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Nov. 8, 2002 e-newsletter

In this issue:

Election Validates Our Course

State's Budget Woes Grimmer

Alliance Meets Nov. 21-22 in Appleton
(click here to RSVP)

The Myth of Super High Taxes, cont'd

News Briefs

Upcoming Events

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Election Validates Alliance Agenda

Voters sent mixed signals at the polls Nov.5, but one consistent theme was evident: citizens reject what they perceive to be politics as usual.

"I got a very, very strong vote (in Tuesday's election), and it came from all parts of the state," Gov.-elect Jim Doyle told a post-election news conference. "It's very clear what the voters were saying yesterday. They wanted change."

In some cases, voters pinned their hopes for change on Democrats, in some cases on Republicans. Jim Young of the Green Party, Libertarian Ed Thompson and their compatriots further down the ticket were beneficiaries of the same mood.

How to reconcile those different expectations is the challenge that Gov. Doyle and legislators of both parties will face in January.

The Wisconsin Alliance of Cities shares the public's desire for change. Our city leaders have long rejected the status quo, and this fall they endorsed a series of reforms to accomplish that change. Generally, our blueprint for change encourages regional economic development, regional service delivery and regional equity. We see it as the best way to retain our traditional commitment to equalize  tax burdens in communities across the state, whether they are rich or poor.

To see our agenda for 2003-04 click here. And join us in helping build strong communities and strong economies across Wisconsin.

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State's Budget Woes Coming into Focus

News that the Department of Health and Family Services is looking for more than $650 million in additional state funding over the next two years, mostly to operate Medicaid, Badger Care and Senior Care, provided another dark cloud on the state budget horizon Oct. 31.

grimbjt.jpg (30838 bytes)
Wisconsin Counties Assn. dramatizes woes
The agency's biennial budget request seeks a $533 million increase in state money for Medicaid; an increase of $37.4 million for Badger Care, an insurance program for poor families; and $92.4 million for Senior Care, a prescription drug program for older citizens.

"The challenges we face are scary," Rep. Dean Kaufert (R-Neenah) told the Milwaukee Journal Sentinel.

State government was facing a $2.8 billion budget deficit for 2003-05 before the news arrived. 

"I see absolutely no interest by anybody to raise taxes. However, a $2.8 billion deficit already there just can't be made up through cuts," Rep. David Travis (D-Madison) told The Capital Times. "If you put $663 million on top of that, we are in a fiscal crisis beyond imagination."

The October cover of the Wisconsin Counties Association magazine, above, couldn't have been more timely.

"The fiscal outlook for the state of Wisconsin should very well make the hair on the back of your neck stand up more than any of the ghouls and goblins that visit us this time of year," WCA legislative director Craig Thompson wrote in his analysis of the state budget dilemma.

For years, state government has been spending more than it has taken in during any given  two-year budget period. Add to that simultaneous cuts in taxes (see the chart at right) and only a booming economy could sustain the state's budget practices. Of course, the economy stopped booming and the rest is history.

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Source: Prof. Joel Rogers, UW Center on Wis. Strategy

 

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Myth of High Taxes Hard to Kill

By Rich Eggleston

The notion that Wisconsin is a tax hell is a myth, says Prof. Joel Rogers of UW-Madison. It's a myth perpetuated by groups that are supposed to be building our economy, not tearing it down, we might add.

"Wisconsin ranks among the top three states in taxes," says the Wisconsin Realtors Association, one of the groups that supported Gov. Scott McCallum's plan to eliminate state shared revenues.

While Wisconsin is a handyman's special in terms of fiscal policy, it isn't the state's tax climate that got us there. (It also isn't local government, which the Realtors advocated evicerating.)

If you include school taxes and local taxes along with state taxes and don't include any other types of revenue,  Wisconsin does rank third in the nation in taxes per $1,000 of personal income. However, it ranks sixth in per-capita taxes.

But if you include user fees, Wisconsin's rank drops to 11th, both on a per-capita basis and ranked according to personal income.

"In fact, Wisconsin is about average in its state tax burden, at least for a state providing the sorts of services we take for granted here. According to the latest figures from the Census Bureau, we rank 17th among the 50 states in total state taxes," both per-capita and per $1,000 of personal income, said Rogers, who directs the Center on Wisconsin Strategy at UW-Madison.

