Conservatively Speaking
State Senator Mary Lazich (R-New Berlin) represents parts of four counties: Milwaukee, Waukesha, Racine, and Walworth. Her Senate District 28 includes New Berlin, Franklin, Greendale, Hales Corners, Muskego, Waterford, Big Bend and parts of Greenfield, East Troy, and Mukwonago. Senator Lazich has been in the Legislature for more than a decade. She considers herself a tireless crusader for lower taxes, reduced spending and smaller government.
The Democrats’ response to a record state budget deficit: raise taxes
By Mary Lazich
Tuesday, Nov 25 2008, 06:01 PM
Governor Doyle has announced the state budget deficit is the highest in Wisconsin history: $5.4 billion. Now the question is how the governor and the Democrat-controlled Legislature will propose the state get out of this fiscal mess. Their early response is not very promising.
Democrats, as reported by the Milwaukee Journal Sentinel, are stunned by the enormity of the deficit. If they had paid attention during the past several years when caution was urged about taxing and spending beyond our means, they wouldn’t be suffering sticker shock. Tax and spenders ignored the warnings and kept using the state’s credit card over and over again. The bill is now due and it’s a whopper.
Some legislative Democrats have been quoted saying the state needs to find new ways to increase revenues. That translated, of course, means tax hikes.
Governor Doyle had instructed his department heads before the latest deficit news to make modest cuts in their agencies. They reacted that they couldn’t come up with the cuts. Now the governor has made another request, asking for even deeper cuts. What will their response be this time if their earlier reaction was that certain cuts were impossible?
The governor has suggested he may resurrect two measures he tried unsuccessfully to include in the last state budget: a hospital tax and a tax on oil companies. The state Assembly, at that time controlled by Republicans, was able to block the inclusion of the taxes in the budget. Democrats control both houses of the Legislature.
A hospital tax will merely drive up health care costs. The tax will ultimately be passed on to patients. In essence, it is a tax on the sick that will make health care more expensive and less accessible in Wisconsin.
The last state budget proposed by Governor Doyle included what he called an “assessment on oil companies.” That is just another way of calling the plan what it really is: It’s a tax, but a tax that won’t be paid by oil companies. Those paying the freight will be motorists who will see the tax passed onto the price paid at the pump.
The non-partisan Wisconsin Policy Research Institute (WPRI) reported during 2007 that the Governor’s tax would have amounted to a five-cent increase in our state’s gas tax, already one of the highest gas taxes in the country, and it would have been paid directly by consumers. In its report entitled, The Truth Behind Wisconsin's Oil Company Tax: Why You'll Pay More at the Pump, the WPRI wrote:
“The oil company gross receipts tax and its no-pass-through provision as proposed by Governor Doyle is the latest in a series of questionable fiscal maneuvers. But no one should be fooled; the proposal is a gas tax increase of five cents per gallon. The legislative consideration of the Governor's transportation budget must be based on this premise. Any thought of acquiescing to the Governor's proposed tax must be considered an endorsement of a five-cent per gallon increase in the tax on gasoline.”
The WPRI correctly came to the conclusion that oil companies will do less business in Wisconsin and do more business in states that don’t have the tax Wisconsin would have. The result could be a damaging reduction in oil supplies to Wisconsin leading to fuel shortages, not to mention higher prices.
Here's the complete WPRI study.
The Governor’s attempts to bar oil companies from passing on the increased cost to consumers by creating criminal penalties including jail time for oil company executives if their company passed the tax on would surely be fought in court. There’s not a guarantee the Governor’s punitive efforts against oil companies would meet Constitutional muster. The non-partisan Wisconsin Legislative Council has warned that a proposed tax on oil companies is probably unconstitutional.
The public understands how problematic such a proposal would be and has rejected the idea.
I have said it many times in the past and will continue to say it. The current budget crisis calls for dramatic decisions that will be difficult, but necessary. Wisconsin must refrain from raising taxes to try to correct this major problem. Raising taxes will only make a drastic situation even worse.
