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Elections Have Consequences: Holding Down Taxes

Oct. 13, 2010
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With a tight economy, it’s no surprise that one of the biggest issues in Wisconsin’s gubernatorial campaign is taxes. Voters don’t like tax increases (although they appreciate publicly funded programs like BadgerCare), so the candidates are highlighting their records on budgets as well as their promises about how they’d handle the state’s $2.7 billion deficit.

But are Republican candidate Scott Walker and Democratic candidate Tom Barrett telling the truth about their records?

Walker’s Property Taxes Increased 20% Since 2003

Let’s take a look at Scott Walker’s record as Milwaukee County executive. He’s famously proclaimed that he’s never proposed a budget that included a property tax increase.

Is that true? And if so, how does he manage it?

The truth is that Walker has proposed budgets with property tax increases. In fact, if you check out Walker’s proposed budgets on the Milwaukee County website, property taxes have gone up 19.9% since Walker proposed his first budget in 2003. Back when Walker took office, his property tax levy was $218,708,524. But Walker’s proposed budget for 2011 has a recommended property tax levy of $262,264,740, or a $43 million increase in property taxes over the years.

So how did that happen?

Well, each year, Walker proposes budgets with a property tax levy that matches the previous year’s property tax levy. But Walker’s budgets are unworkable, so the County Board adds in more money to fund necessary programs. Walker vetoes those additions, and then there are enough responsible supervisors to be able to override at least some of Walker’s vetoes. Thus, the tax levy gets raised.

Then in Walker’s next proposed budget, he uses the “enhanced” adopted budget from the previous year as his base budget—not the 2003 level from which he started. The charade starts all over again: Walker proposes an unworkable budget, supervisors add in necessary spending, Walker vetoes those additions, supervisors override his vetoes and higher property taxes are the result.

So property taxes have increased $43 million since Walker has taken office. But for political reasons, Walker forces the supervisors to do the adult thing and craft a realistic budget with added funding.

But there’s a catch: The situation got so bad last year that Walker’s proposed budget for 2010 included $32 million in employee wage and benefits concessions that had never been proposed to the unions and never discussed in any contract negotiations. In fact, over the course of 18 months, Walker’s labor negotiator had come up with a vastly different tentative agreement with the county’s largest unions, but Walker’s proposed budget ignored all of that and the agreement went down in flames. The 2010 budget situation is still unresolved, so Walker has ordered some employees to take 26 unpaid furlough days this year—about a 10% pay cut. Even that isn’t doing the trick, however, since the county will run about $7 million in debt this year.

In Walker’s proposed 2011 budget, the amount of the non-negotiated concessions for employees and retirees is $19 million. Overall, his proposed budget has a $30 million hole built into it from “phantom” savings that probably won’t materialize in the real world. And a Greater Milwaukee Committee analysis found that Walker’s leadership has been so disastrous that the county may consider filing for bankruptcy.

So while you’ll hear Walker crow on the campaign trail about how he’s decreasing the county’s tax levy by $1 million this year, remember that he’s more interested in running for higher office than crafting a realistic budget.

Barrett’s Property Taxes Increased 24% Since 2004

So how does Tom Barrett fare with his city of Milwaukee budget?

The city’s adopted budget in 2004, Barrett’s first year as mayor, had a property tax levy of $199,012,386. His proposed 2011 budget had a property tax levy of $246,752,411. So taxes went up $47,740,025 during Barrett’s tenure, or about 23.9%.

Remember: Walker’s property taxes went up 20%, so the two candidates are responsible for very similar property tax increases. It’s just that Barrett takes the “no drama” approach, while Walker views the county budget as a political document to further his ambitions.

The other point to note about Barrett’s 2010 budget is that he honored essentially the same union agreement that Walker ignored when Walker crafted his fantasy-filled budget for 2010—and for 2011, for that matter. So while taxes did increase, the city had honored its agreement with its workers and managed to find efficiencies elsewhere to make the budget work.

In addition, no multimillion-dollar budget hole is looming over the city as it’s looming over the county. The city isn’t in a budget crisis, but the county certainly is.

State Spending Promises

So much for the past. What do Walker and Barrett pledge to do in the future?

has proposed about $4 billion of tax cuts, the vast majority of which favor big corporations and wealthy residents. For example, Walker wants to cut taxes on the top 1% of earners, which would reduce state revenues by $287 million over the two-year budget cycle; reopen the Las Vegas loophole, which would allow multi-state corporations to avoid paying $187 million in taxes during the biennium; cut capital gains taxes by $243 million; and end taxes on retirement income, regardless of income level, which would reduce the state’s coffers by a whopping $920 million over the course of two years.

And what programs would Walker cut to allow the wealthy to avoid paying their fair share in taxes? Walker has already said he’d cut the wildly popular BadgerCare, which provides health insurance to low-wage workers who can’t afford their employers’ insurance, or whose employers don’t offer insurance. (Who are these employers? Wal-Mart, McDonald’s franchisees and Aurora Health Care have the most employees on BadgerCare.)

has also targeted state employees’ wages and benefits for cuts, a tactic he’s used repeatedly while at the county.

Barrett, on the other hand, has offered up a detailed plan to “put the state budget on a diet” by cutting $1.1 billion a year in state spending. Some of those ideas include pooling local employees together with state employees so they can bargain for better health insurance rates (an idea so good that Walker has swiped it and is promoting it as his own); eliminating the offices of secretary of state and state treasurer; technology upgrades; greater Medicaid fraud detection; and reducing the state workforce, primarily targeting middle managers.


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