Assembly Democrats in Wisconsin were feeling rejected—again—after Republicans dismissed their version of property tax relief, just before the GOP’s $100-million property tax cut plan passed in the Assembly with bipartisan support.
What Assembly Minority Leader Peter Barca (D-Kenosha) didn’t point out in his news release taking aim at the Republican leadership is that the Democrats’ property tax relief plan, proposed in October, was predicated on taking tens of millions of dollars of federal taxpayer money to expand Medicaid, something Gov. Scott Walker (R) has said he will not do.
“Today Republicans refused to work in a bipartisan fashion to benefit Wisconsin’s middle class, actually lower property taxes, help seniors who want to stay in their homes, put $100 million into the rainy day fund, create thousands of health care jobs and give health care to 85,000 more of our citizens,” Barca said in a release. “Instead Republicans decided once again to choose partisan ideology over common-sense solutions for Wisconsin’s middle class.”
Thanks, but we’ve got our own plan, Assembly Republicans said, pushing forward the bill Walker laid out in October before he sent it on a special-session fast track through the Legislature’s Joint Finance Committee and easy final passage in the Senate, 82-12.
The Republican bill provides property tax relief by increasing the amount of general school aid from $40 million in the current fiscal year, to $60 million in the next.
‘Cuts Key to Growth’
“Tax cuts are a key to economic growth in Wisconsin,” said state Rep. Keith Ripp, (R-Lodi) in a celebratory statement. “There is no greater day for a legislator than when we get to pass legislation that allows Wisconsin families to keep more of their hard-earned dollars. It is the tough fiscal decisions we have been making for the last four years that allow for us to do this today.”
Walker and crew have transformed a $3.6 billion budget shortfall in early 2011 into a better-than-expected surplus of $759.2 million at the end of the 2012-13 fiscal year.
The Democrats’ plan would have used federal taxpayer money to help pay for the property tax cut, according to the nonpartisan Legislative Fiscal Bureau. But although the proposal would have delivered some more pocket change to middle- and lower-income property taxpayers, it would have done so at the expense of higher-value properties, which are generally subject to significantly higher property taxes.
A Legislative Fiscal Bureau analysis of the Democrats’ proposal shows every “improved property” owner, anyone with a home or structure on a parcel of land, from property valued at $50,000 to $10 million, would have realized $45 in savings.
Relief Based on Values
Under the Republican bill, the relief increases with the value of the property. In short, the Democrats give everybody the same tax cut, no matter the value and no matter the taxes they pay on their property, whereas the Republican plan provides rising relief based on property value.
The Democrats would have paid for their $218 million plan by doing what Walker has said he won’t do: Take millions from the federal government to expand the state’s Medicaid program. According to the fiscal bureau, that works out to about $26.5 million in the first year, and $92.5 million in the second year.
Democrats also wanted to increase the income eligibility for Medicaid for non-elderly, non-pregnant, childless adults and for parents and caretaker relatives of dependent children under 19. They would have used Medicaid expansion money to provide health care coverage to non-elderly childless adults with incomes up to 133 percent of the federal poverty level.
Income Determines Enrollment
Walker’s medical assistance initiative, included in the 2013-15 budget, enrolls individuals at or below the federal poverty line into the state health system, and moves those at 101 percent to 200 percent of the level to the Affordable Care Act, or Obamacare program.
Democrats have ripped the Republican governor’s refusal to take some $4.4 billion in “free money” from the federal government to expand medical assistance in the Badger State, charging that, under Walker’s initiative, thousands of low-income residents will be stuck without health care coverage. Walker has countered that depending on a federal government $17 trillion in debt is not fiscally prudent, and that more Wisconsin residents will be covered under the state and federal systems.
Democrats say they would plug $100 million into the state’s reserve or rainy day fund during the next two years, too.
The robust surplus enabled the state to bolster the reserve fund by $153 million, upping the account to $280 million. That’s the highest it’s been in years, but well below the 3 percent to 5 percent cushion recommended by budget watchers.
For all his complaining, Barca ended up voting for the Republican property tax bill, joining all but 12 Assembly Democrats in doing so.
Used with permission of Watchdog.org.