May 6, 2002 e-newsletter
May 6, 2002 e-newsletter
| In this issue: | |
| Aerial views document sprawl | |
| McCallum & the Media II | |
Levy Limits on Horizon?
To date in the budget-repair debate, we've focused on shared revenue cuts. But the possibility of levy limits exists, and we're watching the situation closely. Rumor had it that the Republicans bottom-lined levy limits (undefined) and that the Senate might trade levy limits to save shared revenues. The rumor wasn't true, but it underscores that levy limits are on the table.
The problems with levy limits or tax rate limits, as enumerated by the League of Wisconsin Municipalities in a recent memo, is that:
In addition, the governor's rationale for levy limits is no longer even arguably valid. Gov. Scott McCallum sought levy limits to prevent local governments (the "big spenders") that lost substantial sums as a result of the elimination of shared revenues from making up for the loss through the property tax.
The only sure thing about the state budget as this item is being written is that McCallum's plan is dead. As the League put it,"Shared revenue may be nicked by the time this process is completed but it won't be eliminated or cut to the degree originally proposed by the governor."
Conference Committee Eyes Ag-Use Fix
When the budget deficit conference committee met April 30, conferees talked extensively about agricultural use assessment. The Senate version of the budget contains a proposal by Sen. Russ Decker (D-Schofield) to simplify administration of the property-tax break and make sure that farmers, not developers, enjoy the benefit. The Alliance supports the change.According to assessors, the current penalty for converting land from ag to another classification is not being enforced because it is controversial, complex and not timely. Developers are benefiting at the expense of the remaining property taxpayers.
Ag-use values are tied to the value of corn, calculated at the federal level. Corn values decreased by 40% this year, causing huge swings in the tax base available to many small and rural communities.
There's a considerable amount of anecdotal evidence that, rather than provide lasting protection for farmland, current law merely allows developers to hold land for future development at a reduced cost. Wisconsin lost 1.7 million acres of farmland in a 10-year period, the U.S. Census of Agriculture found.
Numbers from some of Wisconsin's largest counties:
Farmland Acres |
||||
County |
1987 |
1997 |
% change |
|
BROWN |
222,717 |
195,966 |
-12.0% |
|
DANE |
569,937 |
512,971 |
-10.0% |
|
EAU CLAIRE |
215,964 |
191,367 |
-11.4% |
|
FOND DU LAC |
358,960 |
324,893 |
-9.5% |
|
JEFFERSON |
256,282 |
242,301 |
-5.5% |
|
KENOSHA |
100,678 |
84,744 |
-15.8% |
|
LA CROSSE |
193,262 |
169,543 |
-12.3% |
|
MANITOWOC |
276,805 |
244,864 |
-11.5% |
|
MARATHON |
581,585 |
515,888 |
-11.3% |
|
OUTAGAMIE |
281,526 |
252,471 |
-10.3% |
|
OZAUKEE |
85,201 |
69,930 |
-17.9% |
|
PORTAGE |
281,891 |
262,799 |
-6.8% |
|
RACINE |
133,167 |
123,012 |
-7.6% |
|
ROCK |
357,751 |
351,013 |
-1.9% |
|
ST CROIX |
334,028 |
312,076 |
-6.6% |
|
SHEBOYGAN |
209,508 |
182,460 |
-12.9% |
|
WALWORTH |
238,787 |
220,089 |
-7.8% |
|
WASHINGTON |
156,317 |
127,127 |
-18.7% |
|
WAUKESHA |
126,734 |
105,608 |
-16.7% |
|
WINNEBAGO |
190,226 |
167,459 |
-12.0% |
|
72 COUNTIES |
16,606,567 |
14,900,205 |
-10.3% |
|
|
Development Subsidies Where Does the State Money Go? States should provide citizens with detailed information not only on how economic development resources are allocated, but where they are allocated, Robert Puentes and Myron Orfield argue in Valuing America's First Suburbs: A Policy Agenda for Older Suburbs in the Midwest, published by The Brookings Institution last month. Last year, North Carolina became the ninth state to require annual disclosure of some economic development subsidies and other investments. Other examples of disclosure: Minnesota tracks economic development grants, loans and tax incremental financing. According to one study, a far-flung Twin Cities suburb, Anoka, has attracted 29 companies from elsewhere in the metropolitan area with the lure of more than $7.5 million in "free" land. One consequence: before the relocations, more than two-thirds of the jobs involved were accessible with public transit; now they are not transit-accessible in Anoka, according to the Institute on Taxation and Economic Policy, based in Washington DC. To see its study, based on information disclosed in Minnesota, look here. "Currently, it is easier (because of federal law) to discover where private banks lend than where public transportation bureaucracies spend," Puentes and Orfield wrote. For Puentes and Orfield's Brookings study, look here. |
Anatomy of Budget Crisis
Last year, Governing magazine gave Wisconsin a B- overall in its annual performance report card for the 50 states. The state's grade was C+ in financial management. 2002's ratings are not yet out.
