Compared to other states, Wisconsin’s total (state and local) tax burden is lower than it has been since 1962 – 48 years ago! In that regard, the record of Gov. Jim Doyle bests every governor, Republican and Democrat, since Gov. Gaylord Nelson, the Democrat who served from 1958-1962.
Yesterday’s Milwaukee Journal Sentinel did a big spread telling us Wisconsin is no longer a “tax hell.” Meanwhile, the state Department of Revenue has just released a study intended to show how taxes have gone down under Doyle. The two reports are fairly close in their conclusions, though the JS story looks like something that took weeks of work and was planned long before the Revenue Department’s study was released. (The coincidence is probably killing the JS editors.)
The truth is that the tax hell rap was never true. Even when the state ranked much higher in tax burden, under Republican Tommy Thompson in the mid-1990s, this was a misleading statistic. States also raise money from fees, like those for auto licenses, toll roads and college tuition. When all sources of government revenue are considered, Wisconsin has ranked above average but not excessively so.
Still, there is no doubt all of these rankings have declined under Doyle. Wisconsin now ranks about average – 26th in total spending and 19th in total taxes and fees among the 50 states. But when you take into account that other states get far more federal aid than Wisconsin and include the state’s spending of that revenue, Wisconsin now ranks 32nd among the 50 states in total spending, as the Department of Revenue study shows.
When only taxes (and not fees) are considered, Wisconsin has dropped from fifth highest to 14th in the nation. You’d have to go back to Nelson in 1961-’62, when Wisconsin ranked 16th, to find a lower ranking, as the state study shows.
But statistics don’t matter if people feel overtaxed. As I noted in a Milwaukee Magazine Endgame column a while back, the most hated tax is the property tax, and the second-most hated is the income tax. And we rely heavily on these two taxes, a point reiterated by the JS story.
I think we need to consider putting more reliance on the sales tax and less on the property tax. As a recent story in NewsBuzz noted, Wisconsin is far behind other states in the broadness of its sales tax and taxes only 76 of 168 items taxed in other states.
Part of the Wisconsin approach, as the JS notes, has been to rely on taxes that fall less heavily on poor people. But the sales tax has exemptions for food and necessities (that would remain even if the categories taxed were broadened), which makes it far less regressive.
The truth is that Wisconsin isn’t just nice to poor people but to tourists, who would pay a portion of road tolls (if we had them) and sales taxes. Thus, we subsidize Illinois and its grossly high sales taxes and tolls, and the flatlanders get a sweet deal in Wisconsin.
The obvious conclusion the JS muffed (by editor fiat?) is that a Democratic governor is largely responsible for the reduction in the state’s tax burden. The story mentions tax cuts, school spending restraints and municipal spending restraints as the key factors in the decline of the tax rating. But the school spending restraints were passed in 1993 and the indexing of the state income tax in 1999, yet the state still ranked fifth in tax burden in 2002 when Doyle was elected. The municipal spending restraints were passed in 2005. Yes, Republican legislators pushed for this, but they felt no need to do this when Thompson was governor and spending pretty freely. Moreover, Doyle signed the municipal spending restraints bill.
For that matter, consider the question of business taxes. Wisconsin has ranked comparatively low in total business taxes ever since Democratic Gov. Pat Lucey pushed for the massive machinery and equipment exemption on business property taxes in the 1970s.
My point is not that Democrats are fiscal conservatives but that Republicans aren’t. Some years ago, I requested data from the nonpartisan Legislative Fiscal Bureau analyzing spending by year going back to the 1960s. What it showed is that governors from both parties spent about the same, with exception of Republican Lee Dreyfus. The Revenue Department study shows the same thing, with a look backward at nearly 50 years of tax burden rankings. Other than 1980-81, when Wisconsin ranked 12th under Dreyfus, the state always ranked in the top 10 and generally in the top five in comparative tax burden. (It looks like spending may jump the most when either party has control over both the governorship and legislature.)
So now Scott Walker is running for governor, arguing that Doyle has been a big spender. The reality is that Doyle has been considerably more frugal than Thompson, and Walker as a legislator voted for Thompson’s budgets. But reality doesn’t always have a lot to do with political campaigns.
Does UWM’s Chancellor Want Out?
UW-Milwaukee Chancellor Carlos Santiago is a restless guy. A year ago, he applied for the job of chancellor of Florida International University and withdrew only after it appeared that an inside candidate had the votes to get the job over Santiago.
This year, Santiago met in January with the search committee at Drexel University in Philadelphia, which was hiring a new chancellor. Santiago says he was told he was on the list of finalists but decided to withdraw. Perhaps, but there was no confirmation from Drexel as to who was going to be on the list of finalists.
“These opportunities do come around,” Santiago told the UWM Post. “I’m very selective as to who I talk to.”
Of course, he could just turn them all down. The fact that he doesn’t suggests Santiago wants out. Could money have something to do with this? He currently earns $307,355, plus $20,000 annually from the Argosy Foundation. The Florida International job was expected to pay $680,000. The Drexel job paid in excess of $1 million. Both jobs would have meant a massive raise for Santiago. Is this a factor in his selectiveness as to which offers to pursue?
Only the chancellor knows the answer to this, but one thing seems clear: Santiago is looking to leave UWM and move up the ladder of academia.
The Buzz
-Speaking of UWM, the plan to greatly increase (by 30 percent) the number of graduates from the UW System (with the lion’s share coming from UWM) is a major proposal that deserves discussion. The idea of increasing the number of college-educated people in Wisconsin is a good one, but how do we know this won’t simply increase the brain drain of graduates leaving the state?
-And did anyone notice the irony of the race for Waukesha mayor? In defiance of all the science, challenger Jeff Scrima contended Waukesha, with its disappearing, radium-tainted wells, shouldn’t need to buy water from Milwaukee and bashed incumbent Larry Nelson as too pro-Milwaukee for pushing this idea. So Scrima wins, but it looks quite likely he’ll have to pursue the Milwaukee water option anyway. Lesson for all Waukesha politicians: The facts don’t matter, just run against Milwaukee and you’ll win.
-And Prince Fielder wants how much from the Brewers? Enough for a ticket out of town, says the Sports Nut.
