Alliance Jan. 10, 2003 newsletter

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Jan. 10, 2003 e-newsletter

In this issue:
Doyle Targets Health Insurance Costs
Freeway Critics Sound Off	Bush Plan Hits Alliance
Smallpox Program Lacks Funds	Ag Tax Break Huge
Budget Myths, cont'd	Lobbying Report
News Briefs	Upcoming Events

Shared Revenues Would Fall
Doyle Eyes Health Insurance Savings

In a pre-inauguration interview, Gov. Jim Doyle said he's looking to shared revenues for help balancing the state budget, with reductions offset at the local level by savings that state government can produce by lowering local governments' health insurance costs.

Doyle said health insurance is the most obvious place that state government can look to produce spending reductions at the local level. He made the statement in a wide-ranging interview with Jeff Mayers, editor of wispolitics.com.

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Wisconsin's New Governor
and First Lady
ŠThe Capital Times

Mayers asked about hints that while shared revenue needs to be preserved, it might be trimmed here or there.

"What I said we should be looking for, what I'm looking for, are areas that you can reduce the costs of services at the municipal level, and that the state then can reduce the shared revenue by that. The one that I'm focused on — or the most obvious — is health insurance costs," Doyle replied.

"If you can reduce municipal spending for health insurance through a variety of different mechanisms that we're looking at...then you could reduce the shared revenue by that amount," the governor told Mayers. "You would not have in any way have affected the services provided at the local level, but you would have reduced the amount of money going in shared revenue." To get a handle on health insurance costs among Alliance members, we are conducting a survey similar to one the American Federation of State, County and Municipal Employees (AFSCME) did of Wisconsin counties. In the first 11 cities to respond, health insurance costs in the aggregate are expected to increase 15.8% this year, nearly seven times the rate of wage increases (exclusive of benefits).

City leaders: please have relevant staff send in the survey if they haven't already. (The deadline is Jan. 15.) For a copy of the survey, look here. For the Doyle interview, look here.

Freeway Critics Sound Off

Milwaukee County supervisors are wary of expanding freeways within the county, part of a $6.25 billion plan being pushed by the Southeastern Wisconsin Regional Planning Commission, the Milwaukee Journal Sentinel reported Jan. 9.

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More lanes?

Opponents of the expansion proposal dominated a County Board committee meeting called to consider the county's position on how much money should be spent rebuilding the area's freeways, reporter Larry Sandler wrote.

Not only could the project destroy Milwaukee neighborhoods, it could draw money from projects across the state, said Steven Jacquart of Milwaukee Mayor John Norquist's staff.

"However this project goes, it's something that will affect every road project, every bridge project in the state," Jacquart said.

For Sandler's story, look here.

Farmland Tax Break Is Huge

Homeowners and owners of non-farm businesses have paid an additional $644 million in property taxes since 1996 thanks to the state's tax break for owners of farmland, the Milwaukee Journal Sentinel reported Jan 2.

The Wisconsin Farm Bureau will continue to try to get non-farmland like woods and swamp classified as farmland to qualify for the tax break, reporter Amy Rinard wrote.

But she quotes the head of the Wisconsin Taxpayers Alliance as saying the farm lobby's green thumb may have lost its luster because of the state's budget crisis. For the Journal Sentinel story look here.

Bush Plan Could Hit Alliance Cities

President George W. Bush's economic stimulus package could raise the cost of borrowing for Alliance of Cities members and cost the state treasury income-tax revenues, public financing experts say.

"The bottom line for Alliance communities is that it's going to cost a lot more to borrow money if this passes," said Mike Harrigan of Ehlers & Associates, Brookfield.

The reason is that the Bush plan would eliminate individual income taxes on corporate dividends, which will make stocks a more attractive investment. As stocks rise, the bond market is expected to fall, raising the cost of borrowing for state and local governments.

Nationwide, the cost to state and local governments of the package is liable to far exceed the $10 billion in aid that President Bush promised them, the New York Times reported. For the Times' Jan. 8 story, look here. For the newspaper's Jan. 7 story, look here.

Where's the money?
State Earmarked Nothing for Smallpox Vaccinations

The federal Centers for Disease Control and Prevention in 1999 began awarding Wisconsin $1.12 million annually to strengthen the state's public health infrastructure, but federal and state officials didn't earmark a penny of that money to protect the human component of that infrastructure against smallpox, the Associated Press reports.

Former Gov. Scott McCallum's task force on terrorism preparedness reported in October that a focus of spending the CDC money was to "identify and act rapidly to contain the spread of disease outbreaks."

However, federal guidelines for spending that money didn't mention smallpox vaccinations, Dr. Jeff Davis, the state epidemiologist, told the AP.

"I honestly don't know how this ultimately will be resolved," Davis said. "We've committed our resources." See the Wausau Daily Herald's version of the AP story here.

The situation is common in many states, and could force local health departments across the country to shift money from existing prevention and surveillance activities, the New York Times reports. And the possibility that extra federal money will appear on the horizon is iffy, the Times adds. See its story here.

The Minnesota Department of Health has an informative web page on the smallpox vaccination program — something else for which Wisconsin apparently didn't earmark any money —which you can find here.

Budget Myths cont'd
Spending Didn't Cause State Budget Dilemma

By Jon Peacock
Wisconsin Budget Project

There's a widespread perception that the state's looming $3 billion deficit is purely a spending problem brought on by legislators running amok and spending our money like drunken sailors. Let's examine some of the myths that lie behind that view of government spending in Wisconsin.

Myth: We hear all the time that Wisconsin is a high tax state. Obviously we must also be near the top in state spending.

