May 22, 2023
Guest Perspective by Sen. Chris Kapenga
You may have heard that the Legislature has been spending a significant amount of time discussing the concept of Shared Revenue. For those not familiar with the subject, this is essentially a portion of the funding for local government that comes from state tax revenues. First, I want to walk through the most recent version of the bill itself, then Milwaukee, and finally more about the history of Shared Revenue.
The Current Legislation
The current piece of legislation being proposed would grow local government as well as give them a nearly continual increase in spending. It is a significant change in policy, and I am strongly opposed for the following reasons:
First, this would be the largest growth in local government in recent state history. As passed by the Assembly, this equates to the following:
|Existing Aid||$ Increase||% Increase||New Aid|
Second, it would add another $300 million into a fund to incentivize local governments to look for efficiency. This is already the job of every elected official. It shouldn’t be necessary to incentivize local government to do things efficiently. Public servants are to be good stewards of taxpayer money. In all, the bill is looking at over $500 million dollars in new spending.
Third, the new funding would be tied to the same annual increase as the sales tax, which is essentially guaranteeing a perpetual increase in the size of local government. This is a fundamental shift away from our current system which puts that growth in the hands of you, the voter.
Fourth, a large bail-out for Milwaukee unrelated to the subject matter of the bill has been unnecessarily included. As with every community, the local elected officials in Milwaukee have made their own decisions on local matters. They should bear the fruit of good decisions as well as bear the burden of bad decisions. Unfortunately, Milwaukee’s leaders have been making bad decisions for many years. They have been warned the cost of those decisions would eventually catch up with them, and lo and behold, that has come to fruition.
Finally, there are some provisions that have been added to the bill that are positive, but as a whole, this bill is not something I would support.
Speaking of Milwaukee…
Without getting into the details of all of the bad decisions, they made excessive promises they were not able to afford then or in the future. In an effort to cover up these excessive promises, they amassed significant pension debt, and now, with the debt coming due, can’t afford to continue making payments.
The local elected officials in Milwaukee have made their own decisions on local matters. They should bear the fruit of good decisions as well as bear the burden of bad decisions.
The pension debt debacle has caused collateral damage to their budget, and the declining quality of services is clear for anyone who works or visits there. Skyrocketing crime, poor education, and residents fleeing the area are just a few of the major issues the city and county are dealing with.
For those who don’t know, I began my career nearly 30 years ago working in downtown Milwaukee as a CPA. Later, I moved my business there and thoroughly enjoyed being downtown for almost 10 years. My wife and I still go there often for date nights and long walks on the lakefront. I, probably more than most, have a deep affection for the city.
Yet, if we step in and “save the day,” there will be no consequences for the poor policies which led to the current situation. It’s like I have said many times in my E-Update: the American Dream is about the freedom to choose your own destiny, and either enjoy the rewards of success or learn from bad decisions. Take away any part of that recipe, and you don’t have what makes us great. It is no different in this situation.
I do believe Milwaukee will be able to work through their own issues, but it will require some temporary pain and tough decisions. On the positive side, consequences lead to improved decisions and hopefully better decision makers in the future.
Detailed Background on Shared Revenue
The details of Shared Revenue have evolved over time in the state of Wisconsin and is fairly complex. For those interested in learning more about the historical background of shared revenue, I highly recommend reading about it here: Shared Revenue Program (County and Municipal Aid and Utility Aid) (Informational Paper 22) starting on page 7.
If we step in and “save the day,” there will be no consequences for the poor policies which led to the current situation.
Since being elected, I have been asked by some local officials to change the process and fund more of the services from state tax revenues while others have asked to leave it alone as they want to retain local control. To have to go to referendum is a lot of work, and I am okay with that. Why? As the recipient of the services, you are the best decision maker on if a referendum should pass.
I have been a big supporter of the current process because it puts complete control of local government in the hands of the local voters through the people they elect locally and through their voice on referendums. Throughout the state, there have been a large number of referendums that have both passed and failed, and the results have been controlled by you, the voter. Overall, it has helped to keep government limited, and history has proven that the more limited government is, the more free people are, and the more free people are the more prosperous and content. It is the formula behind the Declaration of Independence, the United States Constitution, and the American Dream.