussing whether to recommend the state allow local municipalities to have a local gasoline tax for each county or other municipal taxing authority for local costs.

The commission has also been focusing on a plan to guarantee a minimal level of government services everywhere in the state, called "Badger basics."

Hartland Village Administrator Wally Thiel noted many small communities would be hard pressed by losing state shared revenues because they rely on state funds to provide basic, state-mandated services.

"It would also be difficult to approach (local) economic development in that context," commissioner Thiel said.