Boots & Sabers

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1454, 12 May 23

More spending is not the solution for bad governance

Here is my full column that ran in the Washington County Daily News earlier this week:

After lengthy, private discussions with legislative Democrats and local leaders, including the Democratic leaders of Milwaukee, the Republican leaders of the Legislature have released a comprehensive and intricate plan to reshape the state’s shared revenue program for decades to come. While the reasons for the effort are laudable, it perpetuates a political arrangement in which everybody wins except the taxpayers. It is a bill with fundamental flaws that should be rejected.


Shared revenue is a rather ridiculous Wisconsin state scheme where the state collects a bunch of sales and income taxes and then distributes much of it back to local governments with an archaic formula that nobody likes. This column has long advocated the abolishment of shared revenue in exchange for something far simpler, but there is too much power wrapped up in the distribution of shared revenue for its abolishment to be considered. This bill is a good example of that power being wielded.


The primary objectives of the Republicans’ bill, Assembly Bill 245, are threefold. First, it would provide the largest increase in shared revenue in decades in exchange for municipalities spending that money on law enforcement and first responders.


Second, it would allow the city of Milwaukee and Milwaukee County to ask the voters to raise the sales tax to pay for their unfunded pension liabilities in exchange for making all future employees join the well-managed state retirement system. Third, it would provide a huge incentive program for local governments who innovate by consolidating or combining services.


There are some other things in the bill that are good, like barring local health officials from closing businesses for more than 14 days without approval by elected governments, and allowing local governments a say when the state Stewardship Program decides to buy a slew of land and remove it from the tax rolls, but the grand bargain is more money if local governments do what elected state leaders want them to do.


The first bargain is that local government can get more money if they spend that money on law enforcement and first responders.


The problem with that bargain is that not every community needs more law enforcement. Some communities are declining in population or have overstaffed law enforcement agencies. The goal of this provision is to push back on the defund-the-police movement that has infected our liberal communities, but the solution in this bill would just have state taxpayers pumping money into local communities to pay for services that they have rejected.


The second bargain would allow Milwaukee city and County to ask the taxpayers to jack up sales taxes to pay for their unfunded pension liabilities. The problem the state legislators are trying to fix is that the city of Milwaukee and Milwaukee County have grossly mismanaged their pension obligations to the point that they are underfunded by $1.14 billion and $331 million, respectively. These pension obligations are malignant and starving the rest of their budgets of funding for vital services. The bargain would force these governments to stop making the problem worse by having new employees join the Wisconsin Retirement System and raise sales taxes to pay for the pensions.


The problem is that it is already within these local officials’ power to fix the problem by having new employees join the WRS. They have chosen not to do so. The proposed solution would result in a huge tax increase on city and county residents with absolutely no increased benefit to them. Once again, the taxpayers would bear the burden of decades of political mismanagement.


The third bargain would create a $300 million slush fund for local governments to do what they should already be doing — looking for ways to consolidate and economize services for the benefit of their citizens. Some local governments have already been progressive in this regard, but the additional money would only go to the laggards. Furthermore, if consolidating and economizing a government service results in efficiencies, why would the taxpayers pay more money for it?


Republican legislators are attempting to force local government leaders to do the things that they should already be doing by incentivizing them with more money to spend. This is a government solution, for government, by government. Experience tells us that the restrictions and covenants will eventually be eroded or circumvented, but the spending will remain forevermore. There is nothing so eternal as a government spending program.


Necessity is the mother of invention. As long as the state taxpayers keep bailing out the bad decisions of local government leaders, they will continue to make bad decisions.


1454, 12 May 2023


  1. dad29

    A power play, with “Government Forever!!” as its theme music.

    What else did you expect from Vos?

  2. dad29

    Here’s another proposal: reduce the State sales tax to 2% and let any municipality install their own sales tax, up to a limit of 3%, referendum-approved, of course, and no “must spend here” requirements.

    The reduction of the tax would result in about $2BN less to the State’s coffers. So what?

  3. dad29

    CORRECTION: About a $3 BN reduction to State revenues.

  4. Owen

    Now that’s an idea that I like.

  5. dad29

    Subsidiarity! Drive the decisions to the lowest possible level of governance.

    Sure, Milwaukee will go BK. That’s going to be their problem.

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