State Senator Mary Lazich (R-New Berlin) represents parts of four counties: Milwaukee, Waukesha, Racine, and Walworth. Her Senate District 28 includes New Berlin, Franklin, Greendale, Hales Corners, Muskego, Waterford, Big Bend, the town of Vernon and parts of Greenfield, East Troy, and Mukwonago. Senator Lazich has been in the Legislature for more than a decade. She considers herself a tireless crusader for lower taxes, reduced spending and smaller government.
Here is Exhibit A why Wisconsin is a tax hell and why I consistently vote against state budget and budget repair bills that increase taxes and spending.
The non-partisan Wisconsin Taxpayers Alliance (WISTAX) reports, “Net property taxes in Wisconsin rose 5.7 percent in 2008, the largest increase since 2005, the year before the recent levy limits on municipalities and counties were imposed. The new study notes that 2006 property taxes here were ninth highest nationally and higher than those in all surrounding states.”
School levies increased the most, at 7.4 percent. County and municipal levy increases were limited to the greater of 3.86% or the increase in property values due to new construction. Due to the slowing real estate market, new construction growth around the state was only 2.5 percent. Even so, municipal property taxes increased by 5.0 percent, and county levies were up 4.5 percent.
Using the most recent figures from the U.S. Census Bureau, WISTAX found that Wisconsin property taxes, at 4.4 percent of personal income, were ninth highest in the nation.
Here is Exhibit B. The Tax Foundation in Washington D.C. has completed its annual report estimating the combined state-local tax burden of residents in all 50 states. It concluded that state-local tax burdens have declined due to income growth surpassing tax growth.
That is not the case, however, in Wisconsin. Every year, the Tax Foundation determines the percentage of income residents in each state pay in state and local taxes. Wisconsin ranks number 9 in the country for state and local tax burdens. Wisconsin’s rank was number 10 in 2007.
According to the Tax Foundation, Wisconsinites pay 10.2 percent of their income in state and local taxes. Wisconsin’s burden isn’t far from New Jersey that ranks number 1 with a state-local tax burden of 11.8 percent.
Surrounding states have lower state-local tax burdens than Wisconsin:
Minnesota: 10.2 percent (#12)
Michigan: 9.4 percent (#27)
Illinois: 9.3 percent (#30)
Iowa: 9.3 percent (#31)
One of the interesting parts of the report is a segment on states where the tax burden rankings have dropped the most:
“From 1977 to the present, South Dakota’s tax burden ranking has dropped 25 places from 20th highest to 45th, primarily by maintaining a zero rate on individual and corporate income. The tax burden ranking in Arizona has dropped 24 places from 17th highest to 41st, and the residents there now pay the tenth lowest tax burden. Most of the change came in the wake of a property tax limitation in 1980, and their ranking has changed little since.
Montana has dropped 22 places, primarily by maintaining a zero rate on general sales.
Colorado has dropped 19 places in the ranking over the last 30 years. It levies every major tax, but the rate on each is among the lowest in the country. Spending discipline in the form of a so-called TABOR (Taxpayer Bill of Rights) has helped the state keep tax rates low.
Two politically liberal states have dropped sharply: Oregon and Massachusetts. Oregon has done so by never enacting a sales tax, dropping 16 ranks from 10th highest to 26th. Massachusetts has dropped 17 places by imposing a property tax limitation and keeping a lid on its personal income tax rate, living down its ‘Taxachusetts’ nickname.”
While other states have found the right formulas, Wisconsin continues down the disastrous path of excessive taxing and spending.
Two months ago, I was skeptical of a Wisconsin State Journal article with a bold headline that proclaimed, “Wisconsin falls from ranks of top 10 highest-taxed states for first time since 1980.” Researchers at WISTAX and the University of Wisconsin said this would be only the second time since 1969 Wisconsin has not been in the top ten in taxes nationwide.
How did this happen? As the newspaper reported, “Wisconsin's taxes actually rose slightly in the fiscal year ended in June 2006 but those of other states rose more quickly.” Translation: You’re still paying high taxes, Wisconsin, and they’re not going down.
Judging from the latest reports on our tax climate, it is time to put the corks back in the champagne.