Rational Decisions

Lasee’s Notes

People respond to real pressures in real ways. Put another way: people often make rational decisions, based on facts.

The fact in Wisconsin: if you have money and/or the ability to earn money, from a tax standpoint you’re better off somewhere else. You’ll get to keep more of your own money if you live in another state.

According to the non-partisan Wisconsin Taxpayers Alliance, Wisconsin lost $4.6 billion in net worth and $450 million in net income between 1995 and 2000 due to people moving out of the state. And that was during the good times.

That’s only part of the story: our population saw a net increase due to migration – but the people moving in were far more likely to be middle- or lower-income, while those moving out were more likely to be higher-income.

According to the WTA:


"These figures are not trivial," said WISTAX President Todd A. Berry, "for lost assets can cease to be held in and loaned by Wisconsin banks. They can result in the sale of stock in Wisconsin firms to nonresident investors, less in-state investment capital available for new ventures here, and reduced support for Badger State charities."
What’s going on? We are providing incentives.
We’re providing two types of incentives: first, we provide government programs that are more generous than those in other states. This is an incentive for low-income families to move here. They get more from their government.

Two, because of our high taxes and difficult to deal with state regulations, we create an incentive for higher-income families and business owners to move out.

This has two effects: demand for government services grows, while the tax base which pays for those services shrinks. This puts more pressure on the middle class, which is squeezed more and more over time.

Sooner or later we are going to hit a tipping point, where high taxes and government regulation chase out enough income, wealth, and talent that we no longer have the tax base to support the services we’ve enacted and made more generous over the years, and which people have come to expect.

Wisconsin is in danger of becoming a Wississippi – a state with only middle class and poor, where demand for services outstrips the ability of the citizens to pay for those services.

Someone has to pay for it all. In Wisconsin, our policies chase out the people who can pay, while attracting the people who can’t.

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Lasee’s Notes is a weekly column by Representative Frank Lasee, 2nd Assembly District, covering events in the Legislature and statewide.

Thoughts on the TPA

Lasee’s Notes

When Senator Grothman introduced the Taxpayer Protection Amendment (TPA), I supported it. I want to be clear that I still do support it, and will continue to support it as long as it protects the taxpayers.

As with any first try, we can make improvements. Time and study of the TPA as it’s currently written have brought out a few details – things that need to be fixed before it comes to a vote.

First, the Rob Peter to Pay Paul scheme:

As it’s currently written, the TPA lets the state rob local government revenue streams to spend on other state priorities. It then leaves local governments to backfill with property tax increases – increases they can enact without asking their voters. And all the while, the state can brag about living within a limit, when in fact spending is growing twice that fast.

Here’s how it works. About half of the state’s General Fund (almost $13 billion) is used to pay for K-12 school aids, shared revenue and other aid to local governments.

The TPA allows state revenues to grow at population plus inflation – let’s call it 4% a year. That 4% is applied to the entire budget, but this doesn’t mean every expenditure grows at 4%. The state can still set priorities – spend less on one area, in order to spend more somewhere else.

If the state doesn’t increase the half of its budget that goes to local aids (about half the general fund), the other half will grow at about 8% (twice the growth limit).

So: the state can reduce local aids in order to give more money to schools and spend more money elsewhere, and can still claim to have lived within the TPA. Local governments will have the tough decision – raise taxes, or settle for very little increase, and the property-rich districts get bigger increases than property-poor districts forever.

This is one thing that must be fixed before the TPA comes to a vote. There are others, which I’ll cover in greater detail in the future.

The next couple of Wednesdays, I’m arranging open meetings about the TPA in which we can discuss these and other issues, and hopefully remove the loopholes, because Wisconsin’s taxpayers deserve a strong Taxpayer Protection Amendment.


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Lasee’s Notes is a weekly column by Representative Frank Lasee, 2nd Assembly District, covering events in the Legislature and statewide.