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Despite their organizational muscle and media bullhorns, the opponents of the Taxpayers Bill of Rights (TABOR) find themselves in an unenviable position. While they continue to raise a host of objections, they are stuck with having to make three basic arguments:
First, they must convince the public that taxes in Wisconsin are not high enough and that state and local governments cannot be expected to live within their means. More specifically, opponents will have to argue that, even though Wisconsin’s taxes are 12.8% above the national average, spending should continue to be allowed to grow faster than our ability to pay.
Second, they must make the case that we should trust politicians more than voters to restrain spending.
And third, they must argue that it is not necessary to restrain the growth of government spending to attract more jobs and investment in the private sector.
There are, of course, other objections to amending the state constitution, including issues of local control, the rigidity of the limits, the effects on public services, and cautionary lessons from Colorado. But, ultimately, the debate on TABOR will turn on the questions of taxes, trust, and priorities— and whether Wisconsin needs a
fundamental change in its political culture. Here is the context for the debate:
• In June, the Bloomberg Wealth Manager rated Wisconsin dead last—the worst state in the entire country—as a place for retirement; and second last in overall personal wealth friendliness.
• In July, new figures from the Census Bureau showed that Wisconsin ranked 5th in total state-local taxes as a share of income, down a notch from fourth in 2000.
• Despite—and, in part, because of—massive state aid to local governments and school districts, property taxes in Wisconsin are 27% higher than the national average while state income taxes are 34.5% higher.
• New studies suggest that Wisconsin taxes more because it spends more. State and local governments spend 7.7% more than the national average, while our personal income was 2.8% below the national average. Put another way, former state budget director Richard Chandler estimates that state taxpayers pay $2.4 billion a year more than if Wisconsin limited its spending to the national average. (See accompanying article.)
• State and local government spending now consumes 21.4% of the state’s personal income, compared with a national average of 19.9% and a regional average of 19.6% in 2002.
• A year after the defeat of the property tax freeze, local school districts raised taxes by an average of 7.3%, the largest increase in a decade. More than half of the school districts that raised taxes increased their levies by more than double the rate of inflation. Nearly a third of them had double-digit increases; only 12% held the line or cut their levies. Much of the increase went to feed rapidly growing fringe benefit programs, which continue to devour ever larger portions of school budgets.
• In the City of Milwaukee, despite high profile attempts to freeze taxes by both Mayor Tom Barrett and County Executive Scott Walker, the average taxpayer saw an 8.7% increase in their tax bills, largely as the result of a 13% increase in the tax levy for Milwaukee schools.
To read the complete report click here: Trusting the Public: The Case for a Taxpayers Bill of Rights