By M.D. Kittle | Wisconsin Reporter
MADISON – Consider this a reminder, a public service message to Madison taxpayers.
Based on the history of taxing decisions, Madison taxpayers would be advised to consider this story a warning.
Remember the seemingly dire fiscal days of late May, when the Madison Metropolitan School Board approved a preliminary $376.2 million 2012-13 budget, operating under the assumption – officials say conservative estimates – that state aid would plummet by about $800,000 in the next fiscal year.
Looking to fill the assumed gap, the board approved a hefty property tax hike of nearly 5 percent.
Board members blasted the state, particularly Republican Gov. Scott Walker, for making deep cuts to state aid. The state, of course, had its own budget troubles, facing a $3.6 billion budget gap in early 2011 before the Walker budget effectively righted the fiscal ship, with the exception of long-term structural debt.
“The sad thing is, if we had more support from the state, and if we had a few more corporations pay their taxes, then maybe we could do more for our kids and the district,” board Vice President Marj Passman said, as quoted in The Capital Times, a liberal Madison news publication. “But that’s not the case, so we had to make some very tough decisions.”
If the sky was falling then, a week later the district was seeing fiscal rainbows.
The Department of Public Instruction released estimates showing Madison’s public school district is expected to receive nearly $12 million in additional state aid in the next school year. The increase, unaccounted for by district finance experts, apparently is due to Madison’s robust increase in its four-year-old kindergarten program, which enrolled 1,800 students.
At a 25 percent boost in state aid, the district is expected to post the fifth-largest percent state aid increase among Wisconsin’s 400-plus school districts and the largest dollar amount increase, according to the Wisconsin State Journal.
Student enrollment in Madison increased by 1,492 students in the past school year, in accordance with the formula.
Under the proposed budget, the infusion in state aid would effectively hold property taxes flat — should the school board hold the line.
So can Madison taxpayers expect some property tax relief?
We’ll get back to you on that one, board members tell Wisconsin Reporter.
“My first thought was certainly going back on the significant amount of tax increase,” Passman said. “We need July to regroup and think about things.”
The board was expected to meet Monday, but the budget was not expected to be on the agenda. Board members won’t vote on final tax levy until October, giving the people in charge of taxpayer money plenty of time to think and dream about spending.
Passman said there are plenty of needs in Madison public education. First and foremost, she said, the district needs to address the borrowing it did to launch the new 4-K program.
Like a lot of school districts, the wish list is long.
“To me, there are two things we can do: One, let taxpayers know we are thinking about them and that we will do something about the tax levy rate and lower it,” the Passman said. “But there are other things we’d like to do that we couldn’t do before.”
Like boost the district’s faltering achievement gap, the board member said. Or maybe maintain and bolster the talented and gifted program. Then there’s the possibility of increasing social studies programming, maybe reintroducing civics curricula.
Board member Ed Hughes doesn’t see complete tax levy reduction.
Federal stimulus money in recent years had cushioned the blow of state aid reductions, declining significantly last year, Hughes said. The proposed 4.95 percent levy increase, before the news of the increased state aid, was in large part due to the loss of taxpayer revenue.
As it stands, Hughes said he is “leaning toward tax relief.”
“I certainly think that will be a part of it. How much I don’t know,” he said, adding that he is cautious about adding programs that would require increased commitments in the years ahead.
Just six days on the job as the district’s interim superintendent, Jane Belmore said the board needs time to study the possibilities.
One tax expert advises Madison taxpayers to be cautious and vigilant about the district’s proposed tax increase, borrowing from famed economist Milton Friedman’s aphorism, that “nothing is so permanent as a temporary government measure.”
“I’m tempted here to paraphrase him and say ‘nothing is so permanent as a temporary tax increase,’ said Scott Drenkard, economist at the nonpartisan, nonprofit Tax Foundation in Washington, D.C.
He cites as proof du jour, a move in Arizona to continue the state’s temporary Quality Education and Jobs sales tax, passed in 2010.
Arizona voters overwhelmingly voted to increase their statewide sales tax from 5.6 percent to 6.6 percent, Drenkard wrote in a recent blog. The measure was endorsed by Republican Gov. Jan Brewer, who argued that the hike was absolutely essential to avoid an impending budget crisis that would lead to cuts in education, health care and public safety. In her words, without a sales tax hike “2012 will be a major catastrophe.”
The measure took effect on June 1, 2010, and Arizona vaulted from a rank of nine in the Tax Foundation’s state and local sales tax study to a rank of three. After accounting for local sales taxes, the average sales tax rate consumers saw in Arizona jumped from 7.92 percent in 2009 to 9.01 percent after the ballot measure.
Many government entities have imposed tax increases to meet a purported budget crisis, but taxpayer advocates say it isn’t often that the tax hikes go away when things improve.
Drenkard offers this warning:
“I would always advise to be wary of a quick fix.”
— Who to Call
Want to let the Madison Metropolitan School Board know how you feel about the district’s budget?