Here are the pertinent sections of Gov. Scott’s Walker’s budget brief that relate to local governments and his rationale for seizing more control over how local governments are run.
Property Tax Relief and Local Government
In challenging economic times, Wisconsin property taxpayers continue to have among the highest property tax burdens in the country. According to U.S. Census data, Wisconsin ranked ninth among the 50 states in property tax burden as a proportion of personal income in 2008 and has been in the top ten states most of the past three decades. In 2010, property taxes as a percentage of personal income rose to their highest level since 1996 as levy growth exceeded the growth in personal income.
Despite the significant budget challenges facing the state, the Governor recommends maintaining nearly $900 million in general fund support for direct property tax credits, including funding a $5 million annual increase in the first dollar credit enacted in the previous biennium. The Governor also recommends restraining the growth in property tax levies by extending county and municipal levy limits for the next two years and limiting the growth in levies to the greater of 0 percent or the change in equalized value due to net new construction. To further protect property taxpayers, the Governor recommends limiting the base allowable levy to the actual prior year levy. Additionally, if debt service would be lower in the budgeted year than in the prior year, counties and municipalities must pass those savings on to the taxpayers by reducing allowable levies accordingly.
In the context of local government aid reductions for schools, technical colleges, counties and municipalities, strong levy controls are important to avoid aid reductions from becoming tax increases for property owners and renters. Under current law, levies could be increased to offset the amount of the aid reductions, placing a significantly larger burden on property taxpayers.
Due to state budget constraints, current funding of county and municipal aid cannot be maintained. The Governor recommends reducing county and municipal aid payments by $96 million in calendar year 2012, with reductions to municipalities of $59.5 million and reductions to counties of $36.5 million. Recognizing that aid reductions may put a strain on local government budgets, the Governor, in his budget repair bill, has recommended providing the necessary flexibility to local governments to meet these reductions without a significant degradation of essential public services.
To provide assistance to local governments in meeting the constraints of diminished resources, county and municipal aid reductions would be allocated in a targeted manner so that low population and low value communities that will not be able to realize significant labor cost savings will see modest aid reductions. Due to larger full-time labor forces in more populous municipalities, measures to reduce labor cost pressures for those governments will yield greater savings, so those governments are generally better able to manage reductions in state aid. Low population, low value municipalities that rely heavily on county and municipal aid due to limited tax bases generally will see smaller savings from higher employee contributions to pensions and health insurance. To address these mismatches, the allocation of county and municipal aid reductions has been structured with aid reduction maximums based on valuation that rise with the population of municipalities to match the general tendency of compensation savings to be concentrated in larger municipalities. While individual municipalities will have varying abilities to meet these state aid adjustments, the allocation of aid reductions has been designed to align with the ability of local governments to absorb the reductions.
General transportation aids for counties and municipalities have been reduced by 10 percent for calendar year 2012 and will remain flat through calendar year 2013. The reductions in general transportation aids for municipalities are also targeted to lessen the impact for less populous communities. This was done by lowering the aid rate per mile of road by only 3 percent, protecting small communities with many miles of road and shifting reductions to larger communities with both the tax base and the employee compensation savings to absorb larger reduction amounts.
Other Local Government Initiatives
The Governor recommends providing additional tools to local governments to manage expenditures by:
- Removing recycling mandates;
- Allowing municipalities to merge police and fire departments to create greater operational efficiencies; and
- Eliminating library maintenance of effort funding requirements.
I’m not sure what the last bullet point refers to, but I will find out. And it’s disappointing to hear that we’ll be receiving less transportation aid from the state under Walker’s budget plan — another way he’ll stick it to local taxpayers.
You can find this language, and even more flawed arguments in favor of less local control, on pages 50-53 of this document.
South Milwaukee Blog 
Here is the Wisconsin Library Associations definition of
maintenance of effort :
All local public libraries receive valuable services as a result of their voluntary membership in one of 17 regional public library systems. Under Wisconsin Statutes 43.15 (4)(c), local libraries must meet several requirements of system membership, including that the local library be funded at a level that is not lower than the average funding for the previous three years. This requirement is commonly referred to as maintenance of effort.
In my opinion making this optional will cripple many public libraries.
If he is limiting the amount property taxes can go up to cover reduced aid, how is that “sticking it” to the tax payers? Surely it cannot go onto our recycling fees.
“Residents” is probably a better word to use. Yes, taxes will not go up if Walker’s budget passes becuase he won’t allow them to. But at what cost? What level of services (and how many) are people willing to give up in exchange for that? That’s going to be the key question here.
The history, of course, is a long proud history of meddling (or playing politics) from mandates as to what the city must do (e.g., recycling, …) to funding things that are the city’s responsibility. Previous governors and legislatures have gone on record saying, in essence, “Vote for me! I didn’t raise your taxes!” When instead of making the hard decisions that all of us personally are making in a troubled economy, they cut the gifts to the cities, which promptly covered the loss by raising taxes. This made the higher level look good and did nothing for the tax-payer’s bottom line. Governor Walker is preventing the pass-the-buck politics from happening and giving the cities some options they didn’t previously have such as removing certain mandates and giving the same flexibility that the private sector enjoys in dealing with their employees. Remember, the rest of us can’t just go to our boss and demand a raise because the price of gas went up. That is the equivalent of raising taxes.
SM GUY, I couldn’t agree with you more. Also, I don’t think I’ll shed too many tears if the library has to limit hours (the only people I ever see at the library are librarians). And it will be great if I no longer have to use 5 gallons of hot water to rinse out my peanut butter jar for the recycling cart. Remember how the city passed the 58% water rate increase a few months ago???
I’m still at a loss as to why the taxes of working and middle class Wisconsinites would need to go up. Something like two-thirds of Wisconsin corporations (including some of the largest banks) pay no state taxes and there are 40 categories of exemptions from property taxes. Large companies are making record profits and the Stock Market has been rebounding, but we’ve seen no appreciable decrease in unemployment. Trickle down economics is not working. I have nothing against people doing well financially, but it really galls me that we keep hearing that being “business friendly” and lowering corporate taxes will help small businesses and lead to job growth when all these tax reductions are doing is making the rich richer. I’m self employed and have a keen interest in Wisconsin’s business climate, but I’ve become very suspicious of the “business friendly” mantra…thus far, it appears to have primarily benefitted big businesses.