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January 14, 2005 e-newsletter

City leaders react to Doyle

Which apartment  is tax-exempt?

Letters from Colorado

members:  RSVP for Jan. 27-28

Regional thinking takes guts plus brains

News Briefs

Upcoming events

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Formula changes would affect Alliance?
Doyle pledges to hold local aid line

Gov. Jim Doyle’s pledge to avoid cuts in the state shared revenue program is critical to holding the line on property taxes in the state, the Wisconsin Alliance of Cities said in its official reaction to the governor's state-of-the-state speech.

Doyle cited full funding of shared revenues as the first element of his determination to live up to the state’s commitment to local government. The real beneficiary of that commitment will be the property taxpayer, said Ed. Huck, Alliance executive director.

"Wisconsin will never be able to slay the property-tax dragon without a predictable source of revenue to take the place of property taxes," Huck said. "We now know what our foundation of non-property-tax dollars is for the future."

The governor said state government will work in partnership with Wisconsin communities to hold down property taxes. Huck said the Alliance’s city leaders will work in partnership with the state to bring new jobs to Wisconsin and make all levels of government as productive and cost-effective as they can be.

An Alliance plan to channel future shared revenue growth into a regional revenue sharing program will open wide the throttle on Wisconsin's economy, Huck said. Even though it would start as a modest program and leave in place the state's equitable and proven shared revenue program, it would start people thinking about the regional economies that together form Wisconsin's overall state economy, and jumpstart them to work together to build our regional economies.

"We have a smorgasbord of proposals to reduce property taxes, reform government, reduce the cost of government and revitalize Wisconsin’s economy," Huck said. "Our plate is loaded with issues that will enhance Wisconsin’s quality of life and make government work better for the people.

"But we can’t devote our full energies to those tasks without a stable, predictable source of state funding, and that makes the governor’s commitment paramount," Huck said.

ERP replacement described

Gov. Jim Doyle hinted in his state-of-the-state speech at a major makeover of Wisconsin's expenditure restraint program (ERP), a $57.5 million pot of money on which Alliance members rely heavily.

Under the administration's plans, ERP's would be replaced by a new program,  nicknamed LRIP, for Levy Reduction Incentive Program. However, the new program's name is expected to change because the Department of Transportation already uses that acronym. The new program would:

  • Be linked to levy instead of operating budget increases.
  • Include TIF growth in a valuation factor that would replace the net new construction provision of the ERP formula.
  • As under current law, provide that communities that levy less than 5 mills could not participate.
  • Provide that the growth that determined allowable levy increases under the new program would be regional growth.
  • Establish regions for calculating areawide growth based on regional planning commission boundaries, with recalcitrant counties surrounding Madison that do not belong to a regional planning commission lumped together.in the above.
  • Create an LRIP program for counties with an undetermined amount of money scraped up from somewhere.
  • Provide a bonus payment for communities that levy significantly less than their LRIP limit.
  • Adjust payments to avoid penalizing communities that consolidate or combine services.
  • If shared revenues were reduced in the future, adjust payments to also avoid penalizing affected communities.

"We are still working on the details," Jason Helgerson, executive assistant to Revenue Secretary Mike Morgan, told the briefing.

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Multiple Choice Quiz
Q: Which apartment complex is tax-exempt?

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Sauk Gardens Apartments, 8501 Old Sauk Rd., Madison

or

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Attic Angels Apartments, 8301 Old Sauk Rd., Madison

A: Both complexes are aimed at senior citizens.  Both are high-end developments and feature many amenities. Sauk Gardens Apartments was assessed at $5.8 million last year, and paid $131,688.30 in property taxes. Units at Sauk Gardens rent for between $850 a month and $1,450 per month. Attic Angels apartments, located immediately across a side street, boast many of the same amenities. That development paid no property taxes because it is owned by a "benevolent" association.

Courts have ruled that "benevolent" doesn't mean "charitable," and to qualify for a tax exemption for retirement homes, property owned by a "benevolent association" need provide housing to only one person aged 55 or older. (Friendship Village Milwaukee v. Milwaukee, 181 Wis. 2d 287, 511 N.W. 2d, 345 (Ct. App. 1993).

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Mayor Tom Barrett

There's a Legislative Council study committee examining the situation, and advocates of reforming the tax-exemption system held a news conference at the Capitol Jan. 10 to highlight the disparities the current law allows to exist.

"Milwaukee Mayor Tom Barrett warned...that attorneys and accountants will not hesitate to create tax-exempt facilities to shelter the wealth of the wealthy," Anita Weier of The Capital Times wrote in a story here.

"The schools and police and fire services will be paid for by a smaller number of individuals," Mayor Barrett said. "It is inequitable."

The people who move into such places have enough money to pay for medical services, he said, while a low-income person with an $80,000 home would be on Medicaid.

