Sunday, May 18, 2014

Untie Milwaukee's and Madison's hands and let em tax!

A constant concern in Wisconsin is how to fairly fund the state's numerous municipalities and government sources, and nowhere is that more evident than in the two largest counties in the state- Milwaukee and Dane Counties. Not only are these areas filled with the widest mixture of poverty and riches out of pretty much anywhere in Wisconsin, but they also are sources of income, derision, and resentment. A couple of recent reports showed how these areas are going in different directions than much of the rest of the state, beyond the fact that they disproportionately vote for Democrats.

Milwaukee and Dane Counties are one of the few areas with favorable demographics for future growth, as illustrated in the recent Wisconsin Taxpayers' Alliance report.

In addition to the good demogrpahics, Milwaukee and Dane Counties also provided more than half of the state's population growth in the last 3 years.

Population change, Wisconsin 2010-2013
Dane County +21,866
Milw County +8,288
TOTAL +30,154
Rest of State +25,576

Doesn't exactly seem like places that are in decline, are they? So why are GOP legislators always trying to knock them down and keep them from becoming even more desirable and favorable for growth? Would any business owner do such a dumb strategy?

In addition, Milwaukee and Dane Counties are by far the two largest draws of tourism dollars of anywhere in Wisconsin, as the recently-released state tourism report shows. These two counties account for 1/4 of the state's tourism dollars, and the 4th name on the list also draws a sizable amount of "their" tourism income from events in Milwaukee.

Top Counties for tourism spending, Wisconsin 2013
Milwaukee $1,692 million
Dane $1,044 million
Sauk $888 million
Waukesha $665 million
Brown $558 million

You'd think that these strongly-performing areas would be backed by the state Legislature as an economic engine to be helped, but instead they are constantly put under limitations by the 262-controlled Legislature. Bruce Murphy mentioned in late 2012 how badly the City of Milwaukee has been cut over the last two decades in this category, which probably isn't the way to treat the state's largest economic engine when you're trying to attract talent to it.
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.

...nine years into Barrett’s service as mayor [in the 2013 budget], 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.
That $218 million was unchanged for 2014 in Milwaukee, but that's not the biggest screwjob of a blue city this state has been pulling in shared revenues. The City of Madison's state shared revenues are way less than Milwaukee's, or pretty much anywhere else when you consider it has a population of nearly 250,000, and its home county has nearly 500,000 people.

2014 Wisconsin shared revenues
City of Madison- $6.20 million
Dane County- $3.88 million

City of Racine $25.11 million
City of Green Bay $16.53 million
City of Beloit $16.18 million
City of Sheboygan $10.96 million
City of Appleton $9.74 million
City of Superior $7.60 million
City of Port Washington $2.65 million
City of Oconto $1.77 million

Marathon County- $5.51 million
Chippewa County- $2.55 million
Ozaukee County- $1.68 million

So instead of tying their hands with revenue cap limitations, shared revenue cuts, and underfunding road aids, these numbers indicate that the Legislature could come up with a win-win that would adequately fund growing destination areas like Milwaukee and Dane Counties, without having statewide taxes go to these places. That is by allowing these areas to come up with more tax revenue if they so desire. When tourists buy things, they're paying sales taxes, so why not give our two biggest tourist draws the right to raise their own sales taxes to pay for the extra services that the high levels of tourism require? This also allows for the BS from right-wing world about how "Milwaukee gets all our money" to fall even flatter.

This also could be a workable strategy for Brown County (5th for tourism dollars), which currently doesn't have its own sales tax, but does have a 0.5% Lambeau Field tax that is slated to end next year. And they'd be a logical place to put in such a tax, because why shouldn't that area get a little more funding into its coffers when tens of thousands of people descend on their area 10 times a year for Packer Game Days? Even with that area having its share of Baggers, I bet they'll have a hard time justifying having to raise local fees and property taxes to pay for services that often help people from outside the county.

And we already have a mechanism in place for this type of extra local government flexibility in the Dells-Delton area (which includes 3rd-place Sauk County) and in the Up North Cities of Bayfield and Eagle River. It's called a Premiere Resort Tax, and it is described by the Wisconsin Department of Revenue as
a local retail sales tax which was authorized by the Wisconsin Legislature and is administered by the Wisconsin Department of Revenue. Under law, the sponsoring municipality or other political subdivision may only use the proceeds of this tax to pay for infrastructure expenses within this jurisdiction.
It makes sense- these places don't have a lot of population and don't want to unload the cost of all of the extra services these tourist-driven areas demand on the few thousand people that live there year-round. But why can't we do the same principle to make the large amount of people who spend money visiting Milwaukee and Madison keep those cities in good shape? Milwaukee and Dane Counties have the extra advantage of have a large amount of everyday commuters, suburbanites and others from outside the counties who use the streets and other services on a daily basis, but don't pay a dime toward them.

The shared revenue system works for relatively isolated, smaller areas that don't have a lot of regional interdependence, like much of rural Wisconsin. But it's an archaic concept for a 21st Century metropolitan area that needs to be regionally coordinated, where suburb and city has interconnecting fates. Besides, I thought having locally-generated sales taxes pay for services was preferable to sending statewide taxes to "those people" in right-wing world, so this would work well under that belief.

Unless the righties' real game is to denigrate and mess up the blue-voting cities of Milwaukee and Madison, and to allow their suburban supporters in the 262 to leech off of those cities without having to contribute to their futures. It would be a typical modern-day GOP "have your cake and eat it too" mentality to allow suburbanites and small-towners to feel superior to those cities, but also lets them take in the best of those cities without having to pay anything for it.

Well, they aren't known as Robbin' Vos and Scotty Walker-shaw for nothing, are they?

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