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Editorial: Legislators need to stop grandstanding
Spooner Advocate, April 2, 2008
Can the Wisconsin Legislature pass a budget repair bill on the back of Wal-Mart?
That’s what Senate Democrats are banking on as the divisive partisan wrangling continues in Madison.
Here’s what Sen. Jon Erpenbach (D-Madison) has to say about a budget repair bill he and his colleagues in the Senate have proposed.
“The Senate plan rewards good Wisconsin businesses by lowering the corporate tax rate. This is paid for by closing the Las Vegas Loophole.
“Closing corporate loopholes that are abused by large, profitable out-of-state companies will enable us to lower taxes for those Wisconsin businesses that play by the rules and make the tax code fairer for everyone.
“Between 2000 and 2003, Wal-Mart had about $852 million in profits in Wisconsin but only paid $3 million in Wisconsin taxes because they exploit the Las Vegas Loophole. That may be great for Wal-Mart, but in-state business in Wisconsin and Wisconsin families pick up the tab for their use of state services including publicly supported health care BadgerCare.”
Erpenbach, in a recent press release, also blames Wal-Mart for lost revenues from rental practices.
“The Senate and Governor’s budget both close a loophole in the law that stops companies like Wal-Mart from pretending to rent their own buildings back to themselves so they can avoid taxes (also known as REITs).”
Meanwhile, Erpenbach points out that the Senate and Gov. Jim Doyle have agreed on a new tax that will result in more revenue for not only the state, but for those being taxed.
“The Senate and Governor’s budgets contain the Hospital Tax Assessment. Recently garnering the support of the Wisconsin Hospital Association and Wisconsin Manufacturers and Commerce, this is a responsible way to draw down more federal funds to help pay for Wisconsin Medicaid patients.”
Republicans in the Senate, where they are outnumbered, and in the Assembly, where they are in the majority, have a much different view of what needs to be done to balance the state budget – and their ideas don’t rely on Wal-Mart bashing.
Sen. Neal Kedzie (R-Elkhorn) claims Democrats want to balance the budget by increasing taxes by $533 million. He also points out that part of the Democratic balancing act simply delays paying some of the bills until the next biennium.
“The Majority party is spinning their version of the budget fix up several different ways in an attempt to convince people that taxing businesses and sick people, along with new bonding and postponing payments until next year, is good for the state economy,” Kedzie said. “But the people of Wisconsin are smarter than that and understand that any new taxes and increased borrowing will adversely affect the economy and their personal finances.”
Kedzie points out that the so-called no-lose hospital tax eventually costs taxpayers because it’s funded by federal government deficit spending. Here’s how Kedzie explained it in a recent press release.
“Another tax increase proposed would be assessed on Wisconsin hospitals’ gross revenues, with the idea that Wisconsin would be able to leverage additional federal Medicaid dollars. The hospital tax would generate about $416 million, which I believe would be passed along to hospital patients.
“The goal is to collect additional federal tax dollars for Wisconsin Medicaid reimbursement and users of programs, such as BadgerCare Plus. However, those federal dollars would likely be borrowed in order to reimburse Wisconsin hospitals.
“Contrary to what the tax advocates may say, there is no pile of money sitting in Washington D.C. waiting to come back to Wisconsin. Instead, it would simply be more federal deficit spending, which taxpayers would eventually have to shoulder on their federal tax bill.”
Now that the hospitals and the Wisconsin Manufactures and Commerce have bought in to the hospital tax, Assembly Republicans are likely to go along with it.
That doesn’t mean the “blame Wal-Mart” strategy will carry the day.
One can only hope legislative leaders stop the grandstanding and make the cuts necessary to enact a realistic budget repair bill that recognizes Wisconsin is spending more than it makes, and it cannot continue to mandate more revenue by tax and fee increases.