My Take on the WTPA

Unlike Senator Robson, I decided to read the legislation and the Legislative Reference Bureau analysis before offering my opinion on the Wisconsin Taxpayers' Protection Amendment.

My take, based on my reading of the legislation and with help of and discussion with legislators and staff, is summarized below.

The gist of the Amendment is such: With the exception of towns whose total revenues are one million dollars or less (a smart exception), governmental units in Wisconsin will be limited to collecting the amount of money they collected in the base year increased annually by the lesser of either the three year rolling average of the Consumer Price Index or the annual increase in Personal Income Growth plus a growth factor.

For the state, a county, a technical college district, or a special purpose district, the additional growth factor will be the percentage increase in population.

For a school district the additional growth factor will be the three year average of the percentage increase, if any, in enrollment in 5 year old kindergarten to 12th grade. If a school district does not have any increase in enrollment, or if they have declining enrollment, they will be held harmless.

For municipalities the additional growth factor will be sixty percent of the increase in property values due to new construction. This limit is based on the current limits in the Expenditure Restraint Program.

Revenue is defined in the amendment as all funds from taxes, fees, licenses, permits, fines, forfeitures, lottery proceeds, tribal gaming funds, and bonds with the exception of economic development bonding like TIF districts, bond refinancing, and short term cash-flow borrowing. This section raised a red flag for me. However, after reading the bill and talking to folks in Madison, my fears have been allayed.

Here's why I'm ok with the carve outs in the definition of revenue. They are very specifically defined and are present for a good reason. First, 'municipal economic development' bonds are defined essentially as TIF districts. These bonds are specifically used for real improvements to property directly related to development and are restricted to that use. This holds true to the intent of the Amendment to grow the economy not inhibit it. Moreover, local voters have a great deal of influence over the TIF process.

Refinancing of bonds is allowed when interest rates drop. This makes sense. It is in the best interest of taxpayers for the state to refinance at a lower rate. It saves them money and should not be discouraged.

Short term cash flow borrowing is often a sound management tool. For instance, local governments and schools use short term loans to pay bills that come due before they receive their state aid payments. The money must be paid back in the same year, and does not increase their revenue or spending ability.So, in a nutshell these exemptions are made to prevent inhibiting development and economic growth and to allow officials to manage government. Thus, diffusing the argument that the amendment is not practical as it pertains to how local governments operate.

There is also a Mandate Moratorium provision which I like. To prevent the creation of new unfunded mandates the amendment provides that, except to comply with federal requirements, the state may not enact any law or administrative rule which requires a local government to spend money unless the state provides the funds to the local government. The legislature needs to do much more in the area of unfunded mandates, but at least this caps them at their current ominous level.

The school revenue limits are a significant improvement over existing law. These limits are indexed from a base year rather than being based on the amount of revenue from the prior year. If a unit of government does not levy up to the limit in a given year, they do not lose any revenue authority in future years, so finally and thankfully there is no pressure to spend up to the limit. However, the revenue limit for any unit of government may be reduced by a majority vote of the ruling body (i.e. a city council, county board, both houses of the legislature, etc.) This will allow frugal governments to make their savings to taxpayers permanent.

The revenue limits may only be exceeded through referendum in a manner determined by the legislature by law. The question for any such referendum must specify whether the increase in the revenue limit will be continual or only for a given time period.

And I really like this provision: The amendment specifies that anyone living or paying property taxes in a given taxing district has standing to bring suit to enforce the revenue limits.

Bottom line: I still have a few more questions and will be talking to folks for the next few days, but I think this is a good, solid, Amendment, one which will protect taxpayers and one which I will support.

The only thing that could erode my support is if hearings on the bill bring up troubling aspects I haven't yet seen. That's what the hearings are for.

It is clear that those working on the bill, namely Senator Grothman and Representative Wood, not only wanted to create an Amendment that worked, but one that addressed potential pitfalls, be they rhetorical, political or practical. I believe they have succeeded.

So now, it's time to LET THE PEOPLE DECIDE!