Proceed with caution on shared revenue proposal

Last week Assembly Speaker Robin Vos announced a Republican plan to devote 20% of the state’s annual sales tax revenue to local governments through shared revenue.

Taken at face value, this seems like a great idea. Proponents of the proposal announced an additional $176 million would be allocated to Wisconsin’s towns, villages and cities and an additional $50 million would go to county governments. The promise from proponents of the legislation is that all local governments would see a minimum of a 10% increase in their current funding from the state. Such a funding increase is long-overdue as local governments across the state have been forced to cut services and pinch pennies in dealing with increased costs of labor and materials, while state coffers have been overflowing with historically unprecedented surpluses.

Beyond the shared revenue increase, proponents say there would be $300 million set aside in an “Innovation Fund” which would provide one-time incentives for governments to cooperate in improving efficiencies and avoiding duplication.

At face value, this also seems to be a good idea. Government waste and unnecessary duplication of services robs all taxpayers.

Another potential advantage of the proposal is that by designating a percentage of the state sales taxes, it will ensure more revenues in the future as the sales tax, being a function of the price paid for goods and services, inherently keeps pace with inflationary increases.

All deals come with strings attached. In this case, the major caveat is that according to Vos, local governments would be limited to using the money in specific area such as law enforcement, fire protection, emergency medical services, public works and transportation.

Vos says the restrictions that Republicans are putting on the funding are “common sense.” During an interview with Milwaukee-based TV station WISN this week, Vos said, “I don’t want it to be used to expand some brand new service, as opposed to making sure the core services all across the state of Wisconsin are maintained and hopefully improved.”

Again, on face value, this seems reasonable. The fundamental intent of shared revenues is to help ensure residents in all areas of the state have the same basic levels of government services regardless of the strength of the local tax base. However, as has been seen time and again in Wisconsin government, what is reasonable to a down-state politician often translates into being an unwelcome over-reach in rural portions of the state.

The devil, as the saying goes, is in the details. In this case, the Republican assembly leadership announced a plan that vaguely promises much needed additional revenues for local governments, but lacks details about the specific restrictions tied to those additional funds.

In recent decades, the state government has maintained a steady campaign of stripping local controls away from municipal and county governments in an attempt to consolidate power in the state capital. Given this track record, voters and local leaders should proceed with caution before embracing the proposal. Assembly and State Senate members must call for the details to be fully explained and spelled out before jumping on board the bandwagon.