Revenue Policies Should be in Statutes to Protect Poor & Respect Local Difference

The following is a news release issued by the Wisconsin Catholic Conference. For more information, visit www.wisconsincatholic.org.

For Immediate Release
May 26, 2004

The Wisconsin Catholic Conference has serious reservations about the implications of a proposed constitutional amendment to limit the ability of state and local government to raise and allocate revenues.

The public policy voice of Wisconsin’s Roman Catholic bishops expressed concern that dealing with the subject in the constitution instead of the statutes would deprive state and local governments of the flexibility needed to serve the common good. The Conference also questioned the impact of such an approach on programs for the poor and whether it would overly limit the discretion of local governments.

While recognizing the need for government to establish just systems of taxation that are not overly burdensome, WCC Executive Director John Huebscher said that imposing a constitutional restriction on state and local expenditures could inhibit the community’s ability to adapt to changing conditions.

“Catholic social teaching speaks to the role of government in fostering the ‘common good’ of society,” Huebscher explained. “The political community is the primary institution for securing the social conditions that enable each of us to share our gifts and to share in the goods of our community.”

“The community confers on its government the responsibility to be a good steward of the resources generated through taxes,” he added. “The community also relies on government to respond to emerging situations, such as natural disasters, shifts in the economy, and public health crises.”

The proposed constitutional amendment is a variation of the Taxpayer’s Bill of Rights (TABOR) adopted in Colorado. The plan establishes a formula in the state constitution to restrict the expenditures of state and local governments. Taxing jurisdictions could only exceed their expenditure limits by passage of a citizen referendum. Since the proposal places these limits in the constitution, any revisions would require several years to adopt.

“Such inflexibility will hamper the community’s ability to respond to crises and abrupt changes in the economy,” Huebscher argued. “As citizens, we are better served by relying on statutes that can be amended in a matter of weeks and elections to hold our leaders accountable.”

Huebscher also expressed concerns about the impact of the plan on tax fairness.

“The amount of taxes collected and spent is neither the only measure nor the best measure of whether a tax system is just,” he stressed. “It is more important to ask how the system apportions the tax burden and whether it fosters our ability to meet our most pressing needs. TABOR-like approaches to date have not dealt with either of these questions.”

In Wisconsin, state revenues depend more on a relatively progressive income tax while local revenues rely on the more regressive property tax. The proposed constitutional amendment would not change these taxing mechanisms. However, if the constitutional amendment passes, the only way that government may exceed the defined limits is with the passage of a referendum.

“A referendum is far more likely to be sought and far more likely to pass on a local level. Therefore, as the state’s financial capacity to fund programs erodes, local communities will be left to fill the gap – and will have no choice but to fill that gap with property taxes which place the tax burden disproportionately on those less able to pay,” explained Huebscher.

The WCC also said there was reason to be concerned that implementing a TABOR-like response would lead to harmful cuts in programs that serve Wisconsin’s neediest citizens. He noted that the experience of Catholic agencies in Colorado suggests that programs targeted to the needy have undergone retrenchment in that state. Leaders of Catholic Charities agencies in Wisconsin reflect similar concerns.

“Limiting the capacity for government to be responsive threatens to leave many of the most vulnerable among us at risk, particularly in times of crisis.”

Huebscher noted that local governments have expressed strong opposition to constitutionally imposed revenue restrictions.

“A significant number of local officials who are closest to the needs of their communities perceive that a constitutional amendment will essentially tie their hands.” Their reservations are a significant factor in our assessment of this proposed constitutional amendment.”

Huebscher argued that a decision to put constitutional limits on government’s ability to meet the needs of the common good is a critical question that defines the character of the community.

“Fundamentally, Wisconsin must consider the principles underlying TABOR and similar approaches and assess whether they foster a system of government that reflects our values.”

“Wisconsin has traditionally valued education, provided access to health care for all those who are marginalized by age, disability or income level, devoted resources to social services and vested responsibility in numerous local governments to provide citizens access to decision making in their local communities. Do TABOR-like amendments affirm these values or not? In our judgment, they do not,” he concluded.

Posted May 27, 2004