Needed: Better way to pay public costs

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Relying on Madison politicians and property taxes is a failing system.

IT'S THAT TIME OF YEAR, when local governments build and finalize their budgets. The newspaper has published several stories in recent days about those plans, and the associated fiscal struggles.

As usual, most of the agencies say resources are insufficient and needs are high. The School District of Beloit proposes to tax to the maximum allowed which would result in a substantial increase for property-tax payers. The City of Beloit is stuck with slow growth in property valuation and is unable to significantly raise revenues because of state caps. Resulting cuts include losing three firefighter/paramedic positions because a federal grant expires and the city can't afford to pick up the tab.

For the city, state shared revenues continue to be stagnant as has been the case for years. Meanwhile, the school district expects to receive more than $2 million less in state aid next year.

BETWEEN THE CITY and the school district overall spending in the next budget year will top $200 million - that's right, around one-fifth of a billion bucks.

That number is staggering, and maybe taxpayers can be justified in believing there ought to be places to cut from such a figure.

At the same time, though, remember Beloit is one of the more challenged communities in the state of Wisconsin. The poverty rate here is higher than state averages. Per capita income is lower. Housing values are lower. Educational attainment rates are lower. The city always ranks near the top for unemployment.

Translated, that means public-service needs in a city like Beloit exceed those of most better-off communities while resources to meet those needs lag far behind.

That's why Beloit receives higher state aid money than most other cities and school districts. But that doesn't mean the revenue is keeping up with the needs.

IN OUR BOOK, the answer is not for Madison simply to loosen restrictions and free taxing agencies to jack up collections against properties willy-nilly. If the school district sticks to its tax-to-the-max plan plenty of property owners could see their tax liability increase by hundreds of dollars.

Keep in mind, there's not necessarily a positive correlation between the assessed value of a given property and the owner's ability to pay. If a homeowner, for example, has been in the house for decades the inflated value may be high while the owner's income has not kept up. Likewise, plenty of retired folks live on a fixed income and a tax bill that jumps by hundreds of dollars can be a stiff hardship.

Politicians in Madison for the past several years have thumped their chests and proclaimed how awesome they are because they squeezed the flow of money to local governmental units. While that allows those politicians to brag about how much they've saved taxpayers, all they've really done is pass the problems down the food chain. In a real sense, local governments and taxpayers are taking it on the chin so politicians can preen for the cameras in Madison.

HERE'S WHAT THOSE Madison officials ought to be doing. Analysts and observers have been saying for years that new ways need to be found to finance local governments. State aids are limited, and the property tax is the most unfair way to raise revenues. Holding a deed is not indicative of being cash-flush. At the extreme, rising property taxes can force people on fixed incomes - our older and more vulnerable citizens - out of their family homes.

That's just wrong.

Every few years one hears talk about finding a fairer, more sustainable way to pay for local services. Then it goes nowhere. It's past time for that to change and officials in state government know it. Continuing to puff their chests while kicking the problems downhill and ignoring what needs to be done is malpractice in office.

By the way, that doesn't mean local governments should be excused from strict fiscal accountability. After all, $200 million is a very large amount of money. Finding ways to save - regionalism, anyone? - continues to be a priority. Nevertheless, all the answers can't be found here. State government should get serious about alternative financing options.

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