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April 19, 2004 e-newsletter

Continuing coverage of the 'Taxpayer's Bill of Rights'

Father of Wisconsin's TABOR: Dick Armey

Hutchins Evacuated to Kuwait

Kraus: TABOR a real threat

'Triumph of Blind Ideology over Responsible Public Policy'

TABOR: Rx for Future Crises?

TABOR Tidbits

Anti-Muni Broadband Bill Signed

Upcoming Events

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Amendment's Paternity Told
Kettl Traces Our 'TABOR'

By Rich Eggleston

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Prof. Don Kettl

Wisconsin's 'Taxpayer's Bill of Rights" blew here not on a chinook wind off the east slope of Colorado's Rocky Mountains, but on a gale off the North Dakota plains, via Texas and Washington, D.C.: Dick Armey.

UW Prof. Don Kettl made the link in a Sunday guest column in the Wisconsin State Journal.

"Just behind the scenes of the Wisconsin effort...is a multi-state campaign coordinated by (Armey's) Citizens for a Sound Economy," Kettl wrote.

Richard Keith Armey, for folks who have forgotten, was lieutenant in the 1994 conservative takeover that brought Newt Gingrich to power in Congress. He's a flat taxer who voted with the NRA all the time. His attitude toward government may be reflected somewhere in his most memorable one-liner: "Three groups spend other people's money: children, thieves, politicians. All three need supervision."

But Wisconsin legislators aren't swallowing the Dagwood-style policy sandwich that the former congressman's TABOR represents, largely because of the electoral implications of a swing to the right, Kettl wrote.

"Many observers of state politics have all but assumed some form of TABOR will pass, but the political dynamics make that far from a sure thing," he concluded.

See the column here.

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Bruce Hutchins Evacuated from Iraq

The latest from former Beloit Finance Director Bruce Hutchins:

Some of you might know that I was stationed in Najaf where all this started. (Now, don't accuse me of starting it) I had one exciting trip out of Iraq starting last Sunday. But now I'm on evacuation status in Kuwait City. We might be going back in in a couple of weeks. But we'll be pretty much starting from scratch. All our living quarters and offices were looted.

The teams at Al Kut and An Najaf got the brunt of it. One my team members was captured. I heard he has made international news. Haven't had a chance to watch any TV in 4 months though. I'm not sure I want to start now.

Take Care

Bruce

BruceHutchins@yahoo.com

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Bruce Hutchins
in Najaf, Iraq

Coalition Meets
Three-Pronged Message Eyed

Critics of the move that's afoot to pass a 'Taxpayer's Bill of Rights' in Wisconsin met and agreed on a three-pronged stance on the proposal to weld state and local revenue and spending limits into Wisconsin's constitution:

* Fiscal policy doesn't belong in the constitution, period.
* The coalition won't support "carve-outs" because exempting one governmental activity from the revenue and spending limits with which other units of government would have to live increases the cuts to be borne by other activities.
* Good government demands extensive public hearings and discussion before something as momentus as a constitutional amendment is advanced even through its first session of the Legislature.

While local government, labor and education groups have been meeting on TABOR for months, this get-together was the first that brought in a wide range of health-care providers like hospitals, physicians and nursing homes, as well as advocates for the disabled and mentally ill to the table.

It doesn't make any difference that Wisconsin's version of TABOR, AJR 55, sponsored by Rep. Frank Lasee (R-Bellevue)  is being rewritten and problems that have cropped up in Colorado are being addressed, the gathering was told.

The rejoinder to that argument is that problems are likely to arise that haven't occurred in Colorado, which has a vastly different tax system than Wisconsin, and it is those problems that will be difficult or impossible to solve if a Wisconsin version of TABOR is passed.

"Every formula the state has ever enacted has been changed," said Craig Thompson, legislative director of the Wisconsin Counties Association.   It's not necessary to wait until a new version of TABOR is unveiled to react, he said.

"If we are still talking about amending the constitution, we can react now," he said.

Lobbyist Bill Broydrick said the likelihood of unintended consequences is one of the most important arguments against a TABOR amendment, and one of the biggest unintended consequences could be harm to Wisconsin's economy.

"It's in the interest of people who want Wisconsin to grow to make sure we don't tie our hands behind our back," he said.

