STATE CAPITOL NEWSLETTER: Tax politics
Gov. Jim Doyle wants a constitutional amendment to allow the Legislature more freedom on taxes, especially the property tax. The idea has the potential to refocus the tax debate during the 2010 election campaign.
The amendment would open the door to a future Legislature exempting a portion of a home’s value from the property tax. In turn, that could mean higher property taxes for business and industry. The Wisconsin Constitution now calls for property tax uniformity, except for agriculture and undeveloped land.
A similar constitutional amendment was rejected by 1,098 votes in April 1989. A total of 812,628 votes were cast in that statewide election. Wisconsin has used income tax credits to ease property tax burdens, but that is usually not remembered when the property tax bill arrives.
A heavily business-backed media blitz was a key factor in the narrow defeat of the amendment, especially in eastern parts of the state. The amendment was popular in most of the counties in western Wisconsin where citizens knew Minnesota, without uniformity, had lower property taxes.
The constitutional amendment idea could allow Democrats to talk about helping homeowners. Many polls have shown the property tax is the most hated of the Wisconsin taxes.
Scott Walker, the front-runner for the Republican nomination for governor, has stressed the idea of rolling back personal income taxes on high-income citizens and for corporate tax changes. He suggests those tax measures will help create new jobs and bring prosperity to the state.
But the measures Walker would like to roll back were signed into law by Doyle last year to help ease the state’s financial crunch. Republicans think higher taxes are unpopular and they want to paint any and every Democratic candidate as a “Doyle Democrat.”
Jittery Democrats, who control both houses of the Legislature, may not want to follow Doyle’s constitutional amendment idea. Doyle is a lame duck, having decided not to seek re-election.
But it’s a nifty political idea. The control of the Legislature is often decided in western Wisconsin where the amendment concept was popular in 1989. Constitutional amendments must be approved by two consecutive legislatures and then submitted to the voters for approval. The first legislative vote on any constitutional amendment is easy.
It is but the first step in a promise. Critics could contend it won’t have any immediate impact. The critics will say uniformity is important and fair, but they won’t lower any homeowner’s bill.
Uniformity didn’t win in Indiana. That state has opted for constitutional ceilings on the property tax, based on the value of property, with the cap on business property being three times higher than residential property, according to the Wall Street Journal.
One further tax note: a statewide referendum in Oregon dramatically increased the personal income tax on well-to-do citizens to over 11 percent. Some 54 percent of the voters opted for make the rich pay more. Whether Walker’s promise to go the other way sells in Wisconsin remains to be seen.
