12 Apr Debate over Taxpayer Bill of Rights shows need for true tax reform
MADISON – The push to amend the Wisconsin Constitution to restrict state and local government spending is the latest chapter in one of the state’s longest books – the need for genuine tax reform. It remains to be seen whether a “Taxpayer Bill of Rights” is a best-seller or a dime novel, but this policy book will remain open until Wisconsin changes how government raises and spends money.
Republican members of the Legislature are urging consideration of an amendment that would place inflation-based limits on state and local government spending – including school districts – and restrict the revenue that may be raised through taxes. Any spending over the limits would be subject to voter approval in a referendum.
Such an amendment has a long road to approval. It would require passage by two successive Legislatures before it could be placed on the November 2006 general election ballot.
Then again, enacting “TABOR,” the acronym for the Taxpayer Bill of Rights, may not be the end game. Supporters may, instead, be using it as a vehicle to force action on a long list of tax and spending issues.
There have been many blue-ribbon commissions and reform proposals in the past, from the SAVE Commission to the Kettl Commission. While some have produced results on the margin, none have fundamentally changed the fact that Wisconsin is a state that spends and taxes well above average. The 2003-2005 budget passed by the Legislature and Gov. Jim Doyle avoided any increases in state income and sales taxes, but property taxes appear on the rise again after a period of relative moderation.
If the Taxpayer Bill of Rights is an attempt to refocus the debate and review some of the best ideas, then it may have value. As recently as 2002, a comprehensive tax-reform proposal was presented at the Wisconsin Economic Summit by a group that included former Cabinet Secretary Mark Bugher. The Bugher panel called for restructuring state taxes to relieve some of the property and income tax burden while placing more emphasis on sales, fuel and excise taxes. This “consumption tax” approach could invite investment, spread the pain and help to create jobs. It failed to get off the ground, not because of merit, but because it came too late in Wisconsin’s election year.
If the Taxpayer Bill of Rights is an attempt to obscure policy with politics, however, it may even be dangerous.
Republicans pushed for a property tax “freeze” during the 2003 budget debate and it came within a vote of becoming law. The freeze will be a part of their fall 2004 election campaigns. So might TABOR, especially if they can goad Democrats into quickly aligning behind interest groups (local government, the teachers union, health care and higher education) that would be inclined to oppose it.
In Colorado, where a similar amendment passed, the results have been described as disastrous. Even some of the sponsors of the Wisconsin effort have conceded they don’t want a Colorado-style bill. And yet, such a bill could become a self-fulfilling prophecy if a populist campaign turns bad policy into reality.
“It may be a dangerous game they’re playing,” said Bugher, who served former Gov. Tommy Thompson as Revenue and Administration secretary. “They should be careful what they wish for.”
The Taxpayer Bill of Rights would be a formula-driven constitutional amendment that would take all of the judgment – and, thus, a bit of the democracy — out of governing. Wisconsin needs more effective governing, not a plan that puts all decisions on automatic pilot. Lawmakers may do better to address the core issues behind taxes and spending, and to make the toughest choices themselves.
Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.
The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.