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TPA could raise property taxes, Barrett aide says
Proposal slammed by mayor, comptroller

March 20, 2006 -- Adoption of the Taxpayer Protection Amendment could result in higher property taxes for state residents, according to Mayor Tom Barrett's top aide.

"What they (TPA supporters) don’t tell the public is 'we would cut aids to cities and counties,' " Curley said. Under the proposal, he said, "those cities and counties can levy for the loss of state aids."

The likelihood of Increased property taxes is just one of many problems city officials have with the proposed amendment to the state constitution. Barrett and City Comptroller W. Martin Morics slammed the proposal in a letter to state legislators.

The city's budget has increased just 11%, or 1% a year, since 1995, they said.

"What problem are we solving here?" they asked in their letter.

The TPA would allow rich communities to increase revenue far more than poor ones like Milwaukee could, they said.

The TPA, which backers tout as a way to control taxes, would limit allowable increases in certain revenue to the the rate of inflation plus 60% of the value of new construction.

Republican legislator also warns of TPA property tax hikes

State Rep. Frank Lasee (R-Green Bay) said last week that "the TPA lets the state rob local government revenue streams to spend on other state priorities. It then leaves local governments to backfill with property tax increases – increases they can enact without asking their voters."

Lasee said he generally supports the TPA, but wants it fixed.

Federal and state aids -- which account for 50% of city revenues -- are excluded from the formula, however, Barrett and Morics wrote.

"The result is that the City will only be able to recognize half of the growth allowed by formula," they wrote in their letter to State Sen. Glenn Grothman (R-West Bend) , and State Rep. Jeff Wood (R-Chippewa Falls).

Grothman is chairman of the Senate Select Committee on Taxpayer Protection Amendment, and Wood is chairman Assembly Committee on Ways and Means.

Milwaukee's revenue would be allowed to grow at 73% of the rate of inflation, "whereas other wealthier municipalities would be able to increase revenues at roughly twice the rate Milwaukee is permitted," Barrett and Morics wrote.

There TPA also is flawed in other areas, including:

  • Debt service. "As there is no distinction between tax levy for city operations and tax levy for debt service, any excess increase in the tax levy for existing debt service would have to be offset with a corresponding decrease in the tax levy for operations," they wrote.
  • Services with greater-than-inflation cost increases. "The City of Milwaukee incurs significant expenditures in lighting some 1100 miles of streets," they said. "This cost does not track the CPI. It takes large amounts of fuel to maintain a fleet of police vehicles, fire equipment, sanitation trucks and other specialized public works equipment. This cost does not track the CPI."
  • Proposed restrictions on things like construction permit fees or building inspection fees. Those controls would "reduce local government capacity to protect property owners' investments and public health, or shift these costs inappropriately onto the general taxpayer either through higher property taxes or reduced government services," Morics and Barrett said.
  • The creation of negative incentives: "Municipalities seeking to minimize cuts in vital services and sustain necessary infrastructure investments will have a great incentive to defer costs to future taxpayers, under the Taxpayer Protection Amendment," they said.

Curley, in the interview, questioned how many legislators had actually read and analyzed the TPA.

"There’s a lot of sloganeering going on here," he said.

“We’ll all have to figure it out if this passes," he said. "Obviously there will be a reduction in services and a reduction of employees....People really need to take a hard look at the impact this is going to have. Then they have to ask themselves, 'what services don’t you want, what services do you want to cut back for the city of Milwaukee to comply with it?' "

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