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Conservatively Speaking

State Senator Mary Lazich (R-New Berlin) represents parts of four counties: Milwaukee, Waukesha, Racine, and Walworth. Her Senate District 28 includes New Berlin, Franklin, Greendale, Hales Corners, Muskego, Waterford, Big Bend, the town of Vernon and parts of Greenfield, East Troy, and Mukwonago. Senator Lazich has been in the Legislature for more than a decade. She considers herself a tireless crusader for lower taxes, reduced spending and smaller government.

Bad economy affects property tax bills

Taxes


Wisconsin
’s system of collecting income and sales taxes to send back to local governments and school districts to provide property tax relief has been in existence for close to 100 years. When the economy is good, the system works well. When the economy is poor, like the current recession, municipalities and taxpayers are affected, and this December will be a perfect example.

The Wisconsin Taxpayers Alliance (WISTAX) examined the state property tax relief system and found that during fiscal year 2007, of all state-local revenue collected, 60.5 percent was collected at the state level and only 39.5 percent was collected at the local level. Meanwhile, state spending comprised only 41.8 percent of all state-local expenditures. Local governments spent 58.2 percent.

As WISTAX writes, “Put another way, state government accounted for 60.5% of all revenue collected here but only 41.8% of all spending. Conversely, local governments raised only 39.5% of total revenue but did 58.2% of all government spending. Either way (60.5 - 41.8 = 18.7 or 39.5 - 58.2 = -18.7), there was an 18.7 point gap between where monies were raised and spent.”


Here is a statistic you may not know. According to WISTAX, Wisconsin’s percentage of state aid to local governments, 32.2 percent, is the eighth highest in the nation. During fiscal year 2007, Wisconsin spent about $1,776 per capita on local aid, more than any other category of spending.

The state spent $1,714 per capita on K-12 education, $1,311 per capita on public welfare, $866 per capita on higher education, and $76 per capita on highways during fiscal year 2007.

The nature of our century-old system is that if the economy is struggling as it is currently, state government is almost forced to cut local aid. What does that mean for taxpayers? There most certainly will be an impact on December property tax bills.

WISTAX correctly concludes that during an economic downturn as incoming revenues to the state decline, the grim climate pits state against municipalities. State officials point to the drop in revenue while local officials claim tied hands because aid is inadequate.

The horrible exclamation point on this analysis is emphasized by WISTAX as it writes, “The irony is that, despite the state’s considerable commitment to ‘buying down’ property taxes with state aid, Wisconsin’s property tax burden relative to income remains ninth highest in the U.S.

The nonpartisan Tax Foundation in Washington D.C. reports that during fiscal year 2006, the latest year the Census Bureau published state-by-state property tax collections, Wisconsin’s combined state/local property taxes of $1,443.98 per capita ranked #11 nationally.

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