Saturday, January 20, 2018

Commentary

Local budgets warrant attention

  • Huebscher-Don-122110-15500395-16235

America is known for its never-ending campaigns. A conservative group already is attacking U.S. Sen. Tammy Baldwin, D-Wis., on the airwaves for an election 12 months away. A multitude of candidates hoping to challenge Gov. Scott Walker next November also have their campaigns up and running.

However, this is the time of year we should focus on something much closer to home. Local governments already have or are preparing to approve their 2018 budgets, which will determine how much we will spend to fund local services come January.

Unfortunately, most people are too busy or disinterested to follow such confusing matters, so we trust our elected and hired officials to handle the task. And judging by the scant turnout and feedback at public hearings, it appears most people are fine with how things are being managed.

Still, paying attention is important, because local government is the level where citizen input can be the most effective. Contrast that with Washington, where President Trump is pushing a massive tax cut even as we just ended fiscal year 2017 with a roughly $690 billion deficit. Remember also that the feds for many years have taken the money we’ve supposedly put into Social Security and Medicare and replaced it with IOUs.

The rationale is that a tax cut will free up money in the private sector to stimulate the economy, create jobs and add more new businesses that in turn will pay taxes, resulting in a net gain in federal revenues. That seems a little suspicious, given that we’re currently at full employment in much of the country. That is, anyone willing and able to work already is.

Cutting taxes while continuing to drive our national debt as it inches toward $20.5 trillion reminds me of the scene in the movie “Animal House,” where the boys at Delta House throw a toga party even after being threatened with expulsion.

Oh well, it’s only money … we can always print more.

Meanwhile, at the state level, a recent report by the nonpartisan Wisconsin Taxpayers Alliance is instructive. The report, citing 2015 data (the most recent available), shows that as a percentage of personal income (ability to pay), Wisconsin has the 15th-highest property taxes and 18th-highest income taxes in the country. Critics of state spending love to throw these numbers around to further their cause at election time that we live in a “tax hell.”

However, the same WISTAX report shows that 34 other states have higher sales taxes than we do. The study also found that we spend 13.6 percent of personal income on all state and local taxes and fees, 28th-highest in the nation and nearly 2 percent below the national average.

Moreover, Wisconsin receives nearly 14 percent less in federal funds than the national average, or 39th place.

And guess what? If the state gets less than the average in federal funds, the dominos keep falling. According to the proposed city of Eau Claire budget due for approval soon, state shared revenues to our city have fallen 44 percent since 1990.

Speaking of our city, the proposed tax levy increase for 2018 is 3.4 percent, which means that the owner of a $150,000 home will pay about $27 more for city services. The levy is an important number to watch, because that’s the amount governments extract from local taxpayers to function.

For those wishing to “cut the fat,” keep in mind that public safety spending alone (police, fire and rescue) accounts for about 44 percent of general fund operating costs. Such around-the-clock operations are labor intensive.

Similarly, several major categories also dominate the Eau Claire County budget. The Sheriff’s Office, Human Services Department and repaying county debt account for 46 percent of next year’s budget. The proposed 5.34 percent levy increase is part of a 16.4 percent levy jump since 2015.

The good news is that the owner of a $150,000 home in the county would see taxes rise only about $2, due in part to growth in the tax base. But we need to keep an eye on other areas, such as the proposed 16 percent increase in debt service payments (mostly to improve and maintain county roads) and the 6.4 percent increase in total county spending.

Not surprisingly, the biggest piece of the local property tax pie is the school district, tasked with educating nearly 11,200 students with a $127 million budget. A state aid increase of $200 more per student will help drop the tax rate slightly locally on tax bills for next year. District voters also approved a referendum last year that boosts the local school operations budget by about $145 a year for the owner of a $150,000 home for each of the next 14 years.

The basic rules of making expenditures line up with revenues haven’t applied to Washington for decades under presidents and congresses of both parties, and that’s not going to change until the national debt eventually overwhelms us.

Locally, we have to balance our budgets, just as you do in your personal life. We have a responsibility to educate ourselves on the causes and effects of local taxes and spending, and it can’t be done listening to 30-second commercials or reading 140-character rants.

Huebscher, former editor of the Leader-Telegram, is a contributing columnist. He can be reached at don.huebscher@ecpc.com.


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