Ed's Second Paper to Kettl on Tax-Base Sharing

City Manager Jane Wood on Local Govt. Institute

By Rich Eggleston

UW political scientist Don Kettl, chair of the Blue Ribbon Commission on the State-Local Partnership for the 21st Century, has described the partnership as a candidate for "Relationship Rescue" on the Oprah program.

But a plan by former State Revenue Secretary Mark Bugher to the Kettl Commission Oct. 11 amounted to a petition for divorce.

Bugher proposed eliminating the state shared revenue program, folding that billion dollars into school aids, and adding new state revenues -- including a state tax on all Internet transactions -- until schools are 100% state funded, and leaving leaving cities, towns and villages entirely dependent on property taxes and a new local-option sales tax.

Other commission members called the Bugher plan anti-local government and said the plan, if implemented, would ruin Wisconsin's economy.

Beloit City Manager Jane Wood, one commission manager, penned an eloquent response to Bugher that you can see by clicking here.

First out of the gate with news coverage of the Bugher plan was Dennis A. Shook of the Waukesha Freeman. To see Dennis' story, click here. Dennis Chaptman of the Milwaukee Journal Sentinel followed up with a story you can see here. (Come back from Chaptman's story by closing the new window that opens in your browser..)

In contrast, commission member David Riemer, the City of Milwaukee's director of administration, proposed a municipal foundation plan that would provide every city, town and village with a per-capita base of funding from property taxes and state aids, and a school financing package that gives money to parents to fund the individual schools their children attend, not the school system. Details are being sketched out.

UW political scientist Don Kettl, chair whose Commission on State-Local Partnership for the 21st Century has local officials across Wisconsin on pins and needles, told a Partners in Local Government meeting Oct. 12 that he plans to have enough of the commission's work done by Thanksgiving to send initial drafting instructions to the Department of Administration.

He said school financing, human services, criminal justice and the municipal "basket of services" are on the agenda for the next Kettl Commission meeting Nov. 2 at UW Stevens Point, and a Nov. 16 commission meeting in Janesville is expected to "nail those things down."

Kettl noted that the Bugher plan to eliminate shared revenues and fund 100% of school costs was not well received by commission members.

"The implication of the Bugher plan would undeniably be a property tax increase for municipalities that would be more than matched" by reductions in school property taxes, Kettl said. The reason, he said, was the increased sales tax revenue that would be funneled to schools.

"It's fair to say (the Bugher plan) didn't get a rousing response," he said. But others at the Partners meeting noted that Department of Administration Secretary George Lightbourne, a commission member, said his agency will look at full funding of schools regardless of the commission's recommendations.

A staffer for the Wisconsin Counties Association said she found one of Bugher's remarks to the commission in particularly bad taste.

"He said local governments are always quibbling over the shared revenue formula, complaining they aren't getting enough shared revenue, so if we eliminate shared revenue, we won't have to listen to those complaints," she said. "I found that really offensive."

But Kettl noted that the commission discussion immediately returned to a discussion of equalization.

Kettl again emphasized the importance of the state-local partnership, saying it's crucial to economic development and the success of all levels of government in an era in which tax increases aren't an alternative.

"We have two alternatives," he said. "One: Increase governmental productivity. Two: grow the economy."

On other subjects, Kettl said:

• A state property tax is "another study for another day."
• The Kettl Commission has not talked much about property tax exemptions, and likely will run out of time before they can be discussed.
• Intergovernmental cooperation is going to happen.

"You can either continue to sue each other, or we'll have incentives for you to work together," he said.

Alliance-DNR Meeting

Ed and Gail met Oct. 4 with DNR Secretary George Meyer; Paul Heinen, policy advisor; Craig Karr, administrator, Division of Customer Assistance and External Relations; Jay Hochmuth, administrator, Division of Air and Waste; and Bruce Baker, deputy administrator, Division of Water.

On the issues:

