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Property tax plan a small step forward: Our View

Cuts are a positive, but Wisconsin still needs comprehensive tax reform.

11:13 AM, Oct. 16, 2013  |  Comments
Gov. Scott Walker speaks to reporters at World Dairy Expo in Madison. Walker last week announced a $100 million property tax relief plan that the Legislature will take up this week.
Gov. Scott Walker speaks to reporters at World Dairy Expo in Madison. Walker last week announced a $100 million property tax relief plan that the Legislature will take up this week.
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In a press conference last week, Gov. Scott Walker announced plans to cut $100 million in property taxes for Wisconsinites - $40 million this year and $60 million next year. The bill has been placed on the super-fast track, with the bill passing the Senate Tuesday and an Assembly vote expected today.

Everybody loves property tax relief. Property taxes in Wisconsin do bear a disproportionate burden in the tax code and high rates are experienced as a hardship by plenty of middle-class households.

The reduction is modest. Tax bills would be reduced by $13 this year for the median homeowner with a house valued at $148,000. They would decrease from $2,938 to $2,925 for that homeowner; a reduction of less than half a percent. They would be cut another $20 next year, according to Legislative Fiscal Bureau estimates.

That's a small refund and not likely to change anyone's life. It's also not without risk: The figure is based on projected revenues; if those revenues don't materialize, Wisconsin could end up in a hole.

But the amount of the cut is small enough that the fiscal risk is not huge. And it's rare enough to see Wisconsin property taxes headed down that this proposal seems worth noting - and, with a few reservations, celebrating.

Because the cut comes from anticipated state revenue, it means other parts of the budget aren't being cut as a result. Certainly, some Democrats will argue that the money would be put to better use funding education or other priorities. It's a legitimate point, but the state budget did restore funds for education and a number of other programs - albeit not to pre-2011 levels. Tax relief is a legitimate priority to have in the mix, too.

Wisconsin still needs comprehensive tax reform. Fiscal experts, for example those at the Wisconsin Taxpayers Alliance, have long argued that the state's revenue system leans too heavily on the single source, property taxes, creating problems if economic cycles cause the state to lose out on that revenue.

A series of shelved blue-ribbon commissions - whose recommendations might have been discarded, but it does not mean they were wrong - have suggested routes to rebalancing the way the state funds its government, everything from sales tax hikes to toll roads. But politicians of both parties, certainly including Walker and the Republicans in power today, have shied away from presenting the public with actual trade-offs that might serve to reduce property taxes while maintaining a sound fiscal footing.

This proposal has merit on its own. But it does not present any sort of trade-off or structural change, either. That is a conversation we still need to have.

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