In Wisconsin, local governments rely largely on aid from the state and federal governments for operations, as only counties can generally levy a sales tax, and the property tax and other fees are the main ways to raise the rest of the money. A problem with that system is that shared revenues were cut soon after Walker and WisGOP took power in 2011, and has been basically kept at that lower level in the 7 years since then.
In addition, Walker and WisGOP have decided to make limiting property taxes as a priority. Vinehout notes that the problem with this is that it makes it hard for local governments to keep the same level of services.
State law limits local governments’ ability to raise revenue from property taxes by imposing levy caps. The combination of levy caps and decreased shared revenue from the state leaves local officials asking ‘What do we cut?’
On this one-way street where the state makes the rules, limits what local government can spend, and doesn’t share increasing revenue, local folks are stuck paying more of the cost and have few options to get extra money.
As usual, she's right.
This manufactured budget crunch helps to explain why we have seen so many new local "wheel taxes" get imposed onto state drivers in the last few years, because that is one of the few options that Vinehout alludes to. The wheel taxes help communities fix their streets and take care of other transportation needs, which frees up a bit of money that can be used for other needs and services.
The City of Green Bay and Eau Claire County are among the newest places that have turned to a wheel tax to deal with their funding issues, and it puts the lie to Scott Walker's pose of "I haven't raised your taxes." If I'm looking at my figures correctly, over half of Wisconsin's population will be paying an additional vehicle registration fee by the start of next year, and mostly as a direct result of underfunding of aids for roads and local governments by Walker and his WisGOP buddies in the Legislature.
But wheel taxes only deal with one area of a local government's budget. Vinehout notes that the Act 10-exempt areas of public safety requires an ongoing investment, and that reality takes away from the already-strapped other services under the current local government funding system.
As discretionary programs are eliminated, more of local government budgets are taken up by public safety. Police and fire protection costs are increasing. But neither the levy cap nor the state shared revenue payments cover the increase.Vinehout recently mentioned at a Dem gubernatorial candidate forum that she would like to raise shared revenues by $450 million if she was elected governor, and she expounds on that situation in this column by noting that these increases would simply restore much of the value that has been lost in the last decade and a half.
Local officials are forced to choose whether to cut: public safety, repairing the roads, and/or community mental health and drug addiction programs.
In a memo I requested from the nonpartisan Legislative Fiscal Bureau, shared revenue would need to increase by about 30% just to keep up with inflation since 2004. That would require an investment of $415 million in the next state budget.It’s not like the money isn’t there, as Vinehout notes that the LFB estimates that $464 million is scheduled to be sent to Foxconn in the 2019-21 budget. Sure, some of the Fox-con's costs are supposed to be paid back in the form of added economic activity, but that doesn’t mention the economic activity that will go away due to the additional service cuts that are likely to be forced onto local governments over the next 2 years if nothing is changed.
I also want to go back to a version of the chart I showed yesterday, where I used information from the state's Annual Fiscal Report and the 2017-19 budget to show the change in tax funding of certain parts of state government. What you'll see here is that when Walker and WisGOP came to power, there were slightly more tax dollars going to shared revenues than there were to property tax credits. It's not that way today.
What this illustrates is that the starving of local government in Wisconsin has been a conscious choice by Scott Walker and the Wisconsin GOP over the last 7 years. And as Kathleen Vinehout writes, it's a situation that can be reversed, if we choose to put new people in charge.