Conference Underscores Revenue Sharing

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Conference Was Feb 8, 2002, in Milwaukee
Studies Underscore Revenue Sharing's Importance

MILWAUKEE — State and regional programs are crucial to providing a level playing field for both rich and poor communities in their efforts to provide basic government services and create jobs, an all-day conference at Marquette University was told.

The Wisconsin Metropatterns study advocated tax base sharing as a partial — not a complete — remedy to inequality between property-poor and property-wealth communities. And a yet-to-be-published report by The Brookings Institution reached the same conclusion.

"Only the states can ensure that each local jurisdiction is able to provide basic services at a competitive tax rate," said the draft of the Brookings study.

Regional tax-base sharing, cooperative planning and regional governance that builds on existing mechanisms can help solve the problems of poverty, sprawl and inadequate tax base in Wisconsin communities, Wisconsin Metropatterns concluded.

With the future of shared revenue in doubt, daily media coverage focused on shared revenue. See the Milwaukee Journal Sentinel story here. Columnist Whitney Gould followed up with a column about how development on the urban fringe hurts inner-ring suburbs as well as central cities. See her column here.

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Sprawl is one of the forces examined in
Wisconsin Metropatterns

Comparing the ability of taxpayers to pay their taxes, Wisconsin Metropatterns found that residents of the towns of Grand Chute and Algoma have twice the capacity to finance government services as residents of the neighboring cities of Appleton and Oshkosh. See that map here.

Inefficient growth — or sprawl — not only gobbles up open space, it inflates state and local budgets, the 44-page study found.

The study, unveiled at a daylong conference at Marquette University Feb. 8, was financed by a Joyce Foundation grant to Wisconsin Sustainable Cities Inc.

To combat increasing social separation in our communities and curb wasteful sprawl, the report says we need:

Greater fiscal equity to equalize resources among local governments.

Smarter land-use planning to support more sustainable development practices.

A coordinated regional economic development strategy to make entire metropolitan areas more competitive.

Accountable metropolitan governance to give all communities a voice in regional decision-making.

Among key findings:

Regional tax-base sharing provides a viable option for local areas left to their own devices by budget decisions made by the state.

Wisconsin’s regional economies stand to gain from cooperative economic development strategies of the sort encouraged by tax-base sharing and regional land-use policies.

Land currently is being converted to urban uses much more quickly than population is growing in nearly all the regions studied, heaping economic and environmental costs on residents.

The state aid system’s ability to equalize tax burdens among rich communities and poor communities clearly declined between 1993 and 1999.

Tax-base sharing cannot replace state aid entirely. It cannot ensure that all places are capable of providing some minimum standard level of services.

Affordable housing is an essential component of smart growth planning because it helps to reduce the stress on core communities and the consequences of concentrated poverty.

Overall, the current system of regional governance in Wisconsin is fragmented, with powers divided among different actors who have no incentive to provide strong oversight.

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Milwaukee Street Scene

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Downtown Neenah

Among regional findings:

In the Madison area, both the central cities and high-growth suburban communities are feeling fiscal stress.

Patterns of inequality in the Milwaukee area are hardening over time, with inner-ring suburbs facing the greatest decline in taxpayers’ capacity to finance government. See the map here.

More than 40% of the workers in the Fox Valley live in one community and work in another.

The pattern of racial and income segregation in the Green Bay area is accelerating.

Almost one in five Rock County workers commute to another county to work.

Around Eau Claire, the city contains much of the region’s wealth, and poverty is mainly in the countryside.

The Superior area has an overall pupil poverty rate of 31%, which along with Milwaukee is the highest among the seven metropolitan areas studied.

Based in Chicago with assets of $800 million, the Joyce Foundation has been a long-time funder of efforts to protect the natural environment of the Great Lakes. It supports groups working to improve public policies in air and water quality, agriculture, energy, transportation and land use. Other program areas are education, employment, gun violence prevention, money and politics, and culture.

Wisconsin Sustainable Cities partnered with the Intergovernmental Cooperation Council of Milwaukee County, 1000 Friends of Wisconsin, Citizens for a Better Environment and the Greater Milwaukee Committee in overseeing the study and sponsoring the conference.

For the full Metropatterns report, please go to the Metropolitan Area Research Corp. website and download the large (12.9 mb) file here. Last we checked, there was a bug in the website that allowed us to download the file using Internet Explorer, but not Netscape.