Wisconsin Barely Passes Lukewarm Taxpayer Bill of Rights Out of Committee

Published September 1, 2004

The room was full of shocked expressions at the July 27 hearing of the Wisconsin State Senate. Why? Because I was testifying against their proposed state Taxpayer Bill of Rights (TABOR).

For six years, I’ve been working to pass a Taxpayer Bill of Rights for Wisconsin. For the past six to eight months, while Wisconsin’s own tax revolt has given us the momentum, I’ve been working harder than ever.

Under considerable political pressure from a conservative (and substantial) primary challenger, Senate Majority Leader Mary Panzer (R) finally did the right thing and called for the legislature to pass a Taxpayer Bill of Rights. However, the version voted on was not mine, but a watered-down version, which passed the Senate Judiciary Committee 3-2 on the 27th. No vote, however, was ever scheduled in the full Senate.

For me, this could have been the culmination of six years of work. According to state law, a constitutional amendment has to be published no later than three months before the next November election. That meant we had to pass it two, maybe three days after the committee vote. The Senate had exactly one week to get it done, and I was sitting on the only draft. The only draft that had already had a public hearing. The only one that had been vetted. The only one that had received more than superficial debate.

I didn’t really expect to get a vote on my version, and it was quickly clear that I wouldn’t. Instead, the Wisconsin legislature was going to push through a different version, something that had been put together in less than two days.

But that’s not why I opposed it.

A real Taxpayer Bill of Rights will protect the taxpayer. The draft we talked about in the Senate would not.

The Senate version had no protection for local governments: It would allow the state to cut local aid, just to pad its own budget. Local governments would then raise our taxes to make up the difference, because the Senate draft doesn’t require a referendum on tax increases.

The Senate version also had no protection against mandates: The state would simply shift programs and spending onto local governments.

The Senate version allows the legislature to exempt certain funds and spending. For example, the legislature could move more than $4 billion in federal moneys off-budget–redefine it so it doesn’t count toward the spending limit–but the state’s spending authority would remain the same. The state could spend $4 billion more, but appear to be spending the same amount. We could then raise our taxes to bring the budget back up to the spending limit. The state has dozens of funds and revenue sources: This game could be played with all of them.

Local governments would take advantage of a similar loophole by creating new tax and fee districts, like drainage districts, storm water runoff utilities, mosquito districts, etc. They’d be able to shift spending to these new districts, which aren’t subject to the limits, but still retain their original spending authority. They’d then raise taxes to bring their spending back up to those limits. They’d keep the spending they’ve always had, and get still more money to spend on other things.

The Senate version allows governments to “bank” any unused spending authority for future years, which would result in dramatic single-year tax and spending increases. The state government would be able to transfer this unused spending authority to other governments, who would then raise taxes to spend it.

This constitutional amendment from the Senate Judiciary Committee is full of loopholes. It would not protect the taxpayer. Government would be open for business as usual.

On the other hand, passing this constitutional amendment would mean a great deal. It would end any chance of passing a real Taxpayer Bill of Rights.

Imagine if this had passed both houses of the legislature. Next year, the legislature will meet again, and there would be pressure to pass it a second time (a constitutional amendment has to be passed twice, followed by a statewide referendum).

There would not be any chance to change it. That would be starting all over. Passing this would suck all the momentum from the issue. We would not have a real chance at constitutional tax reform for many years to come.

Worst of all, the taxpayer would not be protected. I will continue to push for my version, over the Senate’s.

Frank Lasee ([email protected]) is the Republican representative for the 2nd Assembly District in Wisconsin. His Lasee’s Notes can be found on the Internet at http://www.legis.state.wi.us/assembly/asm02/news/newsletter.html. This column is reprinted with permission from the July 29 Lasee’s Notes.