The Milwaukee County Board Revisits Pension Scandal Math!
It's pension scandal math crossed with Alice In Wonderland. You know, the idea that you can lower taxes by raising them. Yet that is precisely what the Mad Hatters on the Milwaukee County Board and some of their allies in the mainstream media are trying to convince the public of.
Good luck with that.
A veto-proof majority of the Milwaukee County Board seems determined to hold a November referendum on raising the County sales tax by 1%. If ultimately approved, the sales tax on many items purchased in Milwaukee County would increase to 6.6%. This compares with a sales tax rate of 5.1% in neighboring Waukesha and Racine Counties and a 5.6% sales tax rate for Ozaukee County.
The justification for making Milwaukee County a high sales tax island is supposedly more money for the County coupled with "property tax relief" for the taxpayers. Again, this is the through the looking glass argument that we can raise taxes by lowering them. You know, like we're from the government and we're here to help you.
The scheme works like this. The County Board says that the $130 million raised through the sales tax increase would be accompanied by a corresponding $52 million decrease in the property tax levy - with the balance going to fund culture and transit. Accordingly, proponents will try to sell this as more of a tax shift then a tax increase. Don't believe them!
First, once the sales tax increase is in place, there is nothing which prohibits the County Board from raising the property tax back (or over) current levels. For historical precedent, remember that when the County Board originally implemented a .5% sales tax in 1991, it was sold as "property tax relief". Over the next ten years, before Scott Walker took over as County Executive, the property tax levy went up 55%.
Does anyone seriously doubt that the same thing wouldn't happen again?
Moreover, even a temporary decrease in the County portion of the property tax levy would be an open invitation for other entities (like MATC or MMSD) to increase their take from your taxes. Given how irresponsible the MATC Board has already has shown itself to be when it comes to raising taxes (31% in the past 5 years alone), can you imagine what would happen if they thought people might not notice even larger increases (because the County portion of the tax bill went down)?
Beyond this though, at a time when businesses are scaling back and people are losing their jobs, it's almost unfathomable that the County Board would want to turn Milwaukee into a sales tax island? Just think this through for a minute.
Say that you want to make a big ticket purchase like a major appliance or a big screen television. If you could save 1.5% off the top by purchasing the same item in Waukesha or Racine County, why wouldn't you? I mean, it's not like Milwaukee County has so many thriving businesses that we can afford to artificially erect even more barriers. It's also not like people can't go to Brookfield Square almost as easily as they can go to the Mayfair Mall.
In a way, it's almost comical that the same week the County Board was arguing that a sales tax increase wouldn't hurt local busineeses, Door County was trying to convince Illinois vacationers to do "back-to-school" shopping in Wisconsin. The reason? To avoid the Cook County sales tax!
I understand what's going on here. The County Board wants to raise taxes so they can dump more money into the transit system and area "cultural" institutions (like the parks, the zoo, the museum and the Marcus Center).
That's fine - but let's not pretend that what they're trying to do is anything other than what is truly is - a massive tax increase!
Candidly, if this tax increase is necessary, it would probably be better to just go ahead and add it to the property tax. At least that way, Milwaukee County homeowners who itemize their federal taxes could take a partial deduction. However, even the members of the County Board know that there is no way that their constituents would sit still for this type of increase to their property taxes. Therefore, we get the sales tax shuffle.
My guess is that Board strategists are hoping that a huge turnout for Obama in November will translate into large support for this tax increase proposal. I hope they're prepared to be disappointed.
Regardless of what happens in November, no sales tax increase can occur without the blessing of the Governor and the State Legislature. Given that Doyle, the entire Assembly and half the State Senate is up for re-election in 2010, I find it hard to imagine too many elected officials in Madison signing off on a tax increase like this (referendum or no). At the same time, I guess stranger things have happened.
For the moment though, the same folks that gave you the pension scandal now want to give you a sales tax increase in the guise of property tax relief. I guess some elected officials must think P.T. Barnum was right and there there really is a sucker born every minute.