$261 million giveaway to WMC oligarchs lacks one thing... THE MONEY

As Wisconsin’s budget deliberations near the end, keep your eye on an issue that has been making its way through the State Legislature outside of the budget. This is a bill that would either give business a huge tax break while raising property taxes for homeowners, or cause a huge increase in spending to make up the difference…using money that we don’t have.

The bill would eliminate the personal property tax in the state, and it is generally assessed onto additional items that are outside of the actual building and its size - items such as machinery and furnishings. Businesses pay most of this tax as part of their annual property tax bill, but the WisGOP Legislature has been trying to get rid of this, at the urging of right-wing corporate groups like Wisconsin Manufacturers and Commerce.

The Wisconsin State Journal’s Matt DeFour had a front-page story on this issue today, and mentioned that a huge roadblock is the tax shift that would jack up homeowners’ property taxes (because there would be a higher property tax rate due to a lower tax base). As a result, the WisGOPs are trying to find a way to “backfill” that personal property tax write-off with state tax dollars, so that homeowners don’t see a huge increase in their property tax bills and get rightfully pissed off.

But there's a problem- there's not $261 million around to spend.

...the bill comes with a steep $261 million annual price tag that could make it difficult to pass during a contentious budget year in which resources are scarce. Under the proposal the state would reimburse municipalities and schools with general tax dollars that otherwise could pay for education, transportation or other tax cuts.

A spokeswoman for Senate Majority Leader Scott Fitzgerald, R-Juneau, said in an email the proposal “is certainly still on the table for this legislative session” and “as budget deliberations continue, further discussions about this measure will be guided by the amount of available revenue.”

Yeah, the “available revenue” is a problem, given that we only had $12 million in extra money available under Governor Walker’s original budget, no additional revenues have materialized due to stagnant job and wage growth, and few savings have been able to be “banked” over the course of the 2017-19 budget process.

I happened to tune in to the May 24 Senate hearing for this bill, and caught Dem Sen. Kathleen Vinehout channeling Cuba Gooding Jr., as she made a simple request to the WisGOPs on the Senate committee when it came to backfilling this tax break, and keeping homeowners from having their property taxes go up.

State Sen. Dewey Stroebel responded to Vinehout’s concern by adding an amendment to the bill which gives those local governments the money, which the Wisconsin Department of Revenue estimates at $261 million a year. This would be similar to how Scott Walker and WisGOP plans to spend $180 million in General Fund tax dollars over the next 2 years to make up for the removal of the part of your property tax bill that pays for forestry operations.

That move came as a comfort to the head lobbyist for the League of Wisconsin Muncipalities, but he admitted that it’ll be hard for the Legislature to literally put its money where its mouth is.

“Ordinarily we vigorously oppose this type of a bill, but they didn’t have any programs to reimburse counties and municipalities for lost revenues,” said Curt Witynski, a lobbyist for the League of Wisconsin Municipalities.

“I still don’t know where they’ll get the money, but I know there’s a strong, strong desire by the core members of both houses that want this to get accomplished.”

Well, WMC cash and other big-money oligarch groups do tend to increase those “desires” on their WisGOP puppet politicians. And make no mistake, making those guys happy is the only reason this regressive expensive giveaway is being considered.

And DeFour’s article hints at how this might be done to avoid the impression of a major giveaway of tax dollars and related budget problem for the 2018 elections. State Rep. Dale (Koo-Koo) Kooyenga is quoted in the article as saying this corporate tax break might be phased in over several years. Kinda like how Koo-Koo’s latest income tax cut plan would be phased in, with the price tag exploding in those later years and becoming a major handcuff to future budgets.

Even the current personal property tax bill is set up to be that way, with the first year of the exemption happening in 2018, which likely delays the $261 million in payments until year 2 of the 2017-19 budget, and the effect on property tax bills would not be seen by homeowners or local budgets until after the November 2018 elections. But WMC and other right-wing oligarchs would know about it, and be likely to kick back some of that tax cut in 2018 to GOP puppets who voted for it.

The personal property tax giveaway and the “backfill” amendment has yet to be voted on, and interestingly is not scheduled for a vote in the Senate Revenue Committee when it meets later this week. This makes me wonder if the GOP-run Joint Finance Committee might be the ones to try to push this property tax giveaway through, perhaps as a last-minute “999” budget maneuver as part of some bigger “property tax deform reform” package.

But again, where’s the money going to come from? Being on the outside, it is intriguing to see the number of ways that WisGOP is being pulled on the budget, and how their competing interests and past giveaways to rich and politically-connected Wisconsinites is now hampering their ability to do more corporate giveaways in this budget.

It also is getting in the way Scott Walker’s facade of appearing moderate and caring ahead of his 2018 re-election campaign, because it’s becoming increasingly harder to give more money to schools or roads when you’re blowing all that money on giveaways like a repeal of the personal property tax. Funny how extra revenue never seems to trickle out of these tax-cutting schemes, isn’t it?