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Monday, November 27, 2006

Re: That Whole Sales Tax Thing

To: Wisconsin State Sen. Jon Erpenbach
From: your humble folkbum
Date: Not a minute too soon

I read about your proposal to eliminate some sales tax exemptions and use the revenue generated to fund schools and reduce or eliminate property taxes.

Thanks for the rehash of the plan put forward two years ago by Governor Doyle's task force on school funding. The idea flopped then; it is flopping now.

The primary flop-cause is that any of these shell game solutions don't address the two major problems with school funding: the formula itself, and the cost of public employee benefits. You say your plan would address "funding disparities between rich and poor school districts," but that barely begins to cover the problems with the state school funding formula. (I recommend this monograph from the Institute for Wisconsin's Future as a good primer on Wisconsin school finance.) And unless the legislature addresses, among other things, health care costs, the $3.9-ish billion you think you'll eke out of this plan will start falling short soon enough--and at a rate faster than that of inflation.

A secondary problem with this maneuver is that no matter how much you promise to reset all school property taxes to zero--thereby making your plan a basically net tax-neutral one--it will be branded as a "tax increase." (Just scroll through the righty blogs on my blogroll for exhibits A through ZZZ. They know one note and they blow it loud.) And with billions of collective dollars in school debt--just to name one below-radar cost--you'll have a hard time convincing anyone to keep that property tax at zero if you can get it there in the first place.

The way we fund schools in Wisconsin needs an overhaul, starting from a blank page that shouldn't, in my opinion, default to the two most regressive flavors of taxation.

And, look, it's not ridiculous to talk about adding a sales tax to, for example, haircuts or health clubs. Do you really think someone will be less likely to join Bally's because the state will be skimming a share of his New Year's Resolution money? But I think that conversation needs to happen in the context of, I don't know, just the sales tax. One of the biggest mistakes politicians--even my favorite ones, and I like you, Jon--make is thinking that the public will pay attention long enough to add two and two. (Again, just scroll through the righty blogs on my blogroll for, well, you know.) Fix the sales tax--propose a quarter-cent drop in exchange for unexempting your list, something. If you do better than break even, plug the not-a-deficit-yet or buy everybody a pony. Don't complicate things by tying schools to it.

Then talk about school finance.

Of course, I think ethics and finance reform should be first. Makes fixing everything else that much easier.

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