Key Points About Governor Doyle's Responsible Freeze

• The property tax freeze Governor Doyle is proposing will prevent $900 million in property tax increases and save the average homeowner $336 over the next two years compared to what would have happened without his budget proposals.
  
  
• Like the Legislature’s plan, the only growth in the overall statewide property tax levy will be that due to new construction.
  
  
• The Governor’s plan and the Legislature’s proposal result in the same tax relief for Wisconsin families. In fact, if the Republicans want to quibble about numbers, the Governor’s plan would save the average homeowner $11 more during the biennium than the Republicans’ proposal.
  
  
• This plan will mean that the state’s overall property tax levy will grow at its lowest rate in over eight years.
  
  
• By combining his freeze with restoring two-thirds state funding for education, Governor Doyle’s freeze invests in education and provides property tax relief. The freeze the Republicans passed two years ago would have cut education spending by $400 million.
  
  
• Governor Doyle’s freeze protects the quality of local services by giving communities the resources to maintain their services through shared revenue and allowing communities to raise their levies to reflect both inflation and growth.
  
  
• Governor Doyle’s promotes economic development by fostering regional cooperation and protecting the state’s technical colleges.
  
  
• This responsible freeze is based on the central principle that before the state can freeze local property taxes, it must first meet its commitment to local government and schools.
  
  
• Provides $850 million so that Wisconsin will meet the goal of funding two-thirds of the cost of public education.
  
  
• Fully funds shared revenue.
  
  
• Governor Doyle’s freeze allows local governments to increase their levies to account for both inflation and 60% of regional growth.
  
  
• Inflation and growth are the two factors that make it difficult for local government to preserve the quality of their local services.
  
  
• The Legislature’s freeze only accounts for growth, meaning that communities with stable populations could not increase spending to maintain their vital services.
  
  
• Governor Doyle’s responsible freeze also promotes regionalism by tying the allowable growth in the levy for communities to their regional growth rate.
  
  
• It encourages communities to work together to foster economic growth so they all can benefit, rather than creating divisive fights between localities over the location of new businesses or development so that they can reap the advantage of the added room on the levy cap.
  
  
• It recognizes that urban centers often must expand their services to accommodate the growing demands of expanding suburban residents who work in their cities or frequent them in evenings or on weekends.
  
  
• Governor Doyle’s freeze is also based on the concept of a partnership with local government. It provides more than $100 million of incentives to encourage fiscal responsibility by local government.
  
  
• The Expenditure Restraint Program is reformed and replaced with a Levy Restraint Program that rewards both municipalities, and now counties, for keeping their levies at 85% of the overall levy limit.
  
  
• Local governments will also be rewarded for how much they are able to keep their levies even lower so that there will not be an incentive to tax to the maximum of the limit.
  
  
• This freeze is also designed to correct the flaws in the Legislature’s freeze which would have stifled economic development. The freeze exempts TIFs and new debt service so that communities can make the investments they need to encourage economic growth.
  
  
• The freeze also does not apply to technical colleges because they are a vital part of economic development by training the workforce of the future. An overall property tax freeze is possible even with technical colleges excluded because:
  
  • Technical colleges already must abide by mill rate limits.
    
  • Technical colleges constitute only 7% of the statewide levy.
  
  
• By providing two-thirds funding for schools, the plan drives the growth in school property tax levies so low that the levies for local governments and technical colleges can grow at higher rates than under the Legislature’s freeze, yet still produce the same overall impact on the statewide levy.
  
  
• The Governor’s freeze also lasts for two years because we cannot ask local governments and schools to freeze their taxes without the guarantee that they will receive the state aid they need to maintain their services. Only by setting the length of the freeze to coincide with the state budget can that be possible.
  
  
• Under the Governor’s plan all the major components of the property tax levy will have to their taxes controlled by limits. Municipalities and counties will need to adhere to the new levy limits. School spending is still restrained by the revenue caps. Technical colleges still follow the mill rate limits.

Posted February 9, 2005