WI Dems running on platform of property-tax hikes
posted at 2:31 pm on April 17, 2012 by Ed Morrissey
Small wonder Democrats poll so poorly against Governor Scott Walker in Wisconsin, even when surveys come from their own allies. Their two main candidates in the recall election in June have both demanded an end to the caps imposed on property-tax hikes implemented by Walker and Republicans in the legislature — even though they balanced the state budget while lowering taxes on Wisconsin voters:
The two leading Democrats in the governor’s recall election are criticizing the tight limits on local property tax increases that Republicans imposed a year ago. Kathleen Falk said she would repeal those caps, while Tom Barrett stopped short of making that promise. Because of those limits, Republican Governor Scott Walker and the state Revenue Department said yesterday that the average local taxes went down last year for the first time since 1999. …
Walker and legislative Republicans imposed the tight limits on property tax hikes so local and school officials couldn’t raise those taxes by large amounts to make up for losses in state aid. But Phil Walzak of the Barrett campaign said the caps are quote, “absolute and draconian” – and they don’t account for adjustments in inflation or economic growth.
In other words, Barrett and Falk want to return Wisconsin property owners to a system where property taxes can get increased without any restraint at all. Does that seem like a winning argument, especially after the fiscal discipline of this session in the state legislature? Probably not, but Democrats don’t have much choice. If they repeal Walker’s public-employee union reforms, they have to find the money to cover what the WEA Trust has lost since unions lost the ability to negotiate on benefits packages:
WEA Trust, the not-for-profit insurer that covered about two-thirds of Wisconsin school districts last year, has seen its revenue decline almost $70 million after the state gave districts more freedom to switch insurers.
Despite the drop in revenue, WEA Trust officials say they’re confident in their long-term business plan. They say the trust has expanded its market beyond school districts to include municipalities and individual state employees, and they believe their customer service may coax former customers back.
A number of school districts — including current and former WEA Trust clients — agree that the insurer’s service has been consistently strong. However, they note that cost is always a key factor, and that WEA Trust’s longevity will depend on its ability to keep its prices competitive.
They are being forced to compete now, thanks to the PEU reforms Walker and the GOP put in place last year. The WEA Trust is owned by the Wisconsin Education Association, the union representing teachers throughout the state. The WEA Trust had been able to gouge taxpayers for decades with prices far above market rates on health insurance, thanks to the unions’ ability to force cities, counties, and school districts to use them as their single source, and keeping the excess revenue for political activities. Governments in Wisconsin had no choice but to pay their prices when unions played hardball to keep this sinecure in place. After the PEUs lost the ability to demand that the WEA Trust coverage, school districts like Muskego-Norway discovered that they could get the came coverage by almost 25% less cost through private-sector insurance. Suddenly, the WEA Trust had to compete, and ended up cutting its prices substantially to stay alive.
That brings us back to the property-tax hike caps. If Barrett or Falk win the recall election, they will want to repeal the PEU reforms that allowed localities to get competitive pricing for health insurance, saving tens of millions of dollars each year. Once that happens, the WEA Trust can return to gouging taxpayers through bare-knuckled labor actions, but those local communities will have to find the cash to cover those costs. That’s why Barrett and Falk want to expose Wisconsin voters to rapid property-tax increases — to funnel the money back into the coffers of their union allies. After all, that $70 million could fund a lot of statewide political races in Wisconsin.
Update: I suspect that even Democrats will know this is a losing platform — which may be why they’re focusing on slut-shaming Walker aide Ciara Matthews for a college job as a waitress at Hooters.
Breaking on Hot Air