No Runny Eggs

Well, I guess the honeymoon between the presstitutes in Wisconsin and Jim “Craps” Doyle (WEAC/Potawatomi-For Sale) is over. Today’s Journal Sentinel has as its banner headline the fact that the Crappy budget has, according to the non-partisan Legislative Fiscal Bureau, $1.74 billion in tax and fee increases, broken down thusly:

– $1.37 billion in tax increases:

• $506 million from jacking up the cigarette tax from $0.77/pack to $2.02/pack.
• $417 million from jacking up taxes on the sick
• $272 million that Doyle wants to stick on gasoline sold outside of Wisconsin (that is, if he can get away with not allowing the oil companies to pass along the proposed 2.5%-of-value tax on every gallon of oil used in Wisconsin to Wisconsin consumers)
• $142 million put upon those of you trying to dump your properties as you flee this tax hell through a doubling of the real estate transfer fee (assuming, of course, you can find suck…er, buyers)

– $376.2 million in fee increases:

• $167.9 million in a massive across-the-board increase in vehicle registration fees
• $37.2 million in a near-doubling of the fees for driver’s licenses and photo ID cards

Damn, but it looks like the Pubbies were right when they said last month that it was a $1.7 billion tax increase. Just how big is that? The last sentence of the story starts the thinking, but since the Journtinel couldn’t bring itself to give a percentage, and because public schools tend to de-emphasize math, allow me to run the numbers. It is a 6.78% tax increase over 2 years, or if you prefer it by annum, 3.33%. That is not, repeat, NOT including the “automatic” increases built into the income and sales tax structures that essentially match both inflation and increases in pay. That is in addition to those increases.

But, wait, there’s more. You remember the Craps Anti-Tax Freeze that expired at the end of last year? Doyle wants to bring that back, sans lower jaw (it already lacked teeth). Instead of allowing property tax increases of 2% plus growth and borrowing, he wants 4% plus growth and borrowing. That, folks, is more than what it had gone up prior to the original CATF. Senate Minority “Republican” Leader (dunno whether I should put that last word in quotes yet like I did for the three previous “permanent” holders of that title) Scott Fitzgerald points out that the property taxes that are driving people out of Wisconsin would go up by $350 million this year if CATF Ver. II happens (it would go up about that amount without it as well). Half of that increase would happen under the expired original anti-freeze, but since Fitzgerald only talked about this coming year, you can essentially add that entire amount to the $1.74 billion (actually, a bit more because it’s exponential) to come up with a $2.1 billion tax increase.

However, Christian Schneider, the sole survivor of the death of Dennis York, does. He’s putting his new bully pulpit over at The Wisconsin Policy Research Institute to good use, whacking the idea that raising taxes to coerce a desired behavior is a good thing. He even shows a few flashes of the dearly departed York and Pork in that piece.

(H/T – Nick)

In order to give instant gratification to the fine folks of the Town of Oregon that were screwed over by the Department of Revenue on their 2006 property taxes to the tune of at least $578,000 through an error in the equalized assessed values of the properties in the town, the Legislature is fast-tracking a “no-interest” loan program.

What happens when the DOR screws up that equalized assessed value? In three words – taxes go up. Longer explanation – there are three potential ways the taxes go up. First, there is at least the potential for a reduction in state aid to the property-taxing authority, and taxing authorities being the charter members of the Party In Government they are, tend to refuse to cut their plans of spending accordingly. This affects the entire taxing district negatively, not just the portion in the directly-affected municpality.

Second, in property-taxing districts that include other municipalities, the ratio of the equalized assessed value in the municipality where the value was inflated to that in the municipality (or municipalities) where the value was not inflated. This automatically inflates the tax bill in the directly-affected municipality, while artifically reducing the tax bill in the remainder of the district.

Finally, under the now-expired Craps Tax Anti-Freeze, the various property-taxing authorities had the authority to increase taxes by the value of new construction. If the value of new construction was artifically inflated by the DOR, guess what? The authorization to further jack up taxes just showed up fraudulently, and knowing the PIGS that are the taxing authorities, they wouldn’t pass up this opportunity. To be fair, this would also have happened under the various versions of the Republican tax freezes that were vetoed by Doyle.

The current “fix” for an error in the calculation of equalized value that results in a higher-than-otherwise-allowed property tax bill is to have the DOR to adjust the following year’s equalized value downward in the hope that that tax bill will be lowered by the amount that it was “mistakenly” raised. Since the equalized value is frozen months before the budgets of the various property-taxing authorities, and thus their mill rates, are set, it is merely a hope on the part of the DOR that they got it right the second time.

Becuase this imperfect relief comes late, the Legislature got this bright idea to create a mechanism for a no-interest loan to those affected by a major foul-up by the DOR (one that is at least 10% high) in the form of AB-20. In short, it gives the affected property owners a more-or-less exact relief in the form of a no-interest loan from the state through the taxing municipality at the beginning of the year, with the amount of that loan added to the tax bill at the end of the year. In theory, the current “fix” outlined above pays off the loan with no additional money coming from the taxpayer. Unfortunately, since that relief is imperfect, if the DOR doesn’t get it right and the year-end relief is less than the loan, guess who has to come up with the money?

