Budget FastFact: Reach out and Tax Someone New Phone Tax Starts Today

In 2003, the state created a ‘temporary’ cell phone tax to upgrade 911 response services.  When the upgrade was done, a balance of $20 million was left over. This tax was supposed to be temporary and any surplus was supposed to be returned back to consumers as a credit on their cell phone bills.

Temporary tax. Yeah, right.

Surplus returned to taxpayers? That’s a good one.

Not only was the surplus of that fund used for purposes other than which it was intended, thanks to the recently-passed State Budget, the cell phone tax was extended and raised by 75-cents. Worse yet, the tax was made applicable to all landlines as well.

The creative spinners in the legislature and Governor’s office tried to make this new tax more palatable by calling it the “Police & Fire Protection Fund.” Um, not exactly. The $107 million plus in tax dollars collected from this new tax actually will go toward paying county and municipal aid, something the state already did, does and has to do. This is not a significant new state investment in local services and there is no requirement that any of this money be used to fund police or fire departments.

But “Police & Fire Protection Fund” sounds so much better than “The New Tax We Slipped in to Take More of What You Have and We Hope You Don’t Notice,” or the “Hey, in a Budget that Spends Billions More than the State Taxpayers Can Afford We Had to Get Creative as to How to Milk You for More Money Fee.”

So when you open this month’s phone bill and wonder why it is significantly higher, you’ll know who to thank: The lawmakers who have been patting themselves on the back for getting the State Budget done on time.

The phone tax, which is alive as of today, is just the latest reminder of just how bad the State Budget was for Wisconsin taxpayers.

As we noted earlier this year, it’s 12.8 Billion Dollars of Bad.

$3.63b increased spending
$2.05b increased taxes, fees, enhanced collections
$3.58b of borrowing
$1.50b allowable local property tax hike
+ $2.05b of a structural deficit
$12.81 Billion of Bad

But remember, the legislature and the Governor finished the budget on time!  Spread the word. Call around. You’re paying the new phone tax no matter the size of your phone bill…