Property tax reductions may require increasing other taxes

Matt Pommer  Wisconsin Newspaper Association

Mailing property tax bills is part of the year-end work for local governments across Wisconsin. Perhaps it is the timing, but the property tax is the most disliked levy collected by state and local governments.

That is being reflected by members of the newly-elected Republican majorities in the legislature making lots of talk about reducing property taxes.

The highly respected Marquette University Law School poll asked respondents whether they would like to raise either the state sales tax or the state personal-income tax if it would help pay for property tax reductions.

Only 30 percent backed a higher income tax to help finance property tax relief. The poll also showed only 30 percent would support a possible sales tax increase for lower property taxes. Perhaps that reflects skepticism that such a trade would occur.

Wisconsin traditionally has ranked high in property and income taxes and below the middle in the size of the state sales tax. But comparing the sales taxes being paid elsewhere in the Midwest is a slippery business.

Not all states impose their sales tax on the same products and services. Many county governments in Wisconsin have added a half percent to the total sales tax burden. In the 1990s, state government approved an additional sales tax uptick in Milwaukee-area counties to help pay for a new ballpark for the Milwaukee Brewers.

Former Gov. Tommy Thompson has said getting the Miller Park sales tax through the Legislature was the toughest legislative fight in his 14 years of being chief executive. The Brewer management brought in ex-players like Henry Aaron and Robin Yount to convince a nervous and skeptical legislature. And that occurred before the tax-hating Tea Party became a significant political force in America.

Government help likely will be sought to build a new stadium for the Milwaukee Bucks professional basketball team. One idea being floated is using state bonds to help cover a part of the hundreds of millions of dollars needed for construction.

The political cover would be saying that the state income taxes paid by the team members would pay off the bonds.

But the players’ income taxes, like those of other Wisconsin citizens, now go to the state’s general fund, which finances aid to school districts and local-government operations throughout the state. That’s often described as property tax relief.

It may require an all-out media campaign to convince those living far from Milwaukee that this is a swell idea.

Financing significant property tax relief with other taxes will require courage by those elected last month. A higher sales tax rate might actually be less controversial than opening up the question of what products and services should be exempt.

Over the decades, blue-ribbon study commissions have been appointed by governors to review the tax picture and make recommendations. Those commissions usually got wide media coverage providing a chance to educate the public. History shows that recommendations from such commissions rarely carry the day in the Legislature.

Often, that has been blamed on the close divisions between the two political parties. The Republican landslide in November would seem to erase that as an excuse for just maintaining the status quo.

Revenue from sales and income taxes fluctuate with economic highs and lows. Land and building values may change, but the property tax collections are more reliable because, overwhelmingly, they are paid.

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