• WisPolitics
3/25/2009

Property taxpayers to shoulder the burden for schools

By Michael Ellis, Luther Olsen

Despite all his self-congratulatory rhetoric that he “protected schools” in these harsh economic times, the fact is Governor Doyle didn’t lift a finger to help fund K-12 education. Instead, he foisted the responsibility completely onto property taxpayers. He even took a massive infusion of federal stimulus money that could have been used to both increase funding for schools and provide property tax relief and instead used that money to reduce the state funds going to support education.

Once again, Doyle left Wisconsin taxpayers holding the bag.

For the first time since revenue controls on schools were instituted in 1993, the state is not participating even a dime in property tax relief.

School district revenue controls were designed to provide property tax relief while still allowing Wisconsin’s schools to keep up with inflation. Under the controls, schools are allowed to increase revenues – defined as state general aids and the property tax – on a per-pupil basis. The allowable increase has generally been tied to the rate of inflation since they were first imposed.

In addition to the effect of limiting property taxes simply by virtue of the controls, because of the interaction between general state aids and the levy, the revenue controls provide a mechanism for increased property tax relief through increased state aid.

For example, if the allowable increase statewide for schools is $240 million – the current estimate by the Legislative Fiscal Bureau – and if the state increased general aids by $160 million, property taxes statewide could only increase $80 million (80 + 160 = 240). If the state increased general aids by $200 million, however, property taxes could only increase by $40 million.

In fact, in 1994, the state actually froze school property taxes statewide by increasing state general aids by $150 million – the entire amount of the allowable increase at the time.

Furthermore, if the state were to increase general aids by an amount higher than the allowable increase, under the revenue controls school property taxes would actually be reduced statewide. If Governor Doyle truly cared about allowing schools to increase spending while at the same time looking out for the school property taxpayer, he could have done exactly that in this budget. Instead, he pulled a bait-and-switch on taxpayers.

As noted, the estimated allowable increase for next year is $240 million. Governor Doyle is also proposing to spend $277 million in federal funds to supplement general school aids. He could easily have kept general state aids at the current base level and used the federal dollars to fund the allowable increase under the revenue controls. Had he done that, property taxes for schools would actually have gone down by $37 million.

Talk about a win-win. Schools would be allowed to continue to keep pace with inflation and school taxpayers would actually have seen a cut in taxes. In this harsh economy that relief couldn’t have come at a better time.

But what did Doyle do instead? He used the $277 million in federal funds to replace existing state dollars for general aids, but kept the total state general aid amount the same as it is for the current year. The end result: property taxpayers will have to pay for 100 percent of the $240 million allowable increase for schools at the same time the state will cut its own spending by $277 million.

And that’s only the beginning of higher school property taxes under the governor’s budget. The budget also includes provisions that will allow districts to exceed the revenue controls – in other words, increase taxes beyond what the limits allow – for school safety expenditures, for school nurse compensation and for transportation costs.

Under Doyle’s budget, the taxpayers will shoulder more and more of the burden of schools. For years, the state had a legal obligation to pay for two-thirds the cost of schools. Although that is no longer a legal obligation, it should remain a target. At least, it is a benchmark to see how far we have retreated from state support under Doyle. State support for schools will drop to 62 percent under this budget.

This is shocking mismanagement of the state budget and mistreatment of beleaguered property taxpayers. Despite all his overheated rhetoric about how difficult this budget is and how deeply he cut spending, according to the Legislative Fiscal Bureau, Governor Doyle’s budget actually increases spending by 7.7 percent. On top of that, he is raising taxes $2.9 billion and Wisconsin is receiving some $3 billion to $4 billion in new federal spending. Even worse, despite billions and billions in higher taxes and new federal funds, Doyle’s budget actually leaves a $1.5 billion structural deficit in the 2011-13 biennium.

Mike Ellis of Appleton and Luther Olsen of Ripon serve as Republicans in the Wisconsin State Senate.
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