Step 1: Eliminate the state personal property tax, which the Wisconsin Taxpayers Alliance (WTA) says totals about $287 million a year – taxes now collected by cities, towns and villages. Cities get about two-thirds of that. This is not the property tax you pay on your home, which generates far more — billions in tax revenue — for local governments across the state, but the little-known personal property tax mostly paid by businesses.For context, Walters reminds us how much the gas tax and registration fees would have to go up as part of this scheme, with a 1-cent increase in the gas tax equalling $33.4 million in revenue, and a $10 increase in vehicle registration fees adding $47 million. So $287 million in revenues would mean a gas tax increase of 8.5 cents a gallon, or jacking up the registration fee from $75 to around $136. Or there could be a combination, like a 5-cent increase in gas tax and making the registration fee $100.
Step 2: Raise the gas tax or vehicle registration fee, or some combination of revenue increases, to pay for highway programs by about that same $287 million. It would be a step toward closing an estimated $1 billion shortfall in funding for road building and maintenance. Assembly Republican leaders, and some Democrats, are willing to raise revenues to avoid construction delays or more borrowing….
Raising the proper revenues to pay for highways is a nice first step, and that part I’m OK with. But what an awful trade-off to do it, as getting rid of the state personal property tax is nothing more than a giveaway to the corporate and well-off, and would cause a drastic shift that hurts homeowners and local governments.
It’s worth giving a look at the recent release of equalized values from the Wisconsin Department of Revenue to see the impact of removing the personal property tax from the overall tax base (you can click on your county and community here). If you go out from their and look at the state totals, you can see that cities have more of their tax base come from this personal property tax.
% of tax base susceptible to personal property tax
What this means is that cities would have to make up a bigger loss to their tax base than more rural areas of the state. And in particular, the removal of the personal property tax seems to give a larger hit to smaller to mid-size communities that have a disproportionate amount of factories and warehouses along with property values that are not as high. And even though the state’s two largest cities won’t have it as tough as others, their personal property tax proportion is still above the state average of 2.49%.
% of tax base susceptible to personal property tax
West Milwaukee 8.14%
Prairie du Chien 6.25%
Beaver Dam 6.08%
Green Bay 5.00%
Pleasant Prairie 4.94%
Fond du Lac 4.87%
This also means that residential homeowners in those communities will likely have to pay higher property taxes in order to make up the difference, since removing the personal property tax means more of the property tax base ends up being residential. Walters notes that this is leading a longtime Walker ally to tell the Governor not to go along with this plan.
The powerful Wisconsin Realtors Association (WRA), which has supported Walker in his three campaigns for governor, warned in a statement that abolishing the personal property tax “without identifying an alternative source of revenue” would increase the property tax bill on average Wisconsin home by $80 per year.Those higher property taxes may also be hard for local governments to accept, resulting in a cut of services. That’s independent of any other legislation that might be passed by this WisGOP crew to reduce shared revenues to local governments, if they stay in power (a strong possibility given how messed up the budget may be on both the Transportation and General Fund sides).
Chief WRA lobbyist Joe Murray also said that increase would ”violate Gov. Walker’s property tax pledge” to keep property taxes lower in 2018 than in 2014 and ”worsen Wisconsin’s ranking has one of the highest property taxed states in the country.”
Plus, why the hell does the business community in Wisconsin need any more tax breaks? After 5 ½ years of giveaways in the Age of Fitzwalkerstan, we still have the worst job growth in the Midwest, and its lowest manufacturing wage, showing that these tax cuts haven’t trickled down to the average Wisconsinite. And now the average Joe/Jane is going to be shelling out higher property taxes to pay for this next sellout to
But Walters includes a final tidbit which should be the final straw as to why this trial balloon to dump the personal property tax is such crooked garbage.
It meets Republican Gov. Scott Walker’s read-my-lips promise to oppose any increase in Transportation Fund revenues, unless there is an offset in other tax collections. It’s another tax cut that helps businesses, who are expected to again support Walker if he runs for a third term two years from now. And, it repeals a tax that many regard as unfairly and unevenly administered.Walters has this half-right, as part of this scheme is set up to stay in the good graces “no-tax” special interests. But it isn’t for Walker running for a third term in 2018 (which I doubt even happens), but instead because this delusional fool still thinks he can be a presidential candidate in 2020. Walker can’t kiss up to the Grover Norquists and the Kochs and other oligarchs if he is seen as raising taxes. It’s the exact same BS game that Louisiana Governor (and fellow 2016 GOP primary washout) Bobby Jindal tried to pull in Louisiana 1 ½ years ago.
He had to plug a $1.6 billion projected deficit for next year — 20 percent of Louisiana’s general fund — and he had to do it without violating an anti-tax pledge he made to Americans for Tax Reform (ATR), the influential conservative group headed by Grover Norquist. Jindal’s anti-tax credentials have been a prime selling point in his unannounced campaign for president.Need I remind you what happened in Louisiana, where these “no taxes by any means” policies meant that new governor John Bel Edwards had to face $2.9 billion in deficits for the next 2 ½ years when he took office this January, and the state now needs to take out short-term loans just to meet up-front expenses of the National Guard and other emergency services as they grapple with the state’s historic flooding. A Louisiana-like fiscal disaster is what we will have in Wisconsin if Republicans stay in power in this state after the 2016 elections, which is something Scott Walker and his puppetmasters would be perfectly fine with (it makes for a good excuse to sell things off even more).
Jindal’s solution: eliminating $526 million in tax rebates, most notably for the state’s business inventory tax. Norquist’s group blessed the decision, concluding that ending tax rebates would not amount to a tax increase.
But that distinction has prompted ridicule from state lawmakers and political commentators on both the right and the left, who accuse Jindal of selling out the state’s tax policy to Norquist.
So let’s give thanks to Steven Walters for exposing this absurd Norquistian scheme of WisGOP’s to give yet another tax break to businesses while jacking up property taxes for homeowners and gas taxes and registration fees for everybody. Because maybe news of this getting out ahead of November will allow enough places in the state to see just how foolish and dumb these WisGOPs are, and they’ll boot enough of them to keep this “repeal the property tax for business” garbage from ever going through.