Thursday, March 02, 2006

Questions Raised about Revenue Restrictions Amendment

At the public hearing on the revenue restrictions amendment yesterday a list of 23 specific questions was delivered to legislators at the public hearing on behalf of municipalities from around the state by the Wisconsin Alliance of Cities.

These questions were an attempt to clarify how the amendment would deal with issues such as bonding, collective bargaining negotiations, budget projections, the lack of an emergency fund for local governments, among many others.

What this list of specific questions really tells us is that even a 2500-word amendment cannot possibly be expected to deal with the complexities and nuances of local public finance from year-to-year. Instead, there is an absolute need for governmental flexibility when handling fiscal issues—the type of flexibility that would be permanently eliminated under the revenue restrictions amendment.

But what is really shocking is not that the abnormally lengthy constitutional amendment leaves so many question marks, but rather that the authors of the amendment would pass it in spite of these noted pitfalls.

Take the bonding issue, for example. The way the amendment is currently structured, governments must consider any bonds they take out to be a part of the total revenue generated for the year.

The problem with this is that bonds are taken out for expensive items like major transportation improvements or the construction of a new police station. Governments don’t pay for these items in cash, just as most individuals don’t by a house with cash. Also, most individuals don’t consider the mortgages they take out on their homes to be income for that year; similarly, governments normally don’t consider bonds to be part of revenue. But, again, that is the expectation of the proposed amendment.

Even Todd Berry, president of the fiscally conservative Wisconsin Taxpayers Alliance, exclaimed that the bonding proposition “doesn’t seem to be in keeping with basic accounting and economics.”

Nevertheless, according to a Wisconsin State Journal article from last week, amendment co-author Sen. Glenn Grothman would still prefer to pass the amendment as is rather than change the bonding issue. He admits that changes might be made to the bonding provision, but only in order to allow the amendment to pass the legislature.

It seems Grothman and other proponents of the amendment would rather see it passed than see it positively impact the fiscal situation of governments across the state. If there ever was a clear picture that this amendment is not about helping the fiscal situation of governments or the public, this is it.

The conservative Republican legislators who proposed and support this amendment are so beholden to special interest money from lobbyists at Wisconsin Manufacturers and Commerce along with the extreme ideology of groups like Americans for Prosperity that they would pass an amendment despite knowing that it would negatively impact governmental units across Wisconsin.

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