logo
April 18, 2003 e-newsletter

special edition: Levy Freeze

(for the Alliance's April 16 newsletter, click here.)

----
Bogus Projection Used?
Levy Freeze Proposed for Local Governments, Schools

By Rich Eggleston

Four Republican state legislators on April 16 proposed a property tax levy freeze on local governments, counties and schools, claiming that property taxes would increase nearly $400 million in the next two years without it.

"A recently released memo by the non-partisan Legislative Fiscal Bureau concluded that Gov. Doyle's budget proposal would increase property taxes by 9.5% in 2003 and 7.7% in 2004, making a two-year increase of 13.7%," the four said in their news release.

The four  — Sens. Bob Welch (R-Redgranite) and Dave Zien (R-Eau Claire), and Reps. Luther Olsen (R-Berlin) and Scott Suder (R-Abbotsford)   — were relying on a Fiscal Bureau memo that assumed that local governments and schools would pass on all the cuts in state shared revenue and the shortfall in school aids in Gov. Jim Doyle's proposed budget bill to the property taxpayer.

That premise astonished city leaders across the state.

West Bend Mayor Mike Miller also said a freeze would hinder economic growth in Wisconsin and increase the cost of borrowing in communities across the state.

Lobby Day April 25

The Alliance will join other members of Partners for Strong Communities in a Lobby Day on Friday, April 25.

Partners includes the Alliance, the Professional Firefighters of Wisconsin, AFSCME Council 40, the League of Wisconsin Municipalities, the Wisconsin Counties Association and Municipal Electric Utilities of Wisconsin.

To RSVP, for more information, and information on the Alliance / League legislative luncheon May 22, click here.

There's also a symposium sponsored by Springsted of St. Paul, consultants to the public sector. See that agenda here. 

miller.jpg (24588 bytes)
Mayor Mike Miller

 "The reality in city halls across Wisconsin is that raising property taxes is the last thing local officials plan to do. The mayors in the Alliance of Cities with whom I have spoken unanimously vow to hold the line on property taxes in their communities," Mayor Miller told the four legislators, plus Joint Finance Committee co-chairs, in a letter. "At this time, no one is talking about property tax increases except you."

See Mayor Miller's letter here.

"The path out of the fiscal problems of the State of Wisconsin runs right through the municipal efforts to increase the tax base through investments in industrial parks and assistance to commercial development," Neenah Mayor George Scherck said in a letter to Finance Committee co-chair Rep. Dean Kaufert (R-Neenah).

"If that investment stops and development stops, how does the state plan to get out from under the fiscal crisis it finds itself in today?" Mayor Scherck asked.

Oshkosh City Manager Richard Wollangk's reaction was reported by the Oshkosh Northwestern in a story that can be found here.

In a reply to Mayor Miller, Sen. Welch asked how his plan could harm municipal bond ratings. At a news conference, on a radio talk show and later in a phone call to the Alliance, Sen. Welch said the final version of a freeze would likely include an allowance for growth — new homes, commercial development, etc. — but not inflation in property values.

"Our plan is not a cut, so why would a property tax freeze threaten the bond rating of Wisconsin communities?" he asked.

While we recognize a levy freeze does not mean an automatic bond rating downgrade, we are told it definitely is a negative factor that the rating agencies like Moody's and Standard & Poors would consider in rating Wisconsin local government bond issues.

Rating agencies focus on is the long-term ability of the municipal borrower to repay its debt.  Municpal bond investors hate levy freezes. The result is higher interest rates on borrowing for a wide range of local projects — and more fiscal pressure on Wisconsin communities.

----
News Briefs

Madison Mayor Dave Cieslewicz hit the ground running this week, instituting a hiring freeze and otherwise firming up the city's preparations for a potential loss of $3.7 million in state aid. See the Wisconsin State Journal story here.

bauman.jpg (3086 bytes)
Sue Bauman

 Meanwhile, the Milwaukee Journal Sentinel reports (but apparently didn't post to the Internet) that Mayor Dick Bolender of Oak Creek hit the ground directing traffic. Mayor Bolender, who was sworn in later that day, became a traffic cop at the site of a five-alarm fire that started as a grass fire, but destroyed a home and an apartment complex and sent eight firefighters to the hospital before it was contained.

And Gov. Jim Doyle named former Madison Mayor Sue Bauman to the Wisconsin Employment Relations Commission, which promotes collective bargaining and labor peace in both the public and private sectors. See that Wisconsin State Journal story here.

----

top

Upcoming Events

(click on underlined text for more)
April 23 commuter rail hearing Kenosha
April 24 commuter rail hearing Milwaukee
April 30 commuter rail hearing Racine
May 1 commuter rail hearing Cudahy
May 14-16 Amer. Publ. Wks. Assn. - WI Chapter Madison
May 21 Transit Day at the Capitol Madison
May 22 Springsted symposium for all local govts. Madison
May 22-23 Alliance meeting Madison
May 22-23 Regional Alliances for Economic Success Wausau
June 26-27 Local Telecom Regulation Conference UW-Madison
Sept. 18-19 Alliance meeting Green Bay
Oct. 29-31 League of Wis. Municipalities annual  mtg. Milwaukee
Nov. 6-7 Alliance meeting Wauwatosa
----

top

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