• TMDL – Agreed that the watershed approach is logical. Bruce Baker said that because of congressional pressure the EPA has delayed implementation of the rule until at least October of 2001. He mentioned that the DNR was likely to work on emissions from sources for which they have existing data and for "areas of concern." As to trading between point dischargers and non-point dischargers, Bruce mentioned that EPA Region 5 was less flexible on the issue than the Washington, D.C. office. DNR is planning on demonstrating the benefits of trading to EPA Region 5.
  Streetsweepers – Ed asked whether the DNR would be willing to buy necessary streetsweepers for municipalities to meet the stormwater mandate. They thought acquisition would be considered a bondable capitol expense and that they were interested and would look into it. In a follow-up conversation, DNR staff informed us it is not bondable.
• Recycling – Secretary Meyer was very open to the idea of moving solid waste costs to a fee. The DNR budget request funds the recycling program at $24.2 million through a $1.85 per ton tipping fee, up from the current $0.30 per ton. Secretary Meyer has said that if the state mandates recycling then it should pay for the service. However, Ed said a tipping fee at that level would not be supported by the Alliance. As you recall, there is no support in the legislature to repeal the mandate.
• High Capacity Well - The DNR will introduce a bill to minimize the transaction cost for new high capacity wells. Ed expressed concern that municipalities would be displaced as a priority for permitting high capacity wells. He suggested they call Fond du Lac because of the concerns City Manager Nenonen had with a similar proposal.
• Permitting – Since Kettl is looking at economic development on a regional basis, Ed suggested that DNR consider delegating their industrial permitting authority to cities, as is done in Germany. Secretary Meyer thought EPA might agree to the idea on a pilot basis under the cooperative innovation agreement that EPA has with Wisconsin.
• Brownfields – We told them we support their efforts to establish funding for clean up of sites that will become green space or only have minimal direct economic impact. DNR staff and Commerce staff are meeting to discuss the issue.
• NR 216 – The comment period has ended. Staff is compiling comments and will likely send the rule to the legislature next spring. They did mention the conflict between the DNR and the WisDOT, but emphasized that if the WisDOT is exempted, an additional burden would fall on municipalities and the agricultural community.
• Ozone non-attainment areas – Bruce Baker said staff is compiling comments from the public input period and will be revising the rule as appropriate.
• Smart Growth – DNR staff are wondering if you will be seeking their expertise and if so how they can best contribute during local government planning processes. They have no idea what will be requested of them and they would like to have as much lead time as possible so they are not inundated by requests from a number of local governments during a short time period.

Ed met Oct. 12 with an organization called Wisdom. Wisdom consists of 90 church congregations in Racine, Kenosha, Milwaukee and Waukesha Counties. Its mission is to seek justice and the common good in southeastern Wisconsin.

Specifically:

• To expand the power base of each affiliate organization through creation of a regional faith-based organization.
• To identify potential leaders among member organizations for training on regional issue development and related action strategies.
• To engage member organization in regional expansion goals and regional issues campaigns, such as education funding, transportation funding equity, and urban-suburban funding equity.
• To address economic, racial, and social disparities that exist throughout the region.
• To increase capacity for grassroots leadership to bring among systemic change through on going training and fundraising.
• To utilize the advisory capacity of business leaders, judicatories, funders and political officials.

Ed and Rich attended the AFSCME PEOPLE Convention in Appleton on October 5^th and 6^th. Ed spoke to the convention on Friday and Rich provided a workshop on state shared revenues on Saturday. On Friday, Senator Chuck Chvala followed Professor Don Kettl to the podium and promised to seek $20 million additional for the shared revenue program.

Ed and Rich are working with the Energy Lifeline Coalition on the public relations front. The Citizens Utility Board (CUB) is promoting a new alternative for the Duluth-Wausau power line. It is not a real proposal. Although Ed has a meeting with CUB on his calendar to learn more, the proposal must be submitted to the Public Service Commission by an energy provider to be a real proposal. Any change in position now would play into the opposition’s hands.

City Leaders have received a bill draft that would change the relationship between cities and towns and counties if cities and towns agree.

The bill agreed upon by the executive directors of the League of Wisconsin Municipalities, Alliance of Cities and Towns Association will be taken up at the annual conferences of the towns and the League this month. If agreed upon, we will jointly take the bill to the Legislature and the Governor.

Without fanfare, Gov. Tommy Thompson on Sept. 19 issued an executive order directed executive branch agencies to develop "outstanding" Internet services and "work with local governments and school districts throughout the state to provide convenient and reliable access to the widest possible range of public services.

Executive Order 408 directs the Department of Administration to create an Internet-based "service center" that will expand eventually to include "the widest possible range of state and local government programs." The effort, described by staff as a "fast-track e-government initiative,"  was formally announced Sept. 27.

In an internal e-memorandum, Linda Seemeyer of DOA told staff that DOA has created a team that will be the forerunner of a new Office of Electronic Government. The memo sheds no light on what local governmental role in the project is anticipated.

Gail and Ed have started to meet with members of the Legislature regarding the Alliance Agenda. We are concentrating on legislators without opponents and those senators not up for re-election.

Upcoming Events

        Oct. 17                         Environmental Management Systems Roundtable
        Oct. 19                         Ed presents Alliance award to Sen. Brian Burke
Oct. 19                         Farmland Advisory Council - use values for 2001
        Oct. 20                         Coalition for Common Good (takings coalition)
        Oct. 23                         Gail meets with Rep. Ladwig re: juvenile driver's license suspensions
        Oct. 24                         Leg. Council Navigable Waters Committee
        Nov. 2                          Kettl Commission, UW-Stevens Point
Nov. 16                        Kettl Commission, Janesville
        Nov. 17                        Alliance of Cities meeting, Janesville

THE WISCONSIN ALLIANCE OF CITIES
14 West Mifflin Street Suite 206
Madison, Wisconsin 53703