"Our business taxes —  and it is business on whose behalf the "big tax state" charge is commonly leveled —  are actually below average. We rank 25th among the states in corporate income tax per person, and 28th in corporate income tax per dollar of personal income," Rogers wrote in one of a series of state budget columns in The Capital Times last spring.

To look at another set of rankings, per $1,000 of personal income:

Wisconsin

Ranking

Nat'l Avg

State & local taxes

$127

3rd

$110

State & local "non-tax own-source" revenue

$47

30th

$47

Federal revenue

$34

35th

$37

Total state & local revenue

$208

20th

$194

Total state & local spending

$205

20th

$190

all figures are for FY 1999.
Source: Wisconsin Budget Project)

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News Briefs

By a more than 2-1 margin Nov. 5, voters in the Brown County town of Bellevue approved becoming a village. Voter turnout in the town of more than12,000 people was less than 45%. For the Green Bay Press Gazette story, look here.

An intergovernmental agreement between Fitchburg, the city of Madison and the town of Madison that provides for the eventual assimilation of the town into the two cities was approved by Madison's city council Nov. 5. The vote was 16-4. The three municipalities now must draft a cooperative plan and win state Dept. of Administration approval.

Central Wisconsin  municipalities continue to look for ways to share services, despite assurances they will receive state shared revenue in 2003, the Wisconsin Rapids Daily Tribune reported Oct. 27. In Wisconsin Rapids, city officials are studying projects including shared emergency dispatch services and an emergency water connection with the village of Port Edwards, said Mayor Jerry Bach. See the story here.

The state Dept. of Revenue Nov. 4 issued mandate waiver criteria. John W. Rader, administrator of DOR's division of state and local finance, said in a letter to local officials that the program recognizes the need to adapt the broad policy objectives of the law to changing and potentially unique local circumstances. While DOR will serve as a clearinghouse for waiver requests, individual agencies will generally act on them, he said. To see the criteria, click here. To contact Rader with questions, email him at jrader@dor.state.wi.us.

A pension bill that the Legislature passed in 1999 will cost state and local government a minimum of $5.7 billion in additional retirement contributions over the next 12 years, the Milwaukee Business Journal reported. Milwaukee County Executive Scott Walker, then a Republican lawmaker from Wauwatosa,  was one of 20 representatives who voted against the pension enhancement bill. He told the Business Journal that there were "red flags" aplenty, but the Legislature still passed the bill. See the story here.

Racine Area Manufacturers & Commerce and the Racine Taxpayers Association support a countywide dispatch center and have been lobbying against having two multimillion-dollar law enforcement projects only 10 miles apart, the Milwaukee Journal Sentinel reported Nov. 5. See the story here.

Gov. Scott McCallum "sealed his doom in January with his high-profile, ill-fated budget proposal to kill state revenue sharing,  veteran political analyst Ken Lamke wrote in the Nov. 8 edition of the Madison weekly Isthmus. "It was, substantively and politically, probably the worst single major policy proposal by a Wisconsin governor in at least 40 years," added Lamke, who covered politics for two decades for the old Milwaukee Sentinel before joining the merged Milwaukee Journal Sentinel.

Neither the current shape nor quality of metropolitan growth in America is sustainable, but the philosophy of "smart growth" can make metropolitan solutions work, says a study by the London School of Economics. The study says our metropolitan areas could grow in radically different ways if major governmental policies on land use, infrastructure and taxation were overhauled. See the 32-page study here.

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Upcoming Events
Nov. 12 Local Govt., School Funding Crisis Madison
Nov. 13 Cancelled: Special Session on Ethics
Nov. 13 Public & Private Broadband Cmte. Madison
Nov. 13 Public Health / Terrorism Cmte. Madison
Nov. 14 Wind Energy Symposium UW-Manitowoc Cty.
Nov. 21 Mental Health Parity Committee
Nov. 21-22 Alliance meeting, Appleton
(click on underlined text for more)

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THE WISCONSIN ALLIANCE OF CITIES
14 West Mifflin Street Suite 206
Madison, Wisconsin 53703
(608) 257-5881