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TABOR: Simplistic, Understandable, Superficially Reasonable

By Bill Kraus

The latest issue of Madison Magazine has an article by Val Simson, who is identified as a senior business writer for the magazine. She likes TABOR, which implies that the magazine does as well.

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Bill Kaus

I have had extended conversations with several interested citizens about the threat that this legislation poses to a lot of things we have historically valued in Wisconsin: education, good government, an active public sector which buys land for public purposes among other things.

TABOR, or its handmaidens, has taken the K-12 education system in California from the top 10 to almost the bottom. Emigres who have been there report that it has effectively undermined higher education in Colorado.

TABOR, or its handmaidens, has taken the K-12 education system in California from the top 10 to almost the bottom. Emigres who have been there report that it has effectively undermined higher education in Colorado.

God knows what it has done to local government in these and other places.

The problem, of course, is that it is simplistic, understandable, and superficially reasonable. Mr. Micawber would love it.

The problem that critics face is that all responses to the movement are complicated and, worse yet, sound profligate, selfish, and defensive.

It is, in short, a very real threat and possibility.

Entire column here.

Editor's Note: Longtime political observer Bill Kraus, of Madison, is the former press secretary for Governor Lee Dreyfus, and serves on the board of Common Cause of Wisconsin. The Madison Magazine piece that prompted this column is located  here. Reprinted with permission of the author.

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Andrew Reschovsky
TABOR:  Solution to Fiscal Crisis or Prescription for Future Crises?

Supporters of the Taxpayer's Bill of Rights (TABOR) say state and local government spending in Wisconsin has gotten out of hand, yet Wisconsin is not a particularly high spending state, says Andrew Reschovsky, of the La Follette School of Public Affairs at UW-Madison.

In FY 2000, Wisconsin ranked 18th in spending relative to personal income, Reschovsky told an audience at UW-Oshkosh recently. In the 1990s, the fastest growth in state spending was in corrections and highway spending, Reschovsky found.

When Rep. Frank Lasee (R-Bellevue) proposed TABOR, taxes in Wisconsin were already heading in the right direction, Reschovsky's data show:

* Average school property tax rates have fallen by nearly 50% since 1991.
* ) Property taxes on the median value house have grown more slowly than inflation.
* Property tax burdens on the median value house have fallen since 1994.
* The burden of the three 3 main state taxes has remained unchanged since 1975.

He said the Kettl Commission concluded that solving the state budget problems on the expenditure side will hurt economic growth.

Yet, if TABOR had been enacted the same year former Gov. Tommy Thompson was elected, its effect on the state budget would have been dramatic, Reschovsky found:

TABOR-Spending Chart
                                                          
Source: Andrew Reschovsky

Given the level of cuts required to meet TABOR limits and the realities of the state budget, Reschovsky said:

* Cuts in aid to K-12 education -- about $3 billion worth -- would have been likely, and that would have meant higher property taxes and reduced educational quality.
* Every dollar of Medicaid the state cut would have reduced federal aid by about 60 cents.
* The UW System likely would have seen a drastic reduction in funding
*  Shared Revenue likely would have been eliminated or severly reduced.

Reschovsky's April 16 presentation to the Marquette University Law School on TABOR, in PDF format,  is located here.

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Tabor Tidbits

Editorial Comment on TABOR Piles Up

Even some Assembly Republicans are worried about the 'Taxpayers Bill of Rights,' and with good cause, says the Sheboygan Press. TABOR has brought a myriad of problems to Colorado, and Wisconsin's TABOR rewrite "is being done without input from many Republicans, Democrats and other citizens," the newspaper said. Editorial here.

The Milwaukee Journal Sentinel says it will reserve judgment on TABOR until the rewrite is produced. "But it's worth raising a question: Don't voters elect members of the Legislature to make public policy decisions on their behalf - sometimes difficult decisions such as spending cuts and, yes, tax increases? If the answer is no, and such decisions on the tax side go directly to the voters, then perhaps some other changes are due, too. Such as a genuinely part-time Legislature. At, say, half current pay." Editorial here.

So does legislative, other reaction

“We don’t need a taxpayers’ bill of rights to regulate spending by local, county or school officials, because they are responsive to the people who elect them,”  Sen. Michael Ellis ( R-Neenah) told a meeting. “We do need to control the spending of the state legislators …

Part of the problem with runaway state spending is that elected officials are too beholden to special interests, and they don't want to cut the umbilical cord by enacting campaign finance reform, Ellis added. Story here

The Taxpayer's Bill of Rights could cripple the University of Wisconsin System, and by the time legislators unveil a final version of their plan, it could be too late to respond, the UW Board of Regents decided. The regents passed a resolution expressing "grave concern" over potential legislative action to impose rigid constitutional formulas to limit state and local spending.