"This property tax exemption is now being used to shift the property tax burden," said Lodi Mayor Paul Fisk, stating that he tried but did not succeed in negotiating a payment in lieu of taxes by a residential housing complex in his community.

Mayor Mike Miller of West Bend said the elegant Cedar Ridge Apartments in his community pays no property taxes while a poor woman who lives across from City Hall struggles to pay hers.

"Cedar Ridge does nothing for the community," Mayor Miller said. "It is there for the people who live there."

"Groups that don't pay taxes just love it," attorney Fred Mohs, a former UW regent who serves on the Legislative Council committee, said.  "The public like a deer in the headlights just gets run over."

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Letters from Colorado
TABOR is no panacea

"Here in Colorado, where I now make my home, I can state unequivocally and from personal experience that TABOR has decimated many of the most basic services that citizens demand and expect of their government," former Madison resident Todd Van Fossen of Denver wrote in a letter to the editor in The Capital Times.

"School funding in Colorado, for example, is now among the lowest in the nation, and there is serious debate about whether public funding will continue to be available for the state university system.  ...  The arts, as they exist here, are entirely reliant upon the generosity of philanthropists. And transportation improvements, such as the rapid transit program recently passed in metro Denver, are dependent on local referendums to approve additional sales tax levies.

"TABOR is promoted as a panacea -- a way to control taxation and reduce the size of government without 'penalty.' In fact, the opposite is true. Because politicians must run for re-election, and therefore cannot entirely gut basic services without backlash at the polls, TABOR becomes the ultimate in tax shifting and shell games. The result: blatantly regressive taxation and the erosion or elimination of the most basic services."

Letter is here.


TABOR: Bad for your car

"I moved to Colorado from Wauwatosa in July 2000 due to a job transfer," Tim Heimerl of Westminster, Colo., wrote in a letter to the Wisconsin State Journal.

"...I dearly wish I had read more about the so-called 'Taxpayer Bill of Rights' (TABOR) that had passed in Colorado in the early 1990s and is now being discussed in Wisconsin. ...The first thing we noticed after moving was the state of Colorado's school system. It lags Wisconsin's in too many ways to count.

"Then there are the roads in Colorado.   Like the idea of having your wheels aligned two times a year due to terribly rutted highways? ...Snow removal is a joke. Your old car will cost you hundreds of collars to register annually. You start to notice your car is under constant repair due to excessive wear and tear, all for modestly lower taxes..."

Letter here.

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Solving a problem identified in 1973
Does SE Wisconsin have the guts to work together?

The history of Southeastern Wisconsin offers little encouragement to efforts to cooperate regionally and reduce the cost of government, the Milwaukee-based Public Policy Forum says in its latest Regional Report.

"The fact that our strongest examples of regional agreements (SEWRPC and MMSD) are also the most controversial says much about the region's ability to forge multi-jurisdictional agreements that are perceived as being fair by all stakeholders," the Forum said in its December report.

We're not sure about the use of the word "agreement," but  intentionally or unintentionally the Forum omitted the 1990s' most stunning example of a regional approach to solving a perceived problem, and the one that goes far to make its point: creation of the Southeast Wisconsin Professional Baseball Park District, the agency that built the 43,000-seat stadium with a leaky, broken roof and a cellar for its most prominent tenant.

The report is here.

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News Briefs

Gov. Jim Doyle praised Milwaukee Mayor Tom Barrett during his state-of-the-state speech Jan. 12.  "While the Legislature has wasted time arguing over a complicated and unworkable constitutional amendment that would gut education and stifle job growth, Mayor Barrett has actually accomplished something," Doyle said. "He cut spending. Under his budget, the city increased its levy by just 2 percent -- less than inflation."

Stevens Point and Milwaukee are both considering joining Madison with a minimum-wage ordinance in the wake of the Legislature's efforts to block Gov. Jim Doyle's attempt to raise the minimum wage statewide. In Stevens Point, Mayor Gary Wescott said he'll ask the Common Council to implement the recommendations of a bipartisan  task force if the Republican-controlled Legislature doesn't raise the wage by June. Story here. In Milwaukee, Ald. Tony Zielinski introduced an ordinance,  expected to win Common Council approval in February, to raise the minimum wage to $6.50 an hour by 2006. Story here. In Madison, a minimum wage of $5.70 an hour took effect Jan. 1.


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Upcoming Events   




(click on underlined text for more)
2005
Jan.. 19 Government spending conference Madison
Jan. 27-28 Alliance meetings Green Bay
Jan. 31 Manitowoc Cnty GOP TABOR forum Manitowoc
Feb. 2-4 Governor's Economic Dvlp Conference Madison
Feb. 25 Ehlers Inc. TABOR forum Wisconsin Dells
Mar. 10-11 Alliance meetings Waukesha
May 11-13 State APWA (public wks) spring conference Lake Delton
May 19-20 Legislative Luncheon, Alliance meetings Madison

(details of the latter Alliance meeting TBA)


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