Special Interest Perks Top $4.6 Billion, New WDC Study Shows

Each taxpayer pays $1,200 'graft tax' to keep big donors happy

January 13, 2003

Madison - Breaks and policy favors state lawmakers furnish their biggest special interest donors carry an annual price tag of over $4.6 billion - far more than Wisconsin’s projected two-year state budget deficit - and cost the average taxpayer nearly $1,200 a year, a new study released today by the Wisconsin Democracy Campaign shows.

The special interests that benefit from tax breaks and loopholes, pork barrel spending projects, lucrative state contracts and other favors have contributed $36.9 million to candidates for state office and the governor since 1993, an analysis of donations compiled in the WDC’s database of campaign contributions reveals.

"The average taxpayer is paying a hidden $1,200 tax to keep big campaign contributors happy. This is the price we all pay for political graft," WDC executive director Mike McCabe said.

The report, entitled "The Graft Tax," shows the real cause of the state’s budget crisis is political corruption, McCabe said.

"Wisconsin wouldn’t have a budget deficit if our state lawmakers could say no to their biggest campaign contributors," he said.

WDC’s findings also expose the hypocrisy of lawmakers who oppose campaign finance reform on the grounds that it is inappropriate to ask taxpayers to pay for political campaigns.

"Taxpayers are paying through the nose for political campaigns. We all are paying for a broken campaign finance system that has led state lawmakers to trade public policy for the donations they need to bankroll increasingly expensive election campaigns," McCabe said.

He noted that campaign finance reform legislation such as the Ellis-Erpenbach bill would cost roughly $1 per taxpayer.

"Taxpayers pay for political campaigns one way or the other. We can pay for them directly through public financing, or pay much more for the favors our elected representatives do for their big campaign contributors," he said. "Taxpayers would be infinitely better off spending a dollar to wean elected officials from special interest money that corrupts the legislative process rather than paying $1,200 for the care and feeding of wealthy campaign donors like we do now."

The costliest form of political graft is what amounts to a system of legalized tax evasion for special interests that are among the state’s most generous campaign donors. Sales tax loopholes that narrowly benefit big campaign contributors cost the average taxpayer $545, and property tax exemptions add another $186 to the average taxpayer’s bill. Corporate tax breaks and loopholes cost the average taxpayer $218.

"Our study clearly shows we don’t need tax increases to balance the budget. Lawmakers just have to ask their special interest buddies to pay the taxes the rest of us already pay," McCabe said.

Another key driving force of the graft tax ordinary citizens pay is the state’s prison-building binge. Because Wisconsin favors construction that benefits an industry that is a leading supplier of campaign donations instead of less expensive corrections alternatives, state taxpayers bear a substantially bigger burden for the same results achieved by states like neighboring Minnesota, the study shows.

"Wisconsin taxpayers are paying a premium for public safety because of our lawmakers’ need to feed the prison-industrial complex," McCabe said.

The report cites numerous questionable prison contracts, including the nearly $80 million legislators and the governor put in the state budget in 2001 to buy a privately built prison near Stanley that the state never requested and that sat empty for a year and a half because the state could not afford to open it. The Oklahoma-based developer that built the facility on speculation made sizable campaign contributions to lawmakers during budget negotiations, but company officials have not made any large individual campaign donations since the purchase was finalized.

Like prison construction, excessive road building benefits a few major campaign donors - road construction companies and the industry’s labor unions - at the expense of ordinary taxpayers. Road builders have succeeded in persuading the governor and legislators to approve more than $800 million worth of road projects that were not requested or deemed necessary by the state Department of Transportation (DOT), the study notes.

"DOT has been about as bashful as the Pentagon when it comes to asking for money," McCabe said. "When lawmakers are building roads that not even the DOT wants, you know something is wrong."

Graft Tax Report Graft Tax Scorecard