Monday, March 8, 2004

Tax cap will wreak havoc

By Harry L. Peterson

Wisconsin legislators are proposing an amendment to our state constitution to limit state spending based on an approach approved in Colorado over 10 years ago.

The amendment, called the Taxpayer Bill of Rights, would limit state spending to the growth of population and inflation. The idea is compelling. People do not like taxes - so why not limit the amount of money collected by the state? It is described as a conservative idea. It is not. It is a radical idea with radical consequences.

I lived and worked in Wisconsin for 25 years and returned to retire here because I love this state. Until recently, I served as a college president in Colorado, where I experienced first-hand the effects of TABOR. While all of state government has been affected, my remarks are only about higher education, the subject I know best.

In years when inflation is very low and the population does not increase, tax collections cannot increase. The amendment limits tax revenues, irrespective of the need for matching federal funds or needs for new services. If more tax revenue is collected than permitted by the Colorado constitution, the money is returned to the taxpayers. This violates the conservative value of saving for emergencies.

The amendment to the state constitution also limits spending regardless of the source of the money. Thus, Colorado universities cannot raise out of-state tuition, even when students and parents are willing and able to pay.

Much like Wisconsin, the Colorado constitutional amendment was put on the ballot by the legislature and approved by the voters without a great deal of discussion or debate. After 10 years, the effects   have been devastating.

For example, under TABOR, Colorado tax support for higher education has decreased from about $770 million in 2002 to $590 million in 2004, while the public colleges and universities absorbed a 16.2 percent increase in new instate students. They are educating more students with less money.

At Western State College, which I led for six years, Colorado residents pay slightly over $2,400 per year in tuition, dramatically lower than the rest of the country. Parents of these students are able and willing to pay higher tuition, to provide I adequate support for the college. However, TABOR prevents them from doing so.

If the present trend continues, Colorado's tax support for higher education will decrease to $83 million in 2009, effectively eliminating public higher education in Colorado.

In Wisconsin, we rank last among the 50 states in attracting college graduates. Public higher education, the way in which we help create effective citizens and fuel the economy of our state, is one of Wisconsin's greatest traditions. With TABOR, it will be at even great risk than it is now.

We have argued since our country's founding about the proper role and size of government Surely we can agree that Wisconsin should offer its citizens a good education, a clean environment, safe streets and a sound transportation system.

Serving as a state legislator has never been easy, and it is especially difficult now. Voters seem to want services but do not want to pay for them. For a legislator to vote to put a constitutional amendment on the ballot to limit spending, without specifying what services will be reduced is easy. It is also easy for the citizens to vote for such an amendment. It is compelling and simple.

Former President Dwight Eisenhower observed that many radical ideas are simple and attractive. But he added: They are almost always wrong. TABOR is not conservative or fiscally responsible; it is radical and it should be rejected.

Peterson was a UW-Madison Administrator, 1978-90, and president of Western State College of Colorado, 1996-2002.

(Reprinted by the Wisconsin Alliance of Cities with permission of the author)