SEIU Local 1199WI

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Stop Dangerous Tax Gimmick

Powerful politicians in Wisconsin's state legislature are pushing an amendment to our state's constitution that could sabotage ongoing and essential public investments in our state's education and health. The amendment, recently renamed the "Taxpayer Protection Act," is based on the Taxpayer Bill of Rights (TABOR) passed in Colorado in the 1990s and recently overturned there because of its disastrous consequences.

The amendment, by whatever name, severely restricts the ability of state and local governments to raise revenue for public services by imposing arbitrary and inflexible formulas. It is opposed by a broad coalition of local governments, educators, unions and social service agencies, who are concerned about the irreparable harm that the amendment could cause. One analysis showed that if such an amendment were passed in Wisconsin in the late 1980s, funding for schools would be one-third lower than it is today and Wisconsin would rank 47th out of 50 states.

Call your Legislator Today!
At the Legislative Hotline: 1-800-362-9472

The operator will ask for your address, tell you the name of your elected State Senator and/or Assembly person and provide you a telephone number where you can reach him/her.

Tell your legislator to oppose the "Taxpayer Protection Act" because:

The amendment would limit revenue for essential investments in Wisconsin by imposing arbitrary and inflexible formulas that do not take into account the skyrocketing costs of energy, health insurance and other unavoidable costs.

The amendment would undermine investments that have made Wisconsin one of the healthiest, best educated states in the country, including our K-12 education, universities, technical colleges, child protective services and Medicaid.

The amendment would likely have the same effect it had in Colorado, where educational funding was put in permanent crisis, universities deteriorated and public health systems were decimated.

The amendment would undermine the real discussion we need to have about what our needs are and what resources are available to meet them.

The Facts on the "Taxpayer Protection Act" aka TABOR

Isn't it reasonable to limit spending to the rate of inflation?

Unfortunately, many of the costs state and local government must deal with are significantly higher than the rate of inflation. The Consumer Price Index is based on household expenses, not the expenses necessary to run governments. School districts are required by the federal government to meet special education needs. The state government is required to work with mandatory sentencing laws that increase the costs of incarceration. Governments at all levels are burdened by astronomical increases in the costs of fuel and health insurance. The overall limit on revenue imposed by the constitutional amendment would therefore require cuts in vital services like K-12 education, universities, public transit and public health.

Can't government just operate more efficiently?

The truth is that local governments and school districts have already been stretched to the breaking point by cuts in shared revenue and limits on revenue growth. Most efficiencies have already been discovered and implemented. Some school districts are currently operating with classrooms at 65 degrees in the winter. The likely effect of the severe limits imposed by the constitutional amendment, will be significant service cuts to public health, education and other basic and essential infrastructure.

Isn't Wisconsin a very high tax state?

This frequently repeated truism is actually wrong. Assertions that Wisconsin taxes are extraordinarily high are based on studies that looked exclusively at tax rates without regard to fees. Wisconsin governments raise far less revenue than other states from fees. When fees are taken into account as well as taxes, Wisconsin is about average. Among 50 states, Wisconsin ranks 20th when looking at combined fees and taxes. However, Wisconsin does get a good bang for the buck in public services. We are tied for 1st in ACT scores and rank 7th in health care coverage.

Why do my taxes seem to be so high?

Wisconsin's current tax system is unfair, but the Taxpayer Protection Act preserves all the corporate loopholes and tax breaks that have significantly shifted taxes from the business sector to individuals and residential property owners. Of the 4,851 corporations with total revenue of at least $100 million, 65% paid no Wisconsin corporate income tax in 2003. In 1970 residential property owners paid 50.6% of all property taxes. Today homeowners pay over 70% of the total property taxes. The share of Wisconsin taxes generated by the corporate income tax fell by over 50% between 1979 and 2002.

How did the amendment work in other states?

The so-called Taxpayer Bill of Rights (TABOR) was passed as a constitutional amendment in Colorado in 1992. The effects of the restrictions imposed by the amendment were so severe that the state government was in a permanent state of crisis trying to cope with them. Finally, this year, Colorado voters voted to scrap the whole amendment.

During TABOR's existence in Colorado, the state experienced drastic reductions in funding for K-12 education and universities, significant decreases in state reimbursements to health care providers, and a tremendous growth in the numbers of uninsured children. The state's national ranking for access to prenatal care dropped from 23rd to 48th. In child immunization rates dropped from above average to last. Today, 30% of Colorado children are without health insurance.

Is the amendment being pushed in Wisconsin different?

The constitutional amendment now being pushed in Wisconsin is fundamentally the same as the amendment in Colorado. It would impose restrictive caps on revenue, without reference to difficult decisions that elected representatives must make about our resources and needs. The main difference in the 2,500 word constitutional amendment being proposed in Wisconsin is that it is significantly more complex than Colorado's amendment.

The truth is that many of our public expenditures are essential investments. Our future depends on the education of our children, the health of our workforce, the adequacy of our infrastructure, and many other factors that require public expenditure. This amendment could badly undermine such investments.