Wednesday, April 05, 2006

Ghost Riding and the TPA

Supporters of the Wisconsin Taxpayer Amendment are angry and confused. In concept, it's so simple: limit government growth to our ability to pay. They can't understand why it is so hard to get a Republican legislature to agree to that simple premise. Why on earth wouldn't a legislator support something favored by so many citizens?

Here's why:

When I read this news brief the other day, I thought of the Taxpayer Protection Amendment:

Waukesha - A 16-year-old Waukesha boy was injured while "ghost riding" and run over by his own sport utility vehicle, police said today. Jacob J. Vertcnik was traveling north on Avalon Drive near Sunnyside Drive when he put the vehicle in neutral and climbed onto the hood of a 1997 Ford Explorer, said Capt. Mike Babe. As he sat sideways on the hood, passenger Joshua T. Ferber, 18, also of Waukesha, thought the SUV was moving too fast on the incline and used his hand to hit the brakes, Babe said. Vertcnik then slid off the hood, fell in front of the vehicle and was run over.
Republicans are about to get run over by their own constitutional amendment.

When the TPA was first introduced on Valentine's day, Republican leadership was there to brag about how much work went into it, and how well thought out the whole thing was. In the two and a half months since those original press conferences, we have learned several things.

First, we learned the TPA didn't exclude the Miller Park stadium district, which would make it impossible to pay off the bonds earlier if needed. An amendment to the plan was immediately promised to take care of this.

Then, we learned that apparently sewerage districts are included under the revenue limits when they shouldn't be. The "oversight" was blamed on a "drafting error." Of course, sewerage districts such as MMSD are subject to federal clean water requirements, yet would have to go to referendum to bond to meet these requirements. If a referendum failed, then the state would be obligated to pay for whatever upgrades the system needed. If that's the case, why would anyone ever vote for a referendum, if they know the work is going to be done and the rest of the state is going to be paying for it? So apparently we now have an amendment to fix that.

Then we learned that the TPA contradicted the current constitution by disequalizing school districts. In other words, the current constitution calls for districts "as nearly uniform as practicable." The TPA would allow rich school districts to grow at a much faster rate than poor school districts, which directly contradicts the current equalization formula that is supposed to level the playing field for these districts. (I have hammered Senator Mike Ellis in the past, but he gets it exactly right with this column - except for his plan to "fix" school financing.)

Now we get a substitute amendment to TPA that is pitched as a "technical" amendment that makes the aforementioned changes for the Milwaukee Stadium district and changes the types of fees the legislature can exempt from the revenue limits. Tucked deep within this amendment, however, is this change on page 10, line 22:

(12) This section takes precedence over any other provision of this constitution that conflicts with this section.

Folks, this is getting ridiculous. That one sentence completely flips the entire system of funding schools on its head. It would turn the TPA not only into a constitutional amendment, but an "uber-amendment" that crushes other constitutional provisions in its way. Think of it as the Optimus Prime of constitutional provisions. The more this thing is amended, the worse it gets. (But wait - today we are told that it has another - what else? - "drafting error," which will be fixed in yet another flurry of amendments. Who is drafting this thing, Stevie Wonder?)

If that amendment were enacted, we would have conflicting provisions in the state constitution. Instead of having the stones to repeal the constitutional provision guaranteeing equality of educational opportunity, the bill's authors have instead decided to forever disequalize school districts by tucking this line into the bill. Instead of dealing directly with the problem, it takes the easy way out and solves the problem like a third grader would. This is constitutional amendment by "rock, paper, scissors."

None of these problems with the TPA, of course, are "conservative" or "liberal" problems. They just deal with the way money flows through state government and fairness in how it is spent. I know the message of the TPA is simple (keep taxes down), but the actual details are extremely problematic.

For instance, let's say fishing becomes big in Wisconsin one year. Fishing license applications go up 50%. I would think most people who fish are fine with their license money being spent on habitat, restocking fish, wardens, and other things related to fishing. In fact, under current law, that is how those funds have to be spent.

Under the TPA, the excess money generated by those licenses would be problematic. If the state wanted to keep that money, they would have to reduce revenues in other areas (schools, Medicaid, etc.) in order to be able to spend it on fishing. Or they could send the money back to all the state's taxpayers (at a substantial cost), regardless of whether they fish or not. If they didn't, that excess revenue would go into an emergency fund, which would then be spent somewhere down the road on roads or aids to local governments or elsewhere. Is that why you pay for a fishing license?

Essentially, whether you get Medical Assistance will depend on how many people went fishing that year or how many miles were driven by Wisconsin motorists. Whether we can build another prison will hinge on how many driver's licenses or parking tickets are issued. Different funds are raised by the state in different ways and used for different purposes. The TPA would put them all under the same tent and force them to all even out. The problem is, if you exempt licenses from the TPA, they would skyrocket to fund programs currently supported by general purpose revenue. So what do you do?

Again, not a conservative or liberal problem - just a problem of how money flows through the government. If more people drive next year and gas tax revenue goes up, do we stick all that money in an emergency fund to pay for schools? Do we send everyone a check for the money, whether they drive or not? These are all questions that have to be answered.

The TPA would also be a prescription for budget tricks. If revenue is restricted, there is nothing to keep the state from pushing a couple hundred millions' worth of school aid payments into the next biennium to match up the books. This, of course, would cause enormous structural deficits in perpetuity, as the state watched its bond rating sink. This wouldn't happen if we had upstanding and honest legislators, but it appears that we are working off the presumption that they are all incompetent crooks anyway, so why give them any credit now?

In the wake of this week's Iraq withdrawal referendums, the same people that argue for TPA are doing verbal gymnastics trying to explain how those votes don't really reflect the will of Wisconsin residents. Yet when referendums are going to be held all over the state on local budgeting decisions (which the TPA would require), those same people argue that those results will be exactly reflective of the "will of the people."

Trust me folks, I am on board with lower taxes and less spending. It kills me to point this stuff out. I can and will make the case repeatedly that low taxes spur economic development, which raises income and increases revenue to the state, guaranteeing that all these programs will be funded. And our taxes are too high, and not by a little bit. But if I knew about all these problems and kept them to myself, I would be doing a disservice to my eight regular readers.

Democrats have completely dropped the ball on this, too. They continue to weave the sob stories of local governments and school districts that are "cut to the bone" and that can't possibly function if you restrict their growth. This, of course, is all nonsense, and the public doesn't buy it. Governments will do just fine under the theory of a revenue limit, it just needs to be crafted in such a way that is workable and understandable.

Of course, the first draft of TABOR appeared seven years ago. Perhaps the eighth year of changes will be the magical year. The easiest way to take care of all of this? Elect Mark Green as Governor. And if the TPA were a stock, your best bet would be to put in a "sell" order.