Reality: Our spending is a bit above average, but not far out of line with other states. Relative to income, Wisconsin ranked 18th in general state and local spending in fiscal year 2000. Despite relatively high tax levels, our spending ranking is more moderate because we rely less on fees and get less federal aid than other states. The state does spend notably more than other states on roads (40 percent above the national average) and education (15 percent above the national average).

Myth: The deficit is not a revenue problem.

Reality: A review of state tax trends shows that Wisconsin cut taxes by more than $700 million annually just a couple of years ago. Thanks to those cuts and the economic downturn, total general fund taxes dropped by $900 million annually since 2000. If 2002 taxes had remained at the amounts collected in 2000, the state's deficit would be less than half its current level.

What's not a myth is that Wisconsin is in deep fiscal trouble. But, balancing the ledger by only reducing spending will result in other problems like greatly diminished public services and higher property taxes. Finding our way out and maintaining the quality of public services our citizens have come to expect will require a judicious blend of targeted spending reductions and revenue growth.

Editor's Note: Jon Peacock is director of the Wisconsin Budget Project for the Wisconsin Council on Children and Families. The Wisconsin Budget Project analyzes the impacts of state fiscal policies on low- and moderate-income people in Wisconsin. The above is an excerpt from a guest column that appeared in the La Crosse Tribune. For the whole guest column, click here.

News Briefs

Tax incremental financing, which cities across the state have used to lure billions of dollars of development to blighted areas, won’t be available to help revitalize Appleton’s riverfront anytime soon under current law, Ben Jones of the Appleton Post-Crescent reported. Unless the law changes, Appleton is out of the TIF business until 2007, he wrote. See the story here. Eleven other cities in the Alliance are in the same pickle, we reported in our last newsletter. See that story here.

Under current law, Wausau also is "TIF'd out" until 2007, the Wausau Daily Herald reported. "The only (economic development) tool we really have are TIF districts," Mayor Linda Lawrence told the newspaper. "The state needs more economic activity, and they need to give us the tools. We feel like our hands are tied with limits like this."

On his first full day in office, Gov. Jim Doyle asked state agencies to cut about $1 billion from the previous administration's budget requests, the Wisconsin State Journal reported. Those budget requests total about $12.3 billion for the coming year alone, the newspaper said. For the story, look here.

The Sheboygan Water Utility now offers its customers the option of paying their utility bill electronically. There is no additional charge for this service. Customers will continue to receive their quarterly statement but can designate that payment be electronically transferred from either a checking or savings account.

The city of Long Beach, Calif., will make free wireless Internet access available in its downtown area as part of an effort to attract visitors and companies to the business district, the New York Times reported Jan. 6. The technology, known as Wi-Fi, lets laptop computers link to the Internet via high-speed wireless modems. See the Times story here.

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wrong
number?

Some lawmakers want to pass a bill giving wireless companies money to finance their share of 911 upgrades necessary by 2005 to pinpoint the location of emergency callers using cellular phones, John Dipko reported in the Green Bay Press-Gazette. But the phone companies still want to micromanage local government and allot far less money to local governments than upgrading 911 dispatch centers will cost. The Press-Gazette story is here.

Ashland and Bayfield counties cut off negotiations over creation of a joint emergency dispatch system amidst of questions about cost and level of service, the Ashland Daily Press reported. For its story, look here.

Green Bay and nine suburbs are inching closer to a water partnership, with the city’s Water Commission's approval in principle of the suburbs’ request for the city to share about $1.5 million in study and test costs related to aquifer storage and recovery. Green Bay has already begun the area’s first test aimed at winning approval from a skeptical DNR of the money-saving system that stores drinking water underground. See the Green Bay Press-Gazette story here.

Grousing at town hall: Town officials in Wisconsin continue to try to block annexations sought by developers who want urban services for their projects and property owners who desire better services than towns offer. In Kaukauna, the grousing was reported in the Appleton Post Crescent in a story here, while in De Pere, similar grousing was reported in a Green Bay Press-Gazette story here.

Upcoming Events

2003 (click on underlined text for more)

Jan. 13 Partners in Local Govt. 10 a.m.

Jan. 23 Local Govt. Web Site content workshop UW-Madison

Jan. 28-30 Legislative Floor Periods begin

Feb. 15 annual Superior Days reception 5 p.m. Inn on The Park

Feb. 18 Gov. Jim Doyle budget address

March 12 Assembly for Local Arts - Arts Day Madison

March 20-21 Alliance meeting Madison

April 9 MEUW Legislative Rally Madison

May 22-23 Alliance meeting

June 26-27 Local Telecom Regulation Conference UW-Madison

Sept. 18-19 Alliance meeting Green Bay

Nov. 6-7 Alliance meeting Wauwatosa

Editor's Note: The image of Gov. Jim Doyle and First Lady Jessica Doyle is used with the permission of The Capital Times.

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

2003		(click on underlined text for more)
	Jan. 13	Partners in Local Govt.	10 a.m.
	Jan. 23	Local Govt. Web Site content workshop		UW-Madison
	Jan. 28-30	Legislative Floor Periods begin
	Feb. 15	annual Superior Days reception	5 p.m.	Inn on The Park
	Feb. 18	Gov. Jim Doyle budget address
	March 12	Assembly for Local Arts - Arts Day		Madison
	March 20-21	Alliance meeting		Madison
	April 9	MEUW Legislative Rally		Madison
	May 22-23	Alliance meeting
	June 26-27	Local Telecom Regulation Conference		UW-Madison
	Sept. 18-19	Alliance meeting		Green Bay
	Nov. 6-7	Alliance meeting		Wauwatosa