Friday, February 10, 2006

Revenue Restrictions Amendment Would Destroy Local Control (Among Other Things)

The revenue restrictions amendment recently proposed by state Republican leaders is being met with great fanfare on the far right, as expected. The effect of the overly-complex, 2500 word amendment is to radically redefine the nature of local control as it has existed in Wisconsin since the state’s founding in 1848.

This amendment is big. It probably won’t be a really hot issue until next year because it needs to pass two legislatures before being put on the ballot, but its effect would supersede public debates on many of the major local issues facing Wisconsin communities today—from school vouchers to the Milwaukee County parks—by restricting the level of revenue local units can devote to solving those issues.

According to the amendment, local government means “a county, municipality, special purpose district, school district, or technical college district.”

The right will surely try to play up this amendment as a Republican/conservative vs. Democrat/liberal battle. It’s not even close to that. In fact, I doubt the far right Republicans who support this amendment would be able to drudge up any local government official, liberal or conservative, who supports this amendment. (And, just for the record, Scott Walker doesn’t count as a local government administrator—in his mind he’s already a representative of the state.)

In fact, the revenue restrictions amendment would fundamentally weaken local governments by requiring them to abide not only by state-imposed limitations on revenue but also the state’s determination of how local units can go about asking their constituents for an increase in revenue. Relieving local governments of their ability to control their own revenue amounts and interact directly with their constituents on those issues would radically alter the existence of local control in Wisconsin.

In addition to restricting the amount of revenue a local unit can collect annually, let’s run down some of the other restrictive points of the amendment from the local perspective (all can be found on pages 9 and 10 of the amendment text linked to above):

  • No emergency funds are allowed; all revenue collected in excess of the limit—including taxes, fees, licenses, permits, assessments, fines, and forfeitures—must be returned directly to taxpayers
  • Any referendums by local governments to ask their constituents for necessary increases in revenue are categorized by the state as recurring or nonrecurring; if determined to be recurring by the state, the increased revenue is limited to the greater of $50,000 or 15% of the revenue limit prior to the increase
  • If the state imposes a law or administrative rule that financially impacts a local government, the state gets to determine the amount it pays the local government to uphold those mandates
According to the Journal-Sentinel, “local government officials instantly denounced the proposal, saying that it would cripple their ability to provide services at current levels and cope with health care costs that are increasing much faster than inflation.”

Indeed, health care isn’t the only cost rising faster than inflation. Everyone in Wisconsin and the country has seen gas prices, to provide just one other example, skyrocket in the past year alone with no sign of letting up. Gas is a commodity that’s required for local governments to cut the grass, plow the streets, maintain the roadways, collect the trash, or just about any other public works function you can imagine. Is the revenue restriction amendment going to simultaneously require oil companies to restrict the increase in the cost of gas to no more than the rate of inflation? Good luck with that one. And good luck getting your car out of the driveway in the morning to go to work during the next heavy-snow winter when your local government doesn’t have enough revenue to pay for the operation of snow-plows or for the overtime that employees would deserve for working all day and night to keep the streets clear.

This amendment is a destructive one for local governments and subsequently for the fabric of local control that’s been traditionally privileged in Wisconsin. State conservatives will undoubtedly try to package and sell the revenue restrictions amendment as a taxpayer-focused initiative, but in reality it’s so much more than that.

Those who are opposed to the amendment—liberals, moderate Republicans, and local officials of all political stripes—need to avoid getting into the convoluted complexity of the amendment when criticizing it. The message needs to be compact and concise, just like the far right state Republican one will be. Part of this message should be how destructive the revenue restrictions amendment is to traditional local control in Wisconsin. I’m sure, however, there are more.


Anonymous Anonymous said...

What is more local than the taxpayer?

Just curious.

February 10, 2006  
Blogger Seth Zlotocha said...

I figured it was just a matter of time before someone tossed out that line of logic. Unfortunately, it doesn't make any sense.

Governments are charged with promoting the general welfare and protecting the public good for society as a whole--this is something an individual, or a group whose members view themselves as individuals-first, could never do. If we broke our society down into individuals (i.e., taxpayers) there would be no concern for the public at large, which is the very purpose of governments. (See more on my distinction between the individual and the public good here.)

The idea of local control is to keep the power within the smallest constituency possible. Transforming local control to mean the individual controlling her/himself would break up the very notion of constituencies, which are the foundation of our democratic republic.