The magazine last year shrugged off the deficit spending that has become a fact of life in Wisconsin.
"Wisconsin is required by law to balance its budget, but under generally accepted accounting principles, it has been running a deficit for years," Governing magazine said. "On the other hand, investment management practices here are among the best in the country."
For the record, under generally accepted accounting principles, or GAAP, Wisconsin has experienced general fund budget deficits since 1990. In human terms, these deficits result from a lack of political will to match Wisconsin's spending appetite to a tax capacity that the Legislature has repeatedly reduced.
The record:
Year |
GAAP-basis deficit |
|
| 1995 | $1.1 billion | |
| 1996 | $918 million | |
| 1997 | $1.47 billion | |
| 1998 | $1.27 billion | |
| 1999 | $908.7 million | |
| 2000 | $830.3 million |
'T' Word Taboo Elsewhere Too
The 50 states are facing an aggregate budget deficit estimated at $27 billion, but few lawmakers nationwide are suggesting an election-year tax increase, Jason White wrote on the stateline.org website April 30.“Neither party wants to be caught using the 'T' word. And so they would prefer to cut,” University of North Carolina professor Thad Beyle, an expert on state and local politics, told the news service.
For White's story, look here.
An exception is Illinois.On April 24, the Chicago Tribune's Springfield
Bureau produced a story about top Republican and Democratic leaders supporting a variety
of tax increases to plug a $1.2 billion deficit.
Illinois Senate Republicans suggested a 22-cents-a-pack hike in cigarette taxes, $150
million in new taxes for riverboat casino owners and another $225 million revenue boost by
rejecting some of the federal government's recent corporate tax breaks.
Illinois Democrats said the corporate tax measure would provide an estimated $240 million to help fill a $1.2 billion state budget shortfall. City governments, school districts, fire districts and other local bodies would lose another $120 million if the state embraced the federal government's plan, they said.
"We need the wherewithal it takes to meet essential services," said Illinois House Majority Leader Barbara Flynn Currie (D-Chicago). "We need to provide a safety net for fragile and vulnerable populations. And we need to respect our local governments."
David Broder
Suburbs seen as political battlefield
| Myron Orfield not only maps the social and economic trends of the
nation's largest metropolitan areas in his new book, American
Metropolitics, he also charts political
trends, columnist David Broder said in his May 1 column. Broder was fascinated by Orfield's finding that state legislative seats in the suburbs of the 25 largest metro areas are split 50-50 between Republicans and Democrats, contrary to conventional wisdom that the Republicans control the suburbs nationwide. These suburbs "have no permanent allegiance to Republicans or Democrats, and in
Minnesota they were largely responsible for the 1998 victory of Gov. Jesse Ventura,"
Broder wrote. "Orfield says, and I think proves, that the party that can win both the
at-risk suburbs and the bedroom-developing communities 'will control legislatures, |
 |
For Broder's May 1 column, look here. For information on Orfield's new book, look here.
Suburban Sprawl ln Wisconsin...
|
|
...from a 1999 analysis of imaging techniques, "Comparison of Visual Change Detection Methods in Assessing Urban Sprawl in Middleton, Wisconsin, between 1986 and 1995," by David Helmers.
GOP sees McCallum as most vulnerable governor
Gov. Scott McCallum is the most vulnerable Republican governor in the country, Clinton Key, executive director of the Republican Governors Association, told New York Times reporter Richard L. Berke.
Among Berke's observations in his April 29 story: "Mr McCallum, 51, who is most animated when chatting about coaching his children's sports teams, never established much of a political identity of his own."
Local officials throughout Wisconsin might beg to differ, on grounds that McCallum established a political identity on Jan. 22 when he proposed eliminating the state's 90-year-old tradition of revenue sharing with local governments, and dubbed local officials "big spenders."
To see the New York Times story, go here. (if you're not already a user of the NYT web site, you'll have to register, but it's free.)
How Shared Revenue Fight Plays Out
We'll fill in the blanks as the process continues.
| 2002 | 2003 | 2004 | ||
| Current Law | $1,029.4 | $1,039.7 | $1,039.7 | |
| Governor | 679.4 | 679.4 | 0.0 | |
| Joint Finance* | 1,029.4 | 750.0 | 515.0 | |
| Assembly* | 1,029.4 | 750.0 |
515.0 | |
| Senate | 1,029.4 | 1,039.7 | 1,039.7 | |
| Conference Committee | __________ | __________ | __________ | |
| Governor's vetoes | __________ | __________ | __________ | |
(in millions of
dollars) |
||||
