Tuesday, June 5, 2018

It can't be ignored any more - local governments being "strangled" under big govt WisGOP rule.

Local officials have been drawing attention to the funding issues that have resulted from a state-mandated system that seems to have failed to keep up the realities of the 2010s. This system forces the property tax to be the main source of locally-generated revenue, and since coming to power in 2011, the Wisconsin GOP has put a lower ceiling on how much the property tax can be raised in a community in an attempt to keep those taxes low. But at the same time, the WisGOPs have refused to make up the difference in state aids, which means that local governments often don’t have as much money as they need to maintain services.

The Wisconsin Policy Forum recently looked at this issue, and noted that there is a noticeable difference across Wisconsin communities based on how much new development has happened in those places. Revenues can frequently only be raised by the amount of new construction that happens in a community in a given year, and if the community isn’t growing, then the WPF notes that some of its services suffer.
Policy Forum researchers separated the state’s cities and villages into four categories according to new construction growth. From 2011-2016, cities and villages with the highest growth – over 1.5% net new construction annually – increased property tax levies by a median of 17.9%, while the slowest-growth municipalities increased levies by just 3.2%. The report found that total municipal spending patterns mirrored levy growth, with the highest-growth municipalities spending a median 18.3% more, while the lowest-growth communities spent 3.9% more.

Although levy increases and total spending patterns mirrored total new construction growth, spending priorities differed by the rate of development. For example, while all municipalities increased spending on public safety, transportation spending varied depending on new construction growth, with the highest increases in communities with medium-low and high development.

Significantly, the report shows spending on economic development increased substantially more in high-growth municipalities compared to lower-growth areas. Low-growth communities decreased development spending by a median of 3.1% while spending in high-growth areas doubled.

Levy limits appear not to have constrained communities of any growth rate from maintaining spending on core services, such as public safety. But, the report cautions, a lack of new construction, and the additional property tax revenues that come with it, may be making it difficult for low-growth municipalities to spend more on programs to attract development. Conversely, high-growth municipalities have been able to increase levies, and spending, due to that growth. The analysis does not prove that levy limits are hampering economic development in some communities, but cautions that as these trends continue, they may contribute to a growing gap between high-and low-growth municipalities.
Which leads to a self-perpetuating cycle, where communities that can pay for extras and economic development get the added business that allows them to invest even more in those amenities. But the communities that haven’t grown have little way to dig themselves out of the hole. Given that a majority of Wisconsin cities and villages have lost population since 2010, which is when the tightest of the levy limits have been in place, that makes for a lot of places that are being deinvested.

Last week, Jerry Deschane of the League of Wisconsin Muncipalities hosted a roundtable that was broadcast on Wisconsin Eye. The title was telling: “Strangled by Levy Limits: Local Decisions in Cities and Villages Impacted by Levy Limits.”

Here’s some of the video from that discussion, and I’ll also include some highlights from the LWM’s press release that accompanied the program.

In response to a question, Deschane stated he would ask League members to stop being so diplomatic when they talk with candidates about this topic. “For years, citiesand villages have been making it work. It’s time to start telling the stories we told today. Municipalities need a more diverse revenue system, a more locally controlled system and that’s the question for candidates.”

In South Milwaukee, with a baseoperating levy of $10,774,142, the city was allowed to increase their spending under levy limits by just $9,688 last year according to Mayor [Erik] Brooks. When asked what the impact on his city would be if there were no changes, Brooks stated “You worry about all the things that governments do.... That problem neighbor you have whose lawn is a foot tall, we may notget to it as often and now its two feet tall. It may not be a draconian cut, but it’s a little slice here and there and it all adds up.”…

The City of Clintonville is a smaller community illustrative of many Wisconsin communities who, in an effort to be responsive to their citizens and retain services, are more and more dependent on borrowing. “We’re working very hard to lower our tax rate and we are looking primarily at our debt load. We’re down to bare bones. We can’t make some of the improvements that we need,” City Administrator [Sharon] Eveland said and she went on to talk about delays in needed road repairs.

Mayor Brooks concluded by saying, “Residents expect a level of service, I want to deliver that level of service but I can’t. We need flexibility and support from Madison to deliver that level of service.”
This lack of flexibility helps to explain the explosion in wheel taxes that have hit Wisconsin, resulting in state residents shelling out nearly $14 million more to register their vehicles over the last 6 years. It's either that or even more potholes and cuts in other services beyond what we are already seeing.

This is where I remind you that Wisconsin Republicans are using $48 million in tax dollars in this budget to prop up the state lottery, just so they can say "your property taxes may be $2 less than in 2014." I'll also remind you that a bill that would allow local governments to put in a 0.5% sales tax earmarked for road repairs has also been buried in the GOP Legislature for several years. A local city or town sales tax would make out-of-towners to pay for some of the roads and other services that they use, instead of putting all of the burden onto the residents of the community.

But Republicans don't seem to care much about dealing with that reality, and allowing the freeloading to continue. Which means that if you want to see local Wisconsin governments start to fill the potholes, have other infrastructure upgrades, and have parks and other amenities that make communities worth living in, you'll have to get new people in charge at the Capitol that will take the handcuffs off of those communities. The current system of "grow as much as possible to increase tax base" is causing a two-tier situation that benefits an increasingly smaller amount of Wisconsinites, while most of the rest of are falling behind. It's gotta go.

1 comment:

  1. I came over here to post a link to that Facebook video. I need to check-in more often.