"Other states have patched their shortfalls by tapping into rainy-day funds," Doyle said. "The one I found upon taking office contained $201. Even at the height of the boom, Wisconsin was one of only five states that failed to set revenues aside for a rainy day. Now a storm has broken out, and we're left without an umbrella." For the text of the governor's speech, look here. For the wispolitics.com story, look here.

"My overall view is that it was a good speech. I think he dealt the cards on the table, and now we've got to look at our hands," La Crosse Mayor John Medinger told the La Crosse Tribune after the speech. "I think the cities are willing to share in the (budget cuts) pain as long as we think it's fair. The economic decisions have moral ramifications, and those folks in Madison better not forget that when they talk about cutting services for vulnerable people."

Oshkosh Mayor Stephen Hintz told the Oshkosh Northwestern he was glad to see Doyle address ever-rising health insurance costs. However, he was eager to learn more about Doyle’s solution. "It’s a good idea," he said. "But we didn’t see any details as to how this would work."

The Wisconsin Public Television program, Here and Now, took  a look at the Governor's proposals and re-examined the significance of shared revenues to local communities. Alliance President and West Bend Mayor Mike Miller and Cudahy Mayor Ray Glowacki joined the program with their perspective.

Regional Tax-Base Sharing Eyed
Sheehy Task Force Issues Report

"This report’s theme is simple: New public policies and cooperation should encourage regional service efficiency and regional economic growth. Existing policies favor inefficient independence over efficient inter-dependence and encourage us to compete against ourselves for jobs," the task force said. "In short, Wisconsin must live within its means at the same time it grows the means to live."

The task force made six major recommendations. It said state government should:

		Authorize regional tax-base growth sharing;
		Modernize Tax Incremental Financing (TIF) for metropolitan and rural use;
		Link shared revenue growth to the percentage of state budget growth;
		Achieve greater shared revenue equity;
		Use shared revenue to reward service sharing; and
		Encourage delivering public services on  functional rather than political lines.

"State policies should reflect the reality that Wisconsin’s economic strength begins in the communities and regions, and that regions compete globally," the task force said regarding its first recommendation. "Growth sharing tax policies have been successful in other states such as Minnesota and are easily applied to metropolitan areas. Growth sharing also can be tied to support for regional services or infrastructure and therefore encourage service sharing."

Appleton Mayor Tim Hanna, a member of the task force, told the Appleton Post-Crescent the task force blueprint will not solve Wisconsin's immediate fiscal problems.

“But what it does is provides a framework for a better long-term fiscal future for the state of Wisconsin,” Mayor Hanna said. For the Post-Crescent story, look here.

For the task force's summary and major recommendations, go here. For the complete report, go here. For a comparison of key points in the task force report and planks of the Alliance legislative agenda, look here.

Regional tax-base sharing "can both enhance the equalizing effects of statewide aid systems and decrease the incentives for local governments to engage in wasteful competition for tax base," Myron Orfield and Thomas Luce wrote in their  January, 2002 study, Wisconsin Metropatterns.

Since 1971, they noted, local governments in the Minneapolis-St. Paul area have contributed 40% of their commercial-industrial growth to a regional pool, and the money has been redistributed back based on local tax base per capita.

"Tax-base-poor communities get back more than they paid in to the pool, while tax-base-rich communities get back less," Orfield and Luce wrote. "Because all communities keep 60% of the growth, the program allows municipalities to cover the costs of development, but, because they lose 40%, the program reduces the incentives for inter-local competition for tax base."

In Wisconsin's metropolitan areas, sharing 40% of all growth (not just commercial-industrial) for a single year would produce a significant pool.  Here are some figures we put together for the Kettl Commission:

For Ed's September, 2000, memo to Don Kettl and West Allis Mayor Jeannette Bell on tax-base growth sharing, look here. For Metropatterns history and more on our issues, click on one of the buttons to the left on our home page.