My column for the West Bend Daily News is online. Here it is.
“Wisconsin is a tax hell and we are sick of it. The Legislature has made some attempts to restrain government spending … . As I watch the budget process move forward, I am all but certain that the truth will remain: Wisconsin is a tax hell.”
I wrote those words almost 10 years ago in this space while advocating for a Taxpayers’ Bill of Rights. In the past decade, Wisconsin has turned slightly more fiscally conservative, but when it comes to taxes, the state still burns hot. A recent report from Lt. Gov. Rebecca Kleefisch and Department of Revenue Secretary Rick Chandler serves as confirmation.
Gov. Scott Walker tasked the lieutenant governor and secretary with roaming around the state to collect feedback about tax reform. Over the course of 23 roundtable discussions all over the state to which people of varying perspectives and experiences were invited to participate, the report indicates that five familiar themes bubbled to the top as critical concerns.
The first and most common concern was Wisconsin’s incredibly onerous property tax. Wisconsin’s property taxes have consistently been more than 20 percent higher than the national average for decades and accounts for 40 percent of all taxes paid by Wisconsinites. Many property owners receiving their property tax bills this month are seeing a rare decrease in their property taxes thanks mainly to an infusion of $178 million in state taxes into the technical college system and Act 10, but Wisconsin still has higher property taxes than 45 other states and is the worst in the Midwest.
Income taxes were next on the list of concerns. The Republicans have made some small gains in reforming Wisconsin’s income taxes by reducing the number of brackets and the rates, but the income tax remains a big reason why many high-earners seek employment in states without one. Wisconsin ranks in the top 10 states when it comes to the burden of income taxes.
The issue ranking third from participants in the roundtables was the complexity of the tax code. By a margin of 23:1, participants said that they would prefer lower, flatter rates in lieu of a patchwork of incentives, exemptions, credits, deductions and other devices used by politicians to manipulate behavior through the tax code.
Fourth on the list was how Wisconsin’s tax and regulatory burden adversely impacts small businesses. Small businesses are vital for job growth and entrepreneurship in any state. They can also least afford the expensive taxes and regulations that drastically increase the cost of doing business.
The fifth item on the report’s list finally gets to the root of all of the other problems with taxes in Wisconsin: spending. The roundtables’ participants voiced concerns about the efficiency and cost of government. According to the report, they acknowledged that government costs money, but want to ensure that the taxpayers are getting a good value for every dollar spent.
The report that took a year to build certainly confirmed what most Wisconsinites already knew. We live in a state that taxes, regulates and spends too much. What the report failed to do is make any recommendations as to what to do about it. Perhaps that is because the answer is obvious.
Wisconsin should tax less, regulate less and spend less. But if the Republicans really want to move the needle on these initiatives and make Wisconsin truly a leader, they need to advance some fundamental and seismic reforms.
There has already been some talk of eliminating the state income tax completely. The Republicans should do it.
The state should:
■ freeze property taxes and take a chainsaw to the regulatory structure that shackles Wisconsinites;
■ match massive tax cuts with massive spending cuts;
■ abolish shared revenue as Gov. Scott McCallum wisely advocated years ago;
■ cut funding for transportation;
■ reform the criminal code and cut prison funding;
■ cut the lavish funding for the University of Wisconsin;
■ and continue to reform and cut spending on K-12 education.
One of the reasons that Wisconsin’s government has become so bloated and expensive is because it has enough sacred cows to constitute a herd. If the Republicans hunt the entire herd at once, a few of the weaker ones will be separated.
For those who think it can’t be done — that we can’t cut that much spending — hogwash. According to the Kaiser Family Foundation, Wisconsin has the highest per capita state spending in the Midwest and the 11th highest in the nation. Wisconsin’s state spending is 38 percent higher than the national average.
Somehow the vast majority of other states manage to fund their needs while spending and taxing less than Wisconsin. Many of them do it without a state income tax; without shared revenue; with lower property taxes; and with great schools, better roads and a much stronger state economy.
Walker and the Republican leadership have made a lot of consequential changes to the benefit of Wisconsin and its taxpayers. The voters rewarded them with firm control of the Legislature and the executive. Now is the time to truly transform Wisconsin into a national leader, if only they have the courage to act. Audentis fortuna iuvat (fortune favors the bold).
(Owen Robinson’s column runs Tuesdays in the Daily News.)
Mr. Robinson,
Please read this article:
http://hosted.ap.org/dynamic/stories/U/US_MISSISSIPPI_SCHOOL_FUNDING?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT
We do not want to become Mississippi.
Spending adequate tax dollars on education allows our children to grow up to become intelligent, employable assets to our communities. It is our moral responsibility to provide them with the best possible education in order that they may realize their full potential.
