fedgazette

Lawmakers try to force a lid on state spending

Wisconsin State Roundup

Published May 1, 2006  |  May 2006 issue

If imitation is the sincerest form of flattery, then Wisconsin appears to have a crush on Colorado.

State GOP lawmakers, upset over what they believe is unbridled government spending, have proposed the Taxpayer Protection Amendment (TPA), a close replica of an existing Colorado law called the Taxpayer's Bill of Rights (TABOR). The biggest difference between the two: The Colorado law limits government spending, while Wisconsin's effort seeks to limit government revenue. The effect would largely be the same.

Roughly outlined, the measure would tie state government spending to inflation plus growth in population or personal income (whichever is less). For local governments, it would use alternative measures (for example, the value of new construction, growth of student enrollment) plus inflation. TPA would also limit most fees government charges for services, with the exception of college tuition.

The matter has been proposed previously, though in different forms. Unlike earlier versions—which mirrored the Colorado law more closely—the most recent TPA proposal has a rainy-day fund where excess funds would pool and be applied when the state economy (and tax revenues) lagged below a certain point. The measure would also bar unfunded mandates on local governments—long a point of contention and criticism, even before TPA. Still, local government officials are strongly against the proposal.

In a March report, the nonpartisan state Legislative Fiscal Bureau estimated that state taxpayers could have saved between $500 million and $2 billion in state taxes over 20 years, or possibly as much as 4 percent annually. Wisconsin Manufacturers and Commerce, the state's largest business association, put the cumulative savings at closer to $5 billion. But neither estimate factors for possible ripple effects on such things as out-of-pocket costs (like tuition at state colleges and universities), the quality of services in K-12 education and innumerable other areas predominantly paid for by taxes.

As an amendment to the state Constitution, to become law, TPA first must be approved by the Legislature and then pass a state referendum, which at the earliest could occur in November 2007.

Ronald A. Wirtz

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