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Editorial: Tax cut OK; next time, save it (video)

6:16 PM, Oct. 18, 2013  |  Comments
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So the state Legislature finds itself with $100 million burning a hole in its pocket. What to do? What to do?

The decision is made - actually, it was made first by Gov. Scott Walker. We'll give the money to our K-12 public schools, so they won't have to levy quite as much in property taxes.

VIDEO: SEN. MICHAEL ELLIS SAYS TAX CUT MAKES SENSE

It's a lot of money in a lump sum, but spread across every property owner in the state, $100 million isn't much. On a median-priced home, it'll decrease property taxes from what they would have been by $13 this year and another $20 next year.

But still, Republicans make a compelling point when they say it's what the state can afford, to make up for a little of the property-tax hikes of past years.

Many Democrats pointed out the tokenism of the $100 million and said it's more for show than anything else, that it gives lawmakers something to tout when they run for re-election next year.

This is true. It's also true that many Democrats voted for it anyway.

It's also noted that the $100 million tax cut will increase the state's structural deficit - the hole that it's going to have to fill going into the next budget to keep the same obligations that are in this budget. In the first year of the 2015-17 budget, the structural deficit will increase from $231 million to $336 million.

The Legislative Fiscal Bureau, the Legislature's non-partisan number-crunchers, says the state will need about a 2 percent revenue growth to fill the deficit - and it's projecting the revenue growth will be 4 percent. So that should work out OK.

One Democratic senator, Tim Cullen, suggested to the Milwaukee Journal Sentinel that, if the state has an extra $100 million, it should go into the rainy-day fund. That's an excellent idea. A lack of a rainy-day fund has been a contributing factor to the state's past fiscal problems.

But the state recently added about $150 million to the fund, which now stands at about $275 million. That's not enough yet. It's a little less than 2 percent of the state's yearly spending, according to the Fiscal Bureau. Double that amount would be better.

So, is it OK for the state to spend $100 million to help property taxpayers a very little bit? Given the past circumstances, yes.

But the next time the Legislature finds itself with some extra money burning a hole in its pocket, we'd recommend a tried-and-true alternative:

Save it.

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