Friday, February 22, 2013

Walker to local governments- drop dead

There are a lot of places to rip on Governor Walker's budget, given that it's clearly designed with national interests in mind, and couldn't care less about the fate of the Wisconsinites that pay into it. But I want to focus in on one particular area of the budget- shared revenues with local governments and the inevitable damage that will result.

In Wisconsin, our local governments are heavily reliant on two sources of revenue- payments from the state through shared revenues, and property taxes. We don't have much in terms of local sales taxes (0.6% is the max in the Milwaukee-area counties that pay the Miller Park tax), and by law Wisconsin communities cannot have local income taxes. So state shared revenues are a big deal, and any changes in that amount will inevitably change the property tax burden and the level of services a community can provide. In the 2011-2013 budget, Governor Walker cut state shared revenues to most communities, and by 7 percent statewide, but the argument at the time was that if communities simply used the "tools" in Act 10, that would make up for the cuts, and there wouldn't be much of a problem. There were also mentions that shared revenue payments would increase once the tools were in place, because the state and local governments would be on better fiscal footing.

And we now know that argument is a LIE, as the League of Wisconsin Municipalities estimated in April 2011 that Act 10 only covered 3/5 of the cuts to shared revenues, and it was also false because Act 10 exempted police and fire department workers (for political reasons) and later transit workers (after WisGOP realized that it would cost the state tens of millions of dollars in transit aid), while not making up the difference in cost for not being able to renegotiate the benefits for these workers.

Then you look at the Walker budget for 2013-2015, and you see it is so damaging that shared revenues will barely change in this budget. The LWM has a good breakdown of the effects and big-government mandates from Madison that are part of Walker's campaign pamphlet budget.
Governor Walker recommends in his proposed state budget maintaining current funding levels for shared revenue, general transportation aids, expenditure restraint, and the payment for municipal services programs. The last state budget made substantial cuts to all but the Expenditure Restraint Program. The Governor has declined in this budget to restore any of those cuts.

Other items in the Governor's budget include:

Levy Limits. The Governor recommends leaving in place current property tax levy limits so that municipalities may only increase their levies to match any growth in equalized value due to net new construction. The Governor recommends extending the supermajority vote requirement for authorizing carrying over of unused levy capacity. The maximum carryover of unused levy capacity is limited to .5% of the previous year's total levy.

Preemption of Local Residency Requirements. The Governor's budget proposal prohibits municipalities from imposing or enforcing residency requirements on municipal employees. It also makes the issue of employee residency restrictions a prohibited subject of bargaining.

Rules Governing the Rehiring of WRS Annuitants. The Governor's budget includes language addressing municipal hiring of WRS annuitants by increasing the break in service requirement from 30 to 75 days and requiring anyone returning to state or municipal employment at two-thirds of full time to stop his or her annuity and rejoin the WRS.

Shifting Mass Transit Operating Aids out of Transportation Fund. The Governor recommends funding transit operating aids from the general fund rather than the transportation fund, beginning in fiscal year 2014-2015.

Expenditure Restraint Budget Adjustment for Contracted Services. The Governor's budget includes language excluding expenditures provided by a municipality on behalf of a school district or other unit of government pursuant to a contract from being counted as an increase under the expenditure restraint program's budget growth test.

Gotta love that last one, where privatization of services is not only allowed, but openly encouraged whether it's cheaper to do so or not! You can bet that campaign contributors stand to gain from that little giveaway, much like we saw in the last budget when a provision was thrown in trying to prohibit local governments from working together on road projects, and forcing it to be privatized, even if it was more expensive to do so!

And Milwaukee and Milwaukee County will especially be hurt by this ideological budget. Bruce Murphy wrote a great article last year discussing just how much the City of Milwaukee has been screwed by these shared revenue cuts over the last 15 years.
In 1995, 53 percent of Milwaukee’s general purpose budget was paid for by shared revenue; today, just 39 percent comes from this. Most of that decline occurred in just the last decade, under governors Scott McCallum, Jim Doyle and Scott Walker. In the 1992/93 budget year, figures from the Legislative Fiscal Bureau show, 13.1 percent of the state budget went to shared revenue; by 2012/13 it accounted for just 6.3 percent of the state budget.

This has had dreadful consequences for Milwaukee. In 1995, Milwaukee’s $224 million in shared revenue was enough to pay the entire cost of Milwaukee’s police and fire departments, plus another $38 million for other costs. By the time Barrett was running for mayor in 2003, shared revenue to Milwaukee had dropped to the point where it was only enough to pay for the police department’s budget.

Today, nine years into Barrett’s service as mayor, shared revenue to Milwaukee doesn’t even pay for the police; it now falls $114 million short of paying for the police and fire department budgets.

If it had risen at the rate of inflation, that shared revenue payment of $224 million in 1995 would be $340 million today; in fact, Milwaukee now gets $218 million. That’s a drop of 36 percent in real dollars in state aid to Milwaukee.
And given that inflation is sitting around 1.7% a year, keeping shared revenues flat continues that trend of cuts in real dollars to the state's largest city and economic center.

Milwaukee County will also continue to feel the squeeze, as transit aids would stay at the same reduced levels they were at for the last 2 years, and are slated to remain 10% below the amounts it received in 2011. And it is important to remember that the County can't make up for those cuts in any way other than fares (already high at $2.25 a ride) or property taxes (where it has to fight it out for funding with all the other county needs, and is still under the shared revenue constraints). And remember that Walker lobbied against having a 1% Milwaukee County sales tax dedicated to transit, parks, and EMS services, even though Milwaukee County voters approved of such a measure in a 2008 referendum, and even though such a measure would have been the best way to maintain services while keeping property taxes in check.

The damage Walker's budget is doing to the Milwaukee area is especially sick given that Walker was County Executive for Milwaukee County for 8 years before becoming governor. I guess he's not planning on coming back there after he leaves office, is he? He's probably planning to "make some real money" in the private sector as a Faux News Contributor or some other wingnut welfare position. Meanwhile, we'll be left having to clean up from this sicko's mess, and having to spend a lot of time and money to restore our communities' services back to the level it was at before the Age of Fitzwalkerstan began in 2011. And if we don't rise up in the next 2 years and shoot down these sell-offs and ridiculous ideas that handcuff local government in Wisconsin, it may end up being too late to ever getting the state back to a recognizable place that we care to live in.

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