Monday, April 4, 2016

Larson's right-higher sales, lower prop tax best for MKE Co

With the presidential and Supreme Court races happening at the same time, one area that hasn’t gotten a lot of attention is what seems to be a close race for Milwaukee County Executive between incumbent Chris Abele and State Sen. Chris Larson. I’m a supporter of Larson, and have generally liked the guy since he worked to get Jeff Plale kicked out of the Milwaukee State Senate district I used to live in (well, except for the time in 2014 where he tried to screw over Ernie Wittwer in SW Wisconsin by endorsing a whiz kid who promptly got beat by double digits in a Dem-leaning district).

And I give Larson credit for having the guts to campaign on a tax restructuring plan that would raise the county’s sales tax by 1%, while dedicating party of that funding for county services like parks and transit, while having another part of it be used for property tax relief. An advisory referendum on this issue was approved by Milwaukee County voters in 2008, but because of the anti-tax pose of a county executive named Scott Walker and a State Legislature that was tied up in dealing with the wreck of the Great Recession, the sales tax never became law. noted the debate on this issue in its summary of a Larson-Abele debate from early March.
Larson defended his sales tax proposal by saying that necessities, such as food, rent, and medicine are already tax-exempt.

"The answer is getting a dedicated funding source," Larson said. "In Wisconsin, we have so many things that are exempt from sales tax." He said most of the things families spend money on wouldn't be affected, "yet at the same time, you would stand to benefit the most by having access to expanded transit and quality parks."

Abele countered that the thousands of MPS families that have to buy school supplies and clothing would still be hit hard….

But Abele offered few details on how he would produce sufficient revenue instead of a sales tax, other than to say he is "drawing down county debt" to sufficiently offset transit and park costs.
The flaw in Abele’s thinking is that he somehow thinks Milwaukee County will continue to receive enough revenue to function in the future, and I don’t know where that happens when the following circumstances exist.

1.The county is already losing $4 million a year in state shared revenues to make up it’s “contribution” for the new Bucks arena.
2.The state of Wisconsin won’t have any additional funds to add shared revenues to Milwaukee in the near future, and might well cut it again as a remedy for the next Walker-caused budget crisis.
3.The current GOP Legislature seems hell-bent on “starve the beast” legislation that limits local communities from raising property taxes to make up the difference for the lack of shared revenues going to needed services.

Add in Abele’s Walker-like pose of refusing to ask for property tax increases, and it means that (barring some miraculous increase in funding urban counties from the federal level) raising fees or selling off assets becomes the only real source of income for a county that still has needs to pay for. Now, maybe that’s what rich boy Abele, his oligarch buddies at the MMAC, and the owners of the Abele-endorsing Journal-Sentinel want, but I have a hard time believing that it’ll lead to optimal results.

This is one reason why Larson’s plan should be considered, as a method of expanding the revenue base. But Larson touches on another reason an increased sales tax in Milwaukee County makes a lot of sense- because Wisconsin has generous exceptions to the sales tax that lessen the blow on poorer individuals. Now, it's true that poorer people in Wisconsin still pay a higher percentage of their incomes in sales taxes, but this isn't as disproportionate as other states because of those exemptions. And any small extra burden of the higher sales tax will likely be offset by the maintaining and possible expansion of services that lower-income people may be more likely to utilize, which I think is a trade-off they'd take

In addition, one of the biggest reasons a sales tax is a particularly worthwhile revenue tool in Milwaukee County is because that county is the biggest generator of tourism dollars out of any county in Wisconsin, with nearly $1.8 billion in direct spending in 2014. Think of all those people from out of town that went to Opening Day at Miller Park today, or head in for Summerfest over those 11 dats, or the numerous other events that a big metro like Milwaukee has. Why shouldn’t those individuals be the ones that pay a little more while they come to town, and save the local property taxpayers some money in the process? Particularly if Larson follows through on his hints that some of this extra sales tax revenue may be targeted for property tax relief (by making it off-limits for spending). Then the higher local sales tax could become a win-win for a large amount of Milwaukee County residents.

In addition, a higher sales tax would insulate Milwaukee County from some of the consequences that will likely come from the State Legislature continuing to handcuff it through shared revenue cuts and property tax limits. Sure, allowing any kind of increased sales tax or relief for the Milwaukee area may be an uphill climb today with the anti-city suburbanites that run today’s Wisconsin GOP, but maybe Larson is playing the long game for when a Democrat becomes governor and Dems have more say in the State Legislature (propositions which seem increasingly likely over the next 3 years). Get a more reasonable and pro-Milwaukee group in power at the Capitol, and they may well be willing to trade approval of a higher sales tax in Milwaukee County for lower aid payments or stricter property tax limits, as it would be a move that could save needed dollars in a state whose budget will get increasingly tighter due to the Fitzwalkerstanis’ fiscal recklessness.

So yes, put me on board with Chris Larson's plan to protect County services by raising the sales tax by 1%, and add it to my reasons to endorse Larson to replace Abele as County Executive. At least Larson is willing to tell the truth that Abele won't- these services cost money, and they aren't going to be able to be upheld under the current system of funding. And if you are serious about keeping the (already-diminished) level of services that we see in Milwaukee County, and you don't want to sell them off to privateers, then there needs to be enhanced revenue sources to pay for them.

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