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Press Release

Wisconsin: It’s the Spending, Stupid

02/20/2004

In today’s tenuous economy, Americans are working harder and longer to maintain their ideal of a quality life. Wage increases are smaller and the dollar doesn’t seem to go as far as it used to.

This perception is not some figment of irrational thought or driven by a pessimistic media, the truth is that America’s spending power is being eroded by the increased size of government and governmental spending.

The dirty little secret is that no one wants to talk about is when the increase in government spending exceeds the taxpayer’s growth in income, we all get a pay cut.

Consider this, federal spending has increased at an astonishing rate, climbing from 18.4 percent of GDP in 2000 to more than 20 percent of GDP in 2004.

During the past 10 years, spending by state and local governments in Wisconsin has exceeded inflation and growth in personal income by more than $20 billion.

According to the Wisconsin Taxpayers Alliance, “total taxes paid by Wisconsinites in 2003 were $53.84 billion, or 33 percent of personal income.” Prior to 1930, the total cost of government was less than 10 percent of personal income.

Over the past decade, the average annual increase in spending by local and state government was more than double the inflation rate of 2.8 percent.

Those hardest hit by government’s increasing consumption of our personal income are senior citizens who have to struggle to survive on a fixed income. In 2004, Social Security beneficiaries will receive a 2.1 percent increase, while local taxes increased by an average of more than 6 percent annually during the last three years.

It’s disgraceful how free-spending politicians choose to fund extravagant health and pension programs for public employees while seniors are forced to cut their modest standard of living.

While increases in government spending above growth in personal income are a national problem, Wisconsin’s spending excesses are devastating. In the tax year of 2002, Wisconsin had the third highest state and local tax burden in the nation.

Wisconsin is a tax hell headed towards economic ruin if the runaway spending increases are not curtailed.

The solution lies in a proposed constitutional amendment that is working its way through the legislature. Known as the “Taxpayer Bill of Rights,” the amendment would limit state and school district spending to the prior year's budget, plus the rate of inflation, plus population growth. For counties and local governments, spending growth will equal the prior year's budget, plus the rate of inflation, plus new building — not assessed value growth.

Support for spending restraints on government in Wisconsin is extremely strong. According to a recent poll by Wisconsin Manufacturers & Commerce, the state’s largest business group 74 percent of those polled said they would back an amendment to the Wisconsin Constitution that would limit government spending.

While the widespread support for a Taxpayer Bill of Rights is good news, the downside is that there isn’t a concise definition of what it is. This opens the door for the big spenders to pass a watered down version with less restrictions on the level of allowable spending increases or to exempt education from the equation.

The public must be informed that a toothless Taxpayer Bill of Rights will not solve the problem of out-of-control taxation. Politicians will be tempted to pander to their constituents if they can get away the false claim that they passed legislation that sounds good but does little to curb tax increases.

There has to be a very well organized grassroots campaign to educate state residents and motivate them to put pressure on their legislators to pass a real Taxpayer Bill of Rights that limits government spending increases to inflation plus growth — period, no tricks.

There will be fierce opposition from the teacher and public employee unions who will distort the facts and claim that spending controls only favor the rich. They will lie and use scare tactics claiming that controls on spending increases will devastate education, weaken police and fire protection, and eliminate essential services such as garbage collection.

Most of all, they will create the falsehood that a Taxpayer Bill of Rights forces massive spending cuts on an under-funded public infrastructure.

Residents of Wisconsin must unite to fight this propaganda war and demand an end to the tyranny of excessive taxation.