Costly Breaks to Big Donors Survive Budget Crisis
Special interests out only $1 million of $5 billion so far in budget plan
March 19, 2003
Madison - The proposed state budget could cost property taxpayers, seniors and college students hundreds of dollars a year while wealthy special interests who make large campaign contributions lose only $1 million of an estimated $5 billion a year in tax breaks, pork barrel spending and other policy favors, a new report by the Wisconsin Democracy Campaign shows.
The WDC’s latest findings come as the Legislature’s Joint Finance Committee begins a series of public hearings around the state on Governor Jim Doyle’s proposed 2003-05 state budget. After those hearings, the committee will spend several weeks revising the plan before sending it to the Republican-controlled Legislature for approval and then back to the Democratic governor this summer.
The report, “Graft Tax (Part 2),” shows that existing breaks that benefit special interests cost taxpayers $5 billion, or $1,305 each. That is up from $4.6 billion, or $1,199 per taxpayer, worth of breaks detailed in a report in January called “The Graft Tax” because new state estimates of the value of tax exemptions identified in the first report increased their price tag by $410 million, or $106 per taxpayer.
The budget plan shaves only a fraction of the special interest breaks identified in January - $1 million a year in ethanol production subsidies - thanks to about $46 million in large campaign contributions to candidates for statewide office and the Legislature since 1993 from the interests benefiting from the favors.
"If the revenue forecasts hold up, the state will take in as much as it spends. But this is not a balanced budget in any other sense of the word," WDC executive director Mike McCabe said. "It puts the burden of closing the state’s $3.2 billion budget hole squarely on the backs of people who do not have a habit of making large campaign contributions. And it does not require big campaign donors to share in the pain."
Among the latest report’s key findings are:
- Doyle’s proposed shared revenue and school aid cuts are likely to increase local property taxes, cut municipal services and school programs, or both. But pressure on the Legislature from the road builders and their $1.9 million in contributions since 1993 could mean even bigger cuts in local government aid in order to preserve the industry’s flow of state road building money.
- On top of that, motorists will pay more in the form of higher yearly registration fees and gasoline taxes.
- Approximately $2.5 billion in sales tax exemptions and $717 million in property tax exemptions remain intact for generous special interest contributors in the business community and the manufacturing, agriculture, real estate, construction and other industries.
- Meanwhile, thousands of participants in the state’s SeniorCare drug prescription program will get smacked with higher annual enrollment fees and deductible increases of up to 70 percent.
- The powerful Wisconsin Education Association Council, which has spent $4 million since 1993 on campaign contributions, independent expenditures and issues ads involving candidates for the Legislature and statewide office, was appeased through a proposed end to a law that limits teacher salary and benefit increases.
- Meanwhile University of Wisconsin students face tuition increases of as much as $700 a year and a therapy program aimed at helping autistic children stay out of expensive institutions later in life faces extinction.
"Much has been made of the claim that this budget eliminates the deficit without raising taxes. But it appears the only ones who won’t be paying more are the wealthy special interests who make big campaign contributions," McCabe said.