Thursday, March 02, 2006

Walker's Consistency Problem

Let me just say up front that I haven’t picked a favorite candidate for Governor, nor do I plan on advocating for one over the other. The only thing certain in my mind is that I will be voting against Governor Jim Doyle.

But I have to say that Scott Walker’s attack on Mark Green through his radio ad and machine gun press releases really puzzles me. In Walker’s releases, he rips Green for suggesting that he supports state funding of two-thirds of school costs, then explains exactly why he supports two thirds state funding of school costs.

In doing so, Walker makes claim that can generously be described as misleading. He compares Green’s unwillingness to commit to massive spending increases on public education to Governor Jim Doyle’s first budget, which caused property taxes to increase 12.5%. Walker correctly argues that by limiting increases in state aid to school districts, it caused school districts to make up the lost projected revenue by raising property taxes. What Walker doesn’t say is that Doyle vetoed a property tax freeze out of that budget, which would have held down that property tax increase. It has been absolutely clear that Mark Green would have signed that property tax freeze, and to suggest otherwise is a puzzling and demonstrable falsehood.

Walker is clearly positioning himself as having the State Senator Mike Ellis philosophy of property tax relief; that is, spend more money at the state level so property tax payers don’t have to pony up as much on the local levy. This was the thinking behind the massive state investment in public schools in 1995, engineered by Governor Tommy Thompson, which briefly reduced property taxes, but did nothing to control spending.

I could throw out numbers and stats, but I think it’s safe to say that the philosophy of buying down property taxes at the local level has been a disaster. In fact, it creates massive problems at the state level during slow economic times, since the spending is built in, and revenues can’t keep up. It creates a culture of unaccountability, as local officials blame the state for not giving them enough money and the state blames the locals for being greedy. This line of thinking reared its head today directly from Walker, who now blames Milwaukee County’s fiscal problems on the state for not providing enough funding.

See any taxpayers thanking legislators for their property taxes being so low? Of course not – because property taxes have continued to rise to levels that make the state aid virtually a moot point.

So Walker attacks Green for not pledging to retain two-thirds funding, yet at the same time beats his chest about supporting the proposed Taxpayer Protection Amendment (TPA), which would provide constitutional limits for state and local revenue. What Walker apparently doesn’t realize is that if he supports both two-thirds funding and the TPA, then two-thirds funding will eat up virtually all of the state revenue increase year after year after year. He can’t really seriously be for both. This would be like promising to freeze property taxes in Milwaukee County, then willingly dropping the Ament pension scam into the middle of the county budget to cause the hemorrhaging of taxpayer money.

The last time a budget proposed to maintain two-thirds funding of partial school costs was Governor McCallum’s 2001-2003 budget, which called for $473 million in new spending to maintain the two-thirds commitment. That represented a 4% increase in general school aids spending on a base of roughly $4 billion per year.

If you were to budget for a 4% increase in school aids per year for Governor Walker’s first budget, you’d be looking at an automatic state spending increase of $573 million to maintain two-thirds funding for the biennium (off a $4.7 billion base year of 2006-07).

If state revenue is capped at inflation plus a growth factor, that means $573 million will be out the door before any other budgeting is done, which could be a disaster. Not only could that $573 million eat up the entire revenue increase, it could actually exceed the revenue increase, forcing unpopular cuts in other programs, regardless of merit. Furthermore, public education spending, which is at around 45% of state spending right now, will make up more and more of the state budget as a percentage. Soon, 80% of our income and sales taxes will be devoted strictly to public education.

Aside from the boring numbers, exactly who is advising Walker that he can to win a Republican primary by bragging about how much more state money he’s going to spend? Is he going to try to convince us how much more money property taxpayers can save by spending more state money on local services? A tax freeze is a much better way to go, as it forces tough decisions on spending, it doesn't merely shift the burden and keep the bloated spending infrastructure in place.

Furthermore, the timing of this attack is baffling. Why go after Green on the same day that a huge school choice bill is up in the Legislature? In fact, why attempt a big press hit at all when the Legislature only has a week left? Why not wait an extra week so you get maximum exposure for your charge?

I'm also concerned about the tone the Walker campaign has taken - I received five e-mails from them just today, pretty much each one with the same smarmy tone. Check this out from his campaign manager:

Now I just don't want to behave like the Green campaign and not buttress our arguments with facts, So if you are interested in seeing how it is impossible to back away from 2/3's and hold the line on property taxes, go to the Wisconsin Taxpayers Protection Amendment (TPA, Assembly Joint Resolution 77)

The language on page 8, lines 10 through 18 clearly show that a local school district can increase property taxes to pay for a lose in aidfrom the state. If Congressman Green were successful in backing away from the state commitment to fund two-thirds of school costs, that amount would be shifted to the local property taxpayer.

Um... first of all, showing people a copy of a bill that hasn't been passed yet doesn't really "prove" anything. All it does is "prove" that this is a provision of the TPA that the authors decided to put in the bill.

Secondly, who ever said it would be "impossible to back away from 2/3's and hold the line on property taxes?" In fact, that's exactly what the Legislature tried to do in the past two budgets - give school districts a smaller funding increase, and freeze their revenues so they can't shift the funding to the property taxpayers. Doyle vetoed this freeze in his first budget, and weakened it in his second. If he would have signed either of those budgets the Legislature gave him, he would have done exactly what Walker's campaign manager claims it would be "impossible" to do.

I'm not going to make any grand statements about what this attack from Walker says about the state of his campaign, but it's pretty clear he feels he needs to start making some news. We'll see if it's the news he expected.

UPDATE: There’s an important point regarding the above e-mail from the Walker campaign that I completely whiffed on. Apparently Scott Walker or his campaign manager have completely misread the portion of the TPA that they believe buttress their case for two-thirds funding.

The provision of the TPA they cite says that a local government can increase their revenue to make up for lost revenue if the state cuts their funding. Keep in mind, two-thirds funding and cutting funding are two completely different things. I would bet it has been decades, if ever, since the state actually reduced aids to school districts, which is when this provision would kick in. It doesn’t say that a school district can raise their levy to make up for lost aid below the two-thirds mark.

Apparently Walker believes that if you spend $400 million in new money on school districts and it doesn’t get the state to two-thirds, then school districts could raise property taxes to meet the difference. This is absolutely false.

If this is what Walker is suggesting the TPA should say, then we have some real news on our hands. Walker would be advocating for automatically building in hundreds of millions of dollars in new spending every year into the state constitution, a horrific concept I previously addressed here.