On to the reason why this bad fix is headed on the fast track. The fraudulent overtaxation of the fine folks in the Town of Oregon that spurred this “fix” was a result of an error on the part of the state Department of Revenue back in August 2006. At that point, they certified that the property in the Town of Oregon was worth $47 million more than the amount at which should have been certified. Take a good look at that date. That is roughly 3 months prior to the date the state figures out how much aid to give various units of local government, and 4 months prior to the date those governments set their budgets and determine their mill rates. You mean to tell me that, in those months between the foul-up by the DOR and the fraudulent increases in the tax bills, nobody figured this out?

A major part of that fraudulent tax increase is blamed on the effect of that foul-up on the school district’s levy; in fact, the linked Milwaukee Journal Sentinel story focused solely on that. Since the school district also includes the Village of Oregon, there are two parts to that; the reduction of state aid to the district, and the change in balance between the property values in the town and those in the village. Color me cynical, but both the new “fix” and the existing “fix” sure seem to only address the latter, and the folks in both the town and the village just got screwed.

So, what’s the fix? First, don’t wait 5 months to double-check those equalized values. In this case, if the DOR would have caught this in early October, none of this would have happened. Next, instead of guessing how much relief is going to occur in the portion of the district that was screwed the previous year, implement an actual amount and dun those that improperly got a break (be it the state or the property owners outside the directly-affected municipality) appropriately. Then and only then can the “instant gratification” loan work.

In case you’ve been in a cave the last 2 days, I have some good news and some bad news for city of Milwaukee property owners (of which my dad is one):

The good – The city of Milwaukee forgot to include an additional $9 million tax increase requested by Milwaukee Public Schools.

The bad – MPS isn’t going to forego the money, and instead of sending out a special assessment to immediately collect that money, the city is going to borrow it so that the $9 million will turn into $14 million or so once interest is figured in.

With the re-election of Jim “Craps” Doyle (WEAC-Potawatomi/For Sale) and the takeover of the state Senate by the ‘Rats, the not-so-little piggies known as WEAC are jumping right to the head of the line to increase their cut of higher taxes. If I weren’t so late to this party, I would be pointing out how the average public school teacher in Wisconsin took home 20% more money in 2003 than the average Wisconsin worker did in 2005 like Dad29 (this for working 20% fewer days), or how the public school teachers get Rolls Royce benefits at almost no cost to them like Peter (numbers not reflected in salary), or even how the total compensation package goes up a guaranteed 3.8% per year like Owen (if the rank-and-file don’t see that money, they really need to talk to their union and their union-owned Rolls Royce benefit manager).

Imagine my shock when I opened up today’s Milwaukee Journal Sentinel this morning and found this headline – Median property tax bill in state up $7. Instead of the pap and self-congratulations both parties heaped on each other for this latest increase contained within (I’ll get to that in a minute), let me bring in a quote from Jim “Craps” Doyle (WEAC/Potawatomi-For Sale) when he created his expiring tax anti-freeze, as carried by that very newspaper – “‘The result of the freeze that I will sign will be that the average property tax on the average home will not go up at all next year, and will actually go down $5’ in December 2006.” So, where’s the $5, Jim? Better make that $12, because they’ve gone up an average of $7.

Republican Assemblyman Dean Kaufert, the incoming Assembly co-chair of the Joint Finance Committee, didn’t exactly cover himself in glory by calling that “laudable”. What’s laudable about another record property tax intake of $8,700,000,000?

As for the excuses for the high property tax intake, let’s take a look at them:

• Homeowners pay about 70% of all property taxes, according to the Legislative Fiscal Bureau. – What a canard. Even if 100% of the property tax levy were shifted to businesses, the people of Wisconsin will end up paying nearly 100% of the property tax levy in the end.
• Wisconsin’s public schools must largely rely on property taxes. Of the $8.7 billion total property tax levy, $3.7 billion – or about 42% – will go for public schools, Schmiedicke said. – Wait a minute; I thought Craps was having somewhere north of 60% of the costs of schools paid for by the state. I don’t know if it’s 2/3rds anymore, but assuming that it is, we’re spending $11.1 billion on schools, for what?

  One more thing about the $3.7 billion. That’s $200 million $550 million less than the $3.9 billion $4.25 billion Dem Senator Jon Erpenbach wants to jack up sales taxes by to replace the school property tax. Jon, you mean to tell me that the state needs more than 5% just to manage this, and we have to give the counties somewhere north of $500 million more in the process?

• Wisconsin has more local governments, which levy and spend property taxes, “than all but the largest states, such as California and Texas,” said Todd Berry, president of the non-profit Wisconsin Taxpayers Alliance. – Guess it’s time for some consolidation
• The Legislature has refused to let local governments levy local-option sales or income taxes, said Andrew Reschovsky, a University of Wisconsin-Madison economics professor. – And for that, I’m thankful. It’s bad enough that counties, a couple stadium boards and the idiots that run the Midwest Airlines (soon to be AirTran Airways) Center get to levy sales taxes.