"It's a disaster waiting to happen," Regent Nino Amato said. "There is virtually no version that would be good for the UW," agreed Regent Danae Davis. "I think we should influence the direction before it's delivered to us."

By the time the Legislature settled on a final version of TABOR it would be too late to react, Regent David Walsh said.

"I think we're being played (by the Legislature)," Walsh said. "I want the word to go out that we're not neutral on this, so that at no time can (state lawmakers) say the university is on our side." Story here.

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Minnesota TABOR Watch
'Triumph of Blind Ideology over Responsible Public Policy'

Minnetonka (Minn.) City Manager John Gunyou was on a recent panel on Minnesota's proposed Taxpayer's Bill of Rights, a device being pushed by  the Minnesota Taxpayers League. A former resident of Colorado, Gunyou's mind was wandering to the Rocky Mountain State when he finally got a word in edgewise between those with whom he shared the podium

"All the opinions about artificial tax and spending limits (both pro and con) were being pontificated by self-anointed experts who had never actually had to make any of those tough decisions. I was also the only one who had seen firsthand what such Draconian restrictions can do to a state. My home state of Colorado once shared Minnesota's proud tradition of fiscal moderation, but is now ranked at the bottom of our country for such values as education and children's health care. The absolute bottom," Gunyou wrote in the Minneapolis Star-Tribune.

In Colorado, TABOR has "been an unmitigated fiscal disaster, yet the antitax zealots continue to hold Colorado up as the model to be emulated," he wrote. Sound familiar? "Here's one small, but telling, example -- its colleges are now considering 40 percent tuition increases."

Even Gov. Bill Owens, he added, is now calling for a TABOR moratorium to let his state get back on its feet.

"Unfortunately, that'll take another two-thirds vote of the Legislature and voter approval. Colorado's been reduced to managing its daily operations through constitutional amendments," Gunyou wrote.

TABOR, he told his panel discussion, is "the most irresponsible legislation I have ever seen in my 30-year career. It represents the ultimate triumph of blind ideology over responsible public policy."

Gunyou said he made that statement as a fiscal conservative. His column (which may require free registration to access) is here.

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Colorado TABOR Watch


TABOR didn't help economy:
"Proponents of TABOR like to credit it with stimulating the booming economy of the 1990s and softening the current downturn. But just as TABOR did not cause the economy to sputter, neither is there credible evidence to link its restrictive spending limits to economic growth," Wade Buchanan, president of the Bell Policy Center in Colorado, wrote in the Denver Business Journal last month.

"There is no doubt, however, that TABOR is making the recovery much harder," Buchanan added. "This is because it constrains the ability of services to keep up during the good times, as well as restricts our ability to invest and innovate for the future." Story here.

Tobacco Money Going Up in Smoke? Republican Gov. Bill Owens and some legislators support securitizing Colorado's tobacco settlement as a way of getting out from under the problems TABOR is causing the state budget. But not all legislators agree, the Grand Junction Daily Sentinel reports. See the story here.

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Doyle: No Municipal Broadband for Cheeseheads

Wisconsin Gov. Jim Doyle signed the anti-municipal telecom bill (SB 272) into law Friday.

This new law will create state policy that will hobble local government efforts to provide broadband service in Wisconsin, reserve the potentially lucrative market for unregulated phone companies and cable providers and actually encourage price gouging by unregulated monopolies.

It's a direction that reserves broadband services for just some communities, ignores rural areas of the state and invites giant cable companies and telecommunications providers to prey on consumers. The Alliance lobbied vigorously against this bill, but sometimes money talks louder than good sound policy arguments.

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Upcoming Events   




(click on underlined text for more)
May 19-21 Governor's   Conference: Grow Wisconsin Milwaukee
July 29-30 Alliance Meetings Marinette
Sept. 26-28 Wis. Counties Assn. annual meeting Milwaukee
Sept. 30-Oct 1 Conf. on Small City and Regional Community UW-Stevens Point

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THE WISCONSIN ALLIANCE OF CITIES
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Madison, Wisconsin 53703
(608) 257-5881