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A taxing situation: Walker, Barrett battle over Wisconsin's 'Tax Freedom'

By   /   April 23, 2012  /   No Comments

By Kirsten Adshead | Wisconsin Reporter

MADISON — Gov. Scott Walker and Milwaukee Mayor Tom Barrett sparred Monday over whether the current administration’s policies have benefited taxpayers — even as a financial expert says it’s too early to know the effects of tax changes.

Winning the “economics” message may be crucial for winning the June 5 gubernatorial recall as polls consistently show the slow-to-recover economy is a top issue for voters this year, and a Marquette Law School poll indicated last month that 71 percent of registered voters in the state believe the economy has gotten worse or stayed the same in the past year.

Half of respondents in the Marquette poll, however, approved of Walker. Forty-three percent disapproved, and 7 percent were undecided.

The poll of 707 registered and soon-to-be registered voters had a margin of error of 3.8 percent.

Walker’s staff Monday released a $1 billion list of savings for taxpayers that they said have resulted from the implementation of Act 10, the law passed last year that curtailed collective bargaining for most unionized public employees.

“I want to commend the local leaders of school districts, villages, cities, and counties who rolled up their sleeves and put our reforms to work for them,” Walker said in Manitowoc, according to a statement from his press office. “They are finding innovative ways to be more efficient, while still maintaining and improving services. This is just the beginning. We are turning things around, and this is a fantastic start.”

Barrett, one of the Democratic frontrunners vying to face Walker in the recall election, responded by noting in a statement that the employment report last week indicating that Wisconsin shed 4,300 private-sector jobs in March.

"What Walker isn't telling the people is that he made the deepest cuts to education in Wisconsin history, our state lost nearly 1,500 teacher positions over the past year, and we still have a $140 million budget deficit even though Walker raised fees on the people of Wisconsin by $110 million,” Barrett said in a statement. “This isn't a record to brag about — its (sic) a record that causes failed governors to be tossed from office."

Barrett did not note in his statement that 43 percent of the public school staff cuts, totaling more than 2,300 employees, came from school systems in Janesville, Milwaukee and Kenosha. Those districts did not use the so-called tools of Act 10 — increased teacher contributions to pensions and health insurance — that saved most other public school systems money.

A Legislative Fiscal Bureau report earlier this year projected Wisconsin could face a $143 million budget deficit when the current biennial budget ends in June 2013. Those projections have fluctuated, including a $72 million surplus last October.

Working the numbers

Among the savings Walker lists: $220 per student saved in school districts that reported competitively bidding out their health insurance plan, and $2 million the Department of Corrections has realized by limiting overtime.

Among Walker’s earliest legislative achievements, thanks in large part to Republican majorities in the state Senate and Assembly, were tax breaks for businesses  — part of Walker’s “Wisconsin Is Open for Business” plan aimed at improving the state’s business climate.

It may be too soon to know, though, the impact of Walker’s policies on taxes.

The governor last week cheered a report indicating a drop in property taxes last year, saying “For the first time in over 10 years, the average property taxpayer will have more money in his or her pocket than the year before.”

Walker, though, is playing with the numbers a bit, like his predecessor Democratic Gov. Jim Doyle did, said Dale Knapp, research director for the nonpartisan Wisconsin Taxpayers Alliance, which reports on tax issues.

Overall, property taxes were up 0.2 percent last year, Knapp said.

Walker reported that the total tax bill on the median value home dropped last year by $11 to $2,951.

That 0.4 percent dip includes the fact that property values dropped last year, with the value of the median home declining nearly $4,000, from $161,300 in December 2010 to a value of $157,600 in December 2011, according to the preliminary report.

“We are both looking at the same property taxes, just through slightly different lenses,” Knapp said.

As for the business tax cuts, Knapp said, because they were phased in, "You’re going to see the impact as you go out through 2013, 2014, 2015, etc.”

Wisconsin’s tax burden  — the amount of taxes relative to personal income  — hovers in the 11- to 12-percent range, depending on what is included in the calculation and how the economy changes.

Late freedom

Wisconsin reached its “Tax Freedom Day” on Saturday, the day Badger State residents have earned enough money to pay off their total tax bill — federal, state and local taxes — for the year, according to the Tax Foundation, a conservative-leaning organization that aims to educate people about “sound tax policy” and the level of tax burden they face.

“People like the benefits of government … but sometimes they forget about all the different types of taxes they pay,” Tax Foundation economist Mark Robyn said.

The Tax Foundation estimates Wisconsinites’ state and local tax burden as 11 percent, above the national average of 9.8 percent and fourth-highest in the country.

Higher taxes mean a later Tax Freedom Day, and it took Wisconsin longer than 39 other states to reach that milestone, Robyn said.

“This is designed to be kind of an all-encompassing, easy-to-understand (indication of) how much individuals are paying,” he said. “And it’s really up to them to say if they’re getting their money’s worth from the government.”