Constitutionally Restoring Frugality in Wisconsin

By James S. Haney
President, WMC

With Wisconsin consistently ranking among the Top 10 taxing states in the country, it’s hard to believe we have a “frugality clause” in our Constitution.

Wisconsin Manufacturers & Commerce, at the direction of the WMC board of directors, is supporting the Taxpayer Bill of Rights, a constitutional amendment to limit government spending increases to inflation adjusted for population growth, establish “rainy day” funds to pay to fund government in a recession, and require tax cuts. Any spending beyond the limits would require a vote of the people.

This common sense proposal has been introduced as AJR 55 by Representative Frank Lasee (R-Bellevue). The Taxpayer Bill of Rights enjoys vast support.

Now, a mysterious group from Colorado – The Bell Policy Center – is sending guest columns to newspapers in Wisconsin with the help of the Wisconsin Alliance of Cities, which represents mayors and local government bureaucrats who spend our property tax dollars. A web search finds that The Bell Policy Center is a left-of-center Colorado think tank of bureaucrats and former elected officials dedicated to repeal that state’s 1992-enacted Taxpayer Bill of Rights so spending interests can have free reign to spend at will.

Well, if they can offer advice to us, here’s our advice for Colorado. Don’t go back.

Keep your Taxpayer Bill of Rights. And, Wisconsin should follow Colorado’s lead and enact the Taxpayer Bill of Rights because it sets reasonable limits on government spending, requires tax relief for our citizens and allows local control by letting voters decide if the limits can be exceeded.

Last year, Wisconsin had the 7^th highest state and local taxes in America based on ability to pay, according to the non-partisan Taxpayer Foundation in Washington, D.C. Colorado, however, ranked 32^nd in state and local tax burden. Our state and local tax burden is more than 10 percent greater than Colorado.

Why the big difference? Because as the 1980s turned into the roaring 1990s, Wisconsin government at all levels did their Woody Allen impersonation and took the money and ran. Colorado, on the other hand, grew its economy and rebated over $3.2 billion tax surpluses to their citizens, The Bell Center reported in November 2003.

In Colorado, families are wealthier. In Wisconsin, governments are wealthier and families are poorer. In 2001, Colorado ranked 7^th in personal income with $33,470 annual incomes on average. Wisconsin ranked 20^th, with incomes of $29,270 on average, according to the U.S. Department of Commerce.

Enacting the Taxpayer Bill of Rights will help grow our economy and help job creation.

In the last recession, while Wisconsin lost 78,000 manufacturing jobs, Colorado’s economy boomed. The U.S. Small Business Administration reports that Colorado ranked fifth in the nation in new business creation from 2000 to 2001, while Wisconsin ranked 36^th with a meager .2 percent growth. The Tax Foundation reported that Colorado in 2002 had the fourth business friendliest tax system in the nation, while Wisconsin ranked 28^th.

The growth of Colorado’s gross state product – the market value of goods and services produced in the state – ranked 7^th in the nation from 1996 to 2000 with a 17.4 percent increase. Wisconsin ranked 20^th with a 12.6 percent increase, below the national average of 13.4 percent, reports U.S. Department of Commerce.

The major difference? Colorado caps government spending; Wisconsin doesn’t. We have more people and more Fortune 500 Companies, but Colorado and it’s citizens are doing better with the Taxpayer Bill of Rights.

Todd Berry, of the Wisconsin Taxpayers Alliance, wrote recently that the bottom line on our high tax burden is Wisconsin spends more than other states. We are making progress, Berry reports, with our total tax burden as a percentage of income dropping to 33 percent in 2003, the lowest since 1986. That progress was made, in part, because our economy slowed so government collected fewer tax dollars and because of state and federal tax cuts.

Wisconsin wasn’t always a big spending state. In fact, the Wisconsin Constitution calls for frugality, which in modern Wisconsin seems like a quaint notion from the 19th Century. Article I, Sec. 22 states: “The blessings of a free government can only be maintained by a firm adherence to justice, moderation, temperance, frugality, and virtue, and by frequent recurrence to fundamental principles.”

The Taxpayer Bill of Rights will provide a “recurrence to fundamental principles” as envisioned in our original constitution. Wisconsin’s founders would never have imagined that government spending increases could outpace the growth in personal income, but it happened in our state and drove up tax bills for families and businesses.

It’s time for the Taxpayer Bill of Rights. Call 1 800 362 9472 and tell your Legislator to support AJR 55.

Posted: February 05, 2004