March 16, 2005

Doyle Vetoes Wisconsin Property Tax Caps

For the second time in three years, Wisconsin Governor Jim Doyle has vetoed legislation that would have imposed caps on the growth of local property taxes. GOP lawmakers are threatening to keep on passing tax cap legislation until Doyle stops vetoing it.

Doyle is right. Property taxes are certainly high in Wisconsin, but given the state's dire financial straits it's important to come up with a solution that will provide tax relief to those who need it without breaking the bank.

Tax caps are not that solution. Artificial caps on growth in tax revenues is problematic for two main reasons.

First, these caps give tax breaks with no consideration to a homeowner's ability to pay-- basically asserting that no one, at any income level, can afford to have their property taxes grow beyond a certain rate. This is baloney. We know that property taxes are a lot more burdensome for low-income homeowners, taking a much bigger share of their income on average. This free-handed approach to tax cuts obviously costs a lot more than targeted tax relief alternatives such as a circuit-breaker or a homestead exemption.

Second, tax caps restrict the growth of revenues with no consideration for needed growth in spending. Lawmakers ought to be able to decide how much services they wish to provide, and then figure out a sensible way to raise enough revenue to pay for those services. With tax caps, it's a lot harder to lawmakers to come up with the money to fund education and other services. Of course, that's what the anti-tax advocates who support tax caps are counting on. But if Wisconsin lawmakers are going to scale back government (and I'm not saying they should), they ought to do it in an honest way that lets them evaluate the spending side and the tax side with as few arbitrary constraints as possible.

There's a lot of debate about the long-term impact of California's Proposition 13 tax cap. But the two most frequently cited effects are (1) less property tax revenue means public schools got a lot worse and (2) to some extent, impoverished local governments went and found other non-tax revenue sources to help provide services. Neither of these are really defensible as policy goals.


At 10:16 PM, Anonymous Anonymous said...

You're an idiot. How much do you pay in property taxes and how much is your income?

At 10:35 PM, Blogger Matt G said...

Dear Anonymous,
1) I live in Washington DC, which imposed a tax cap this year. I benefitted lots from the cap. I said it was wrong before the city Council enacted it-- testified before them to that effect, in fact--and still say it's wrong right now.

2) You gotta explain a little bit what makes me an "idiot." Even one complete sentence would do. Can you manage that?

At 3:15 PM, Anonymous Anonymous said...

I disagree with your position, but then I disagree with the entire concept of property taxes based upon market value, which is always speculative, and as a result unfair to some, and causing a windfall of luck to others. A more accurate way of assessing property taxes would be based upon a proportionate share concept. In practice this would be the square footage of an owners home and land divided by the square footage of all homes and land in the applicable taxing districts. This resulting percentage would be multiplied against the budget for the taxing districts and the resulting number would be the homeowners property tax. The person with 20,000 combinded square feet of land and home would pay more than the person owning a more modest 4,000 square foot home and land. This concept is not only fair, but accomodates what I percieve as your belief that the wealthier should subsidize the less wealthy. Presumeably, and I believe accurate in practice, Americans try to buy the biggest and best that they can afford, always striving to improve and better themselves. As a result there is a direct relationship with wealth and square footage. Those who can afford more will generally buy more (house and or land).

At 9:31 AM, Anonymous Anonymous said...

We recently retired to Wisconsin. We knew the taxes were high, but to see taxes jump $500 to $600 a yr. is absolutely absurd. How can you expect to keep people in this state, expecially retires under such circumstances? Something has to be done other than raise our taxes to the point of making people live in poverty. The small town we live in already has some of the lowest hourly wage jobs around. High taxes are not the solution.

At 12:35 PM, Anonymous Anonymous said...

I agree. We moved here from Colorado and were unaware of the property tax difference. In colorado we had a newer home with the same square footage and paid around $600 a year in property taxes we moved to wisconsin have a 100 year old home that cost about $30,000 less and our property taxes are more than double $1800 a year and we only have a 1300 sq ft house barely a yard. I find this whole situation ridiculous. And then the state of wisconsin wonders why they cannot keep people in this state. That sure is a hard one to figure out. And as far as the schools around here are concerned, we have 4 children all school age and have had nothing but problems since we moved here. And it is not just our kids that seemed to be having problems. So if you ask me our tax dollars and not being well spent not to mention the schools are constantly asking us parents for more money. We are a one income family so that our children can have a parent at home at all times but I will tell you this...if we dont start getting some relief we will have to move from the state of wisconsin.

At 6:04 PM, Anonymous Anonymous said...

do any of you have any idea how a vacant land owner in Wisconsin can get arround the high cost of taxes?

I know at one time Wisconsin had a system to make the taxes for land owners exempt or something like that.

This land is not farm land just recrational land. 125 acres at 3000 dollars a year is insane. Wisconsin bites on taxes - know wonder illinios owns wisconsin. they have the jobs and we have the land!


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