Matt Thomas has all the details, including an update from one of the 2 aldermen who voted to not rob the taxpayers blind. To sum it up, the city of New Berlin, after finding out how much the School Tax Levy Credit was going to be, used that money to justify increasing their budget despite direction from both the state Department of Revenue and the Legislative Fiscal Bureau to not consider that money as revenue for the city (or any other taxing authority). Thomas, who is Vice President of the New Berlin School Board, was not informed by the city that this credit had increased before the New Berlin Common Council meeting last night, where the budget was adopted, despite the city knowing since no later than November 22.

If any of you Photoshop geniuses can do Matt a favor, he’d like a pic of Chiovatero/Swiper/Robin Hood/Fonzie jumping a shark.

Instead of working to comply with a federal law that makes collecting sales tax on internet access charges illegal, 2 different groups are looking at adding more items to the sales tax roll, both to allegedly relieve property tax pressure. Before I explode both plans, as well as the Journal Sentinel call for taxing absolutely, positively everything (with the exception of newspapers), haven’t we tried this before, with the state promising 2/3rds funding for schools? That wasn’t all that successful, as the spend-and-taxers on school boards realized that they just tapped into a bottomless pit.

First, Dem State Senator Jon Erpenbach wants to tax everything except the “necessities of life”, which he and the linked Journal Sentinel story defines as including food, drugs, health care services, shelter, and agricultural products (remember this list, I’ll come back to it later), so that the state can assume full funding for schools. That is a $3 billion/year sales tax increase. Erpenbach wins the Stupid Quote of the Day Award for uttering this gem, “Most everybody, at the end of the day, will have more money in their pocket.” The ONLY groups that will have more money at the end of the day are, in order, the school districts, builders of schools, WEAC, administrators, and teachers. The last vestige of restraint on spending, the risk of running everybody out of town because of skyrocketing property taxes, will be gone.

Erpenbach also wins the runner-up for the Stupid Quote of the Day Award for not saying the corollary to this quote, “For every exemption that was handed out, there was no cut in spending.” Logically, that corollary is, “For every new item taxed, spending will increase by at least the amount taken in by said new tax.”

Next, the Wisconsin Counties Association wants additional sales tax revenue to avoid having to slow down their massive spending appetites. They’re whining that local governments only got 14.8% of all state spending in the current budget, down from the 27% of all state spending they got in the 1989-91 budget. Cry me a river; I’ll lay dollars to donuts that 14.8% this budget represents more money than 27% in the 1989-91 budget. I’ll even throw in a quarter or two for a donut hole that it is greater even after adjusting for inflation. Even if it doesn’t, why in the hell should somebody up in, say, Tomah, pay for, say, retiring Milwaukee County DA E. Michael McCann’s enhanced pension (that’s right; unless I missed something, McCann never signed away one dime of the enhanced pension).

In any case, they want what they term a $700 million/year sales tax increase, with that money diverted to the counties, so they can continue to do stupid stuff like give lavish pensions. Unlike Erpenbach, they actually list their targets – computer, legal, personnel, architectural, engineering, and surveying services, advertising, management consulting, public relations, accounting, beauty salons, barbershops (that’s funny, I paid sales tax on my last haircut), and health clubs. You can safely add another $50 million to the individual counties that levy the 0.5% county sales tax, because I doubt they included that little kicker in there.

Those are the same taxes that Erpenbach wants to raise and divert to schools. Guess the counties will just have to “suffer” with the $250 million in additional sales taxes they’ll get from levying the 0.5% county sales tax (assuming, of course, the Craps’ Department of Revenue coughs up the dough; have they caught up on what they owe the counties yet?).

WCA executive director Mark O’Connell also wants in on the Stupid Quote of the Day competition; he spews out, “We continue to believe that we can tax-cut our way to prosperity when, in reality, the wealth-makers of tomorrow are more interested in a quality of life. If we wish to create a sustainable solution for Wisconsin’s future, we should be investing in our communities, making them attractive to smart young people.” Hey dummy, have you looked at where the jobs are being created lately? It’s not high-tax Wisconsin.

However, they’re both pikers compared to the Journal Sentinel’s Steven Walters and Bob Veierstahler. Walters stresses again and again that they’re “exemptions” and that eliminating them could bring in $3.9 billion per year. He sure seems to want to go one step further and raise the actual rate, pointing out that it was last raised 24 years ago, then whines that nobody in the Capitol wants to do so.

Veierstahler put together a “helpful” chart of exemptions, and what is shocking is what’s included:

– Food, right at the top of the list – Erpenbach and the WCA don’t even want to go that far.
– Fuel – Guess Veierstahler doesn’t think either the gas taxes or gas prices are high enough.
– Sales to state and local governments – Nothing like taxing oneself to inflate the numbers by $228 million.
– Live game birds and clay pigeons – I’ll lay even more dollars to donuts that Veirstahler doesn’t believe there is an individual right to bear arms enshrined in both the state and federal Constitutions.
– Admission to elementary and secondary school events – Well, at least that might cut down a bit on the violence at MPS basketball games.