The fact that you are advocating for Wisconsin to even move in the direction of Mississippi – is shamefully indifferent to our children, their futures, and the quality of life in our Wisconsin communities.
I hope you will reconsider your position in this regard – that education is not the place to cut taxes.
Rick Ninmann
Rick,
It is arguments like yours that detract from this debate. Rather than discuss the real cost of education and what value the taxpayers are getting for their investment, you immediately set up the standard that any decrease in education funding is an indication that we hate education and will throw our students into ignorance. That’s bull.
The facts are that education spending has increased far faster than inflation or median incomes while the results for that investment have remained stagnant. Consider this: http://jaypgreene.files.wordpress.com/2012/03/inflationadjustedcostk-12achievement2.jpg
So why are the taxpayers continuing to spend more and more on education for the same or worse results? This would indicate that above a certain threshold of funding, more money has no impact on improving educational outcomes. The numbers bear out that Wisconsin is well above that threshold. That means that we could decrease funding for education while maintaining the quality of education. There is no indication that spending $10,000 per kid provides a better education than spending $9,500 per kid. Or $10,500 for that matter. Once education is funded at a certain level, the greatest determinants of educational outcomes are societal and outside of the influence of government education spending.
But as I said in my column, Wisconsin has a lot of sacred cows. This is one of them as you indicate. And folks will come out in vigorous defense of transportation spending, prisons, shared revenue, on and on and on… until there is nothing that anyone is willing to cut except “fraud and waste.” And this is why Wisconsin is a tax hell.
Your call to “cut the lavish funding for the University of Wisconsin” is laughable and displays gross ignorance. Check out this article in today’s Beloit Daily News.
Chancellor stresses investment in university, raises funding concerns
By Hillary Gavan
Beloit Daily News
December 17, 2014 4:00 pm
Rebecca Blank, chancellor of the University of Wisconsin-Madison, spoke about the importance of investing in the university at a Rotary Club of Beloit lunch Tuesday.
Blank said there are two big things required for the state to stay at the front end of a global economy — a skilled workforce and being on the cutting edge of technology and innovation.
“Our big public universities are crucial to the long-term economic competitiveness of the country. We need big public universities like UW-Madison to not just survive, but to thrive,” she said.
Successful economies, she said, grow out of a three-way partnership between the public sector, the business community and educational institutions. One example is how research labs in Madison developed a technology to create an isotope in medical imaging, a boon for the local economy.
Molybdenum-99 traditionally comes from nuclear facilities outside the United States, however, the short-lived isotope was in critical demand. It’s used in about 50,000 clinical tests a day to diagnose internal problems. NorthStar Medical Radioisotope developed a technology to create this isotope. NorthStar, which is planning a Beloit facility, started in Madison based on work done at the university.
NorthStar attracted major private investments and $16.1 million in federal funding for its method of producing Molybdenum-99.
There are now four sites across the United States developing ways to produce Molybdenum-99, and the Interstate-39 corridor in Rock County is home to two of them.
Shine Medical Technologies, which is planning a facility in Janesville, has attracted investors and $13.9 million in federal money for an alternative technique of producing Molly-99.
“These projects will incubate the next generation of companies in this field. Continuous success will require ongoing innovation and research,” she said.
Blank said there are 43,000 students on the UW-Madison campus, with it awarding more than 10,000 degrees each year.
“Many of these graduates will stay right here in the state. They are your future employees,” she said.
Blank said $12.4 billion is the amount UW-Madison and its connected startup companies contribute annually to the Wisconsin economy. UW-Madison also supports 128,000 jobs, which generate about $614 million in state tax revenue each year.
Wisconsin taxpayers, she said, invested $470 million in UW-Madison last year. However the state dollars only fund about 17 percent of its overall budget.
At a time when UW-Madison’s research and education is more needed than ever to boost the economy, Blank said the UW-Madison absorbed $23 million in cuts from the state in 2013.
Two years ago UW-Madison received substantial budget cuts, absorbed by spending down its fund balances to fund programs and services across campus as the state legislature directed.
She said the Board of Regents is requesting a budget increase of $95 million for all UW System schools. But funding for the proposal remains uncertain.
The governor, she said, has announced resident undergraduate tuition will stay frozen in the next budget. Although Blank said she is supportive of free tuition for in-state students, she said she plans to ask the Regents to raise tuition for out-of-state students.
“If we get some additional funds from the state and if we are able to get some selective tuition increases, those dollars will be well invested,” Blank said.
So… your counterargument is that the guy who runs the university and wants to spend more money is saying that he wants more money to spend?