Additionally, the revenue restrictions amendment does not shift any real power to the individual, anyway. In fact, it shifts much of the power previously held by local governments to the state government--since the state is now the body that determines how local governments can structure referendums, how much local governments can raise in a referendum, and how much money local governments receive to enforce state mandates, among other things. The only real power the revenue restrictions amendment gives the individual is the ability to bring suit against the government if that government does not abide by this amendment--which is a right that individuals already have written directly into the state constitution: "The right of the petition the government, or any department thereof, shall never be abridged" (Article I, Sec. 4).

This individualism argument uses the same type of false logic that pervades the concealed carry debate. You can read more of my thoughts on that in the comments section of this post at the blog "From Where I Sit" if you're interested.

Does that satisfy your curiosity?

February 11, 2006  
Blogger Seth Zlotocha said...

I thought it'd be good to clarify quickly what would constitute truly shifting local control to the individual. I can think of two major ways this could be done.

One measure would be to allow individual taxpayers to determine for themselves how much they pay in taxes each year.

Another less drastic measure would be to allow individual taxpayers the right to dictate directly how the taxes they pay are spent by the government.

I think the problems with both measures are clear. But these would be truly moving local control from the hands of local government into the hands of individuals. Again, the revenue restrictions amendment doesn't do anything near this.

What the amendment does do is eliminate much of the local control local governments previously enjoyed by putting preset limits on the amount of revenue those units can generate--revenue that includes everything from taxes to funds garnered through parking tickets. This fundamental power really doesn't go to anyone or anything else, it's just eliminated.

To make matters worse, all courses of action local governments have to raise more revenue when needed are controlled by the state, as I pointed out in the post and in my last comment. This leaves local governments with hardly a shred of local control. Granted, the local governments can still largely dictate how the limited funds they do have are spent--but because those funds are so severely hampered by the revenue restrictions amendment, local governments will, in practice, have very little control over how money is spent because it will all go toward necessities (and during economic downturns there probably won't even be enough to cover those) with nothing remaining for creating new services let alone improving old ones.

February 11, 2006  
Anonymous Anonymous said...

I think your belief that individuals can't act as anything other than selfish doesn't make any sense at all.

Beyond that, local governments have plenty of control and there is no reason why government at any level has to grow faster than inflation - there simply is NO good reason at all.

February 11, 2006  
Blogger Seth Zlotocha said...

I wasn't suggesting individuals can only act selfishly. What I was suggesting is that no one individual can possible care for the needs of an entire community because there's simply no way they could have the time or foresight to understand the complexities and nuances of an entire society. In other words, it's not that individuals won't, it's that they can't.

That's why governments are necessary--and if governments are necessary, it follows that local governments are important units because they have the most direct contact with and impact on constituents. When was the last time your life was directly impacted by a federal policy decision? Probably rarely, if ever. That's not the case for policy decisions that take place at the local level, whether that's through a municipality, school board, or any other local unit.

The revenue restrictions amendment would take revenue controls away from local governments. If local governments don't have control over revenue, they will have severely less control over services and operations needed to respond to the public good.

Sometimes public revenue needs to grow faster than inflation simply because the cost of providing services isn't dictated by inflation. Local government officials gave the example of health care in their statements published by the Journal-Sentinel and I gave the example of gas prices in my post. These costs, and undoubtedly others, have not followed the rate of inflation, so how can we possibly expect local governments to follow the rate of inflation when they rely on these rising costs to provide necessary services?

What's more, wages don't follow inflation, either. Republicans are trying to assert that inflation is representative of people's ability to pay their taxes. That's not necessarily the case. In fact, wages over the past handful of years have skyrocketed for a small portion of the population, dropped sharply for another small group, and dropped less sharply for everyone in between. See here for the details.

Local governments rely mostly on property taxes for their revenue. Property taxes are charged to homeowners and businesses. What Republican leaders who are proposing this amendment don't want people to know is this: In 1970, residential owners paid 50.6% of all property taxes in the state. Today, that number has jumped to 70%. In other words, homeowners are bearing more of the burden in terms of property tax today than 35 years ago. Why? Because businesses are paying less.

Why don't we change that formula back to 50-50? Well, quite simply, because the business trade group Wisconsin Manufacturers & Commerece--the biggest spending lobbyist group in the state during 2005, outpacing even the dreaded WEAC--are huge supporters of this amendment.

Republican leaders are in the back pocket of the business lobby--and they're pushing this amendment to cover for the fact that the real reason property taxes have risen in our state for homeowners is because they've dropped for businesses.

February 11, 2006  

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