Today is

Saturday, May 16, 2015

Three Stories Janesville Should Avoid

Did you know Michigan voters recently rejected a 1% state sales tax hike to pay for roads and bridges?

Bloomberg Excerpt:
Michigan Voters Reject Tax Increase to Pay for Roads and Bridges
Michigan voters rejected increasing sales taxes to pay for schools and gas taxes to generate $1.3 billion annually for road and bridge construction, according to Governor Rick Snyder.

I was aware of Michigan's referendum and thought it would be too close to call. I did not expect to see a landslide rejection of the proposal. But indeed it was crushed by voters, I mean crushed by 80% to 20%. 80 to 20!! The referendum's defeat was the worst defeat for a Michigan ballot measure since 1963. The previous record holder was a 1980 constitutional amendment that 78.8 percent of voters voted against.

In Wisconsin, Gov. Scott Walker's failed budgets have put the state in the same tainted pickle jar with Michigan.

Ideologically broken with pre-existing Laffer/Norquist conditions to punish the middle-class, induce decline and reward his base, Walker intends to borrow $1.3 billion for his transportation fund shortfall while the state's GOP-led senate and assembly, facing a leadership vacuum of their own on taxes and budgeting, are pushing a bill sponsored by the road lobbies to pass the buck for road repair tax hikes onto local government.

Wisconsin Democracy Campaign Excerpt:
Bill Would Push More Road-Repair Taxes on Local Governments
Road builders, who have contributed more than $403,000 to current legislators over the past four years, are backing a legislative proposal that would allow counties and municipalities to create a new sales tax to pay for local street maintenance and repairs, a plan one critic calls buck-passing.

[ ... ] 1000 Friends of Wisconsin, a Madison environmental group, said the legislation would end up allowing some people to be taxed four times to pay for local road maintenance. The group says state residents already pay for road maintenance through state gas taxes, annual vehicle registration fees, and property taxes.

In Janesville, you can bet Walker's booster club, Forward Janesville, is part of the rightwing-engineered lobby drive to shift taxes from a broad income-based system to more regressive local tax and fee structures on Wisconsin communities. In fact, Forward Janesville elitists are on the record stating Janesville residents must increase their tax obligations or else the community will face an economic death spiral. Keep in mind, FJ members are huge supporters of Scott Walker and Paul Ryan.

Yet, it is amazing that when a new tax or tax hike is proposed on the "little people," we don't hear a word from the likes of random-person Grover Norquist, but just try to charge Big Business a tonnage tax on extracted minerals from Wisconsin land, and all hell breaks loose.

Both of those stories however should pick local interest because last November, Janesville voters also rejected a similarly fuzzy-worded street repair tax hike referendum 63 to 37, and Rock County enacted a half-cent county sales tax back in 2006. This leaves almost no wiggle room for local rightwing "visionaries" to confiscate greater portions of cash from the area's lobbied and legislated less-than-average paychecks.

Finally, and this story should also carry some weight in Janesville. Scott Walker has called for elimination of state economic development loans. He proposes scrapping the $55 million revolving loan fund for the failing agency and using the money for education and worker training programs. The part about using the money for education will remain to be seen however, since Walker never does anything he says he will do.

But in Janesville, "loans" for economic development are a closely-guarded welfare tool for the wealthy that aren't real loans at all. Instead, the loans are called "forgivable," and were payable by reaching job creation benchmarks that with the passing of time, became less about adding jobs and more about retention.

That in turn gave way to today's TIF agreements that have completely eliminated job creation benchmarks, and instead are formulated to accept paid property taxes for ten years as payment for the taxpayer funded cash "loan." Keep in mind the largest portion of property taxes paid within a TIF District are segregated from the general fund for the life of the TIF, which could be 15, 20 years or more.

This system of forgivable loans is sold by Janesville officials as a means to increase local revenue by expanding the tax base sometime in the future, but as I described in a recent story, it's little more than a circular transfer of taxpayer wealth carved out from general fund obligations with no immediate positive impact. As far as I'm concerned in its current form, it borders on money laundering.

1 comment:

Anonymous said...

Lou, after reading this I am reminded why your site is in my bookmarks folder. Great insight Mr. Kaye.

Post a Comment