Truth is much like with K-12, the cost of higher education has risen faster than the median income and inflation while not providing any better outcomes. Meanwhile, as a parent of a kid in the UW system, it is obvious to anyone who spends any time on a campus that there is a massive amount of waste. You might even say that their spending is “lavish.”
Earth to Owen! “The cost of higher education has risen faster” in large part because Governors and Legislatures of BOTH parties have backed away from the state’s traditional commitment to higher education. In the early 1970’s, the state paid half the cost of operating the flagship campus; today the amount of state support is less than 15 cents on the dollar.
Why don’t you provide more information about the “massive amount of waste” that you encounter when visiting your child and identify the campus.
Does the state benefit from having a top-tier research university within its borders? It is clear that the state does benefit, far out of proportion to the state’s financial contribution to the campus. Accordingly, we must do what we reasonably can do to protect and preserve it. The newspaper article provides just one example of the value the flagship campus provides to the state. Take that campus away and Wisconsin will look more like Montana or Nevada.
Earth to Badger! Dude, you would have more credibility if you didn’t feel the need to begin every comment with an exclamation insulting others.
And no, the cost of education has risen faster than inflation and median income. Period. Here: http://nces.ed.gov/programs/digest/d13/tables/dt13_334.10.asp
What you are referring to is funding source – tuition vs. taxpayer support. We can have a debate about the appropriate level of public funding, but that does not change the fact that the cost is outstripping all other economic metrics – and without adding any additional value for that additional spending.
To your last point, yes. Wisconsin does benefit from our universities. But just like with other things, we have every right and responsibility to ensure that we are getting an appropriate value. The fact that something benefits the state does not mean that it should get a blank check with no scrutiny or accountability.
But you don’t appear to want to have a serious discussion about this, do you? You just want to insult anyone who gets near your personal sacred cow. As I said before, people like you are who make Wisconsin a tax hell.
BTW, you might also notice from those statistics that the percentage of spending going to instruction is declining. The increase in costs is not coming from the cost of actually educating kids.
You continue to ignore the fact that the last three Governors — two Republicans and one Democrat — made the policy decision to reduce state support and permit tuition to increase at a rate higher than inflation. Much of what you complain about is due to this change in state policy rather than the bad conduct you assume on the part of campus administrators.
You aren’t from Wisconsin and weren’t educated in the UW System, so you have no frame of reference. When you say that the campuses do not produce “better outcomes,” you have no base of knowledge to make such a statement.
I received two degrees from the Madison campus and am the parent of children who received Madison degrees between 2003 and 2007, including professional degrees. The “quality” difference between the education I received and what my children received is significant. By any benchmark, the education delivered today is much better than that delivered a generation ago.
I’m not ignoring that fact at all and that is not what I am complaining about. I am complaining about the overall cost of higher education. The total cost per student is too high and is rising too fast. Controlling the cost and discussing the funding source are different topics.
For someone who has two degrees, you are struggling to get this point.
As for a frame of reference, that is a very small-minded, parochial viewpoint. I have lived in Wisconsin for 15 years and got my Master’s degree here. My wife is born and bred in Wisconsin and got her BS here. All 4 of my kids have been (are being) educated in Wisconsin. The fact that I was not born here does not change the facts that are in front of us. I will assume that you are not qualified to comment on any issues from other states.
You don’t respond to my point on outcomes. How do you measure outcomes and on what is the basis for your conclusion that we do not have “better outcomes”?
What is the “lavish spending” you complain about at your daughter’s campus? Details, Owen.
And you don’t respond to my main thesis. You just keep moving the debate to another point when you lose the last one. By your shift in debate, I can assume that you finally agree that spending on higher education is increasing at a faster rate than general economic or income growth, right? That’s a fact. Now we can debate whether or not that’s a good thing or not and whether or not we are getting value for those extra dollars spent.
How about this… why don’t you show me how educational outcomes have improved in sync with spending increases? I’m not interested in your anecdotal example (the same reason I’m not going to delve into my own anecdotal example)… data. Show me data.
BTW, I do see your point about the debate about tuition. In the context of the original column, I was specifically talking about state funding of the UW system. If the state cut spending on UW, it might increase tuition if the management of UW decided to not cut spending elsewhere to offset the decrease. But my overall point was that UW spends too much and the state can help force them to be more economical by restricting their taxpayer support.
Owen, you flipped your argument from tax money given to the UW to overall cost of education. As a taxpayer those are two different things. State taxpayers have shoulder less and less of the burden in nominal (not to mention real) dollars every biennium for decades. That’s just a fact. So from a taxpayer perspective it’s happening as you want it too. Your other points are valid depending on your philosophy, but the UW argument is not. Oh, and Chancellor Blank is a woman.