MacIver News Service – [Madison, Wisc…] Assembly Republicans on Tuesday unveiled a plan to amend the State Constitution force the State of Wisconsin to save for future downturns in the economy.
“Common sense reforms are needed to put some sanity back into our state budgeting,” said Assembly Republican Leader Jeff Fitzgerald (R-Horicon). “This constitutional amendment requires restraint in spending during the good times and a reserve fund for the bad times, just like families across Wisconsin do every day.”
The Republicans have dubbed their plan the Wisconsin FiRSt amendment: Fiscal Responsibility and Stability for Wisconsin’s State Budget.
As proposed by Representative Mark Gotlieb (R-Port Washington) the 300-word amendment would force the following budgetary changes:
- All general tax revenues in excess of 6.5% of statewide personal income must be deposited into the Fiscal Responsibility Fund. If taxes are less than that amount, a deposit of approximately one-half percent of revenues is made instead
- During an economic recession, money can be withdrawn from the Fund to help balance the budget
- Any accumulated fund balance over 10 percent of annual tax revenues must be distributed as a property tax credit
- In an emergency or other unforeseen circumstance, the terms of the fund can be changed by a two-thirds vote of both houses of the legislature
“This fund will do three things,” Gottlieb said. “First, it will control state spending by forcing the state to save some of the taxes collected in good economic times, and not spend them on new programs. Second, it creates a guaranteed rainy day fund to stabilize the budget without raising taxes during future economic downturns. Finally, it will provide future property tax relief by requiring that fund balances above a specific amount be returned to taxpayers as a direct property tax credit.”
The Assembly Republicans note that between 1991 and 2000, state taxes outpaced personal income growth. Taxes grew by 80 percent, compared to personal income growth of 63 percent.
Proposed constitutional amendments require adoption by two successive state legislatures and ratification by referendum before they can become law. The earliest, therefore, the Assembly GOP plan could be in effect is 2013.