 and welcome to the Donahue Group. We're just enjoying ourselves here so much this afternoon, even before the show begins, that we just need to refocus ourselves and introduce ourselves and get ready to talk about interesting issues facing the city and surrounding areas. With me today, Cal Potter, former State Senator and former Assistant Superintendent of Public Instruction for Library Services, Professor of Mathematics at UW-Shabuigan, Ken Risto, in charge of the Social Studies Department for the Shabuigan Area School District, and I'm a lawyer and just sort of a gadfly, a gadabout. And in charge of the program, at least nominally, until something really terrible goes wrong. Socrates was a gadfly. I know that's not quite the expression I want to use, but in any event, there's a fair amount going on in the city, although it does seem to be a little bit of a replay. We continue to talk about the police station. It looks like 2007 is the time for the police station, at least as far as the city council is looking at it. Interesting headlines about the cost of actually running it. I think the Finance Department, Rich Gephardt, put the cost of $272,000, which, lo and behold, means that we need to lay some people off. Is anybody surprised? No, school districts go through this all the time. Build a building, then they have to equip it with desks and all kinds of manner of things and then the janitorial staff and all kinds of other folks to staff it. I remember... We went through that with the school district when we built the last set of additions to the high schools. We got word at around mid-July before schools started that, well, we've got classrooms where we don't have desks or chalkboards and all of a sudden money had to be taken out of all sorts of budgets, so I'm not in the least bit surprised that people have done that. We have built a building and we didn't lay anybody off it. We had a donation from the Brock Foundation and the county was able to finance it, so we appreciate their work. Well, UW-Shabuigan has actually been very, very successful in attracting major community support for the Broad Science Building, for the Acuity IT Technology Center, which is going to be a fabulous building. And the county certainly had to kick in some funds, at least for the Acuity Building and matching, but that seems appropriate under the circumstances. But I just remember moving from our first little house to a somewhat bigger house and thinking, you know what? It takes a lot longer to clean the big house than it does to clean the little house, so I think it is an interesting problem for the city just to deal with all the rising costs and the absolute freeze on tax revenues. Although the proposed budget raises city taxes, I believe by, and I'm just going to look at my 1.5% increase, the total city tax levy is going to go up. Overall, that seems pretty decent, but... It's underneath the inflation rate. What is that 1.5%? That's the city that would be the school budget because that's coming a little bit under budget, in fact. Well, the school. For those of us who live in the Shabuigan area school district, three out of four of us, because of Governor Doyle's clear support for continued funding for public education, we're actually looking at a positive decline in the school taxes. And I must say that when I got on the Shabuigan area school district Board of Education, it was six years of peace and prosperity as we continued to lower tax rates or at least not have them jump up too much. There were some unfortunate side effects. The qualified economic offer was difficult for teachers or so I'm told. And there were other tax restraints in place for the school district way back in 96 that are just coming to roost in city and county governments. Can I clarify? Is it the city budget is going to go up by 4% but the tax levy is going to go up by 1.5%? They throw different numbers out. Right. The 2006 city budget would include a 4% tax levy increase. Right. But the percentage increase, the tax rate will go up 1.5%. And I think that's just because of added construction in the... Expanding property tax base is what really boils down to. And actually the increase is $783,255 over last year. So it's very tight though. Again, we had the mayor here last month just talking about what seems to me to be fairly grim realities in the city's government but really just about any place is really... All over the state, if you've been watching the news from other Milwaukee television whatever you're seeing, fire departments starting to talk about fees per call or accident scenes for paramedics. I live in a rural area of a septic tank. You've got to notice from the county we're going to be assessed so much per year for the first time for having a septic tank and presume that's a fee that's going to go to the accounting planning office who monitors that area of the sanitary code. So I think you're going to see more of that in Wisconsin. It's going to be interesting to see how the people react because this is typical of what other states have done. Other states have had rather draconian controls on spending increases but they've always had a menu that's spread wide on fees and this is something Wisconsin's never really had so it's been on a property tax. It's the basis of local supporting of services. Now if we start getting into fire fees and police fees and septic fees and all kinds of road fees we see a whole different way of paying for government it would be interesting to see how the public reacts to that. Well, the one thing that we can maybe just segue into talking about the county budget which again is coming in with a slight increase but nothing terribly significant but the nursing home issue obviously continues to be very, very tricky for the county. I think the, I may have this wrong but the projected loss in 2006 for the county nursing homes is in the range of about five million dollars. Nobody's talking about, at least none of the supervisors that I hear are talking about a county sales tax and there are, and Cal maybe you know or you guys know what number of counties in the state of Wisconsin have county sales tax usually at point five percent but it's a fair number. It is, it's the majority I believe. And particularly in the eastern part of the state you find where there's been resistance and I think it may be due to the fact that property taxes around here have been fairly high because we just have a high level of service. Yeah, and it'll be interesting just to see and I think there's hardly a politician and they're all politicians instead of legislators these days and we'll talk about that later but that really wants to talk in any way shape or form about creating a new tax. Now the fee issue that I think that you've talked about is more palatable in general. When we've been talking about Tabor and the taxpayer bill of rights and how high income taxes are in Wisconsin and so forth sometimes we fail to take into account that user fees are not as widely used. I mean they're certainly in place but not as bad as other... Sheboygan had a wheel tax. I was on the council and I voted for the wheel tax and that was just to take care of the roads and services and any, it was minimal but it provided a base and of course this new council last, I don't know, two, three years or two, three years ago they got rid of the wheel tax. So that fee that was there they could probably use now. Well actually I think it's actually in place until 2007. Oh it is. I thought they deleted it. But there were some promises at least that that would not be in place anymore. Is that a good idea or should we keep a wheel tax? It's not much, it's ten dollars I think if I'm not mistaken. I don't think any tax is popular. And I think the key is whether it's going to be a trend. I've seen other communities that are now looking at pothole fees and so on in order to keep up their roads and if this becomes the norm I think people are going to say how do you want your poison? Do you want to pay a fee or do you want to put it on your property tax? Which one do you want? And people will make some choices. And one of the things about sales tax is that it's how you pay and sometimes if we're paying every time we go to a store or whatever it seems a little less painful than when you get your tax bill in December just at Christmas time and you realize that it's costing you three or four or five or six hundred dollars a month just in property taxes to occupy your house. Again I think it is a case of how do you want to take your poison. It's in a regressive tax just like the property tax and is your base greater with a sales tax? I think the conclusion of many people it is. Yeah. Because businesses and others who are taking or tourists that come to your community are paying and people who are just passing through in general are paying through their purchases. And some properties are exempt from the property tax or some non-profit agencies, churches and other agents are exempt so but if they were paying a sales tax they'd pay a little bit. Now some states and some communities across the country are starting to think about getting around some of the exemptions on non-profit organizations by charging them what in essence they're calling a users fee that even though one has a church on that property or the Red Cross or whatever, the Girl Scouts, whatever it might be you're still using municipal services and you ought to be paying at least for that so I know some people are trying to go down that road of broadening the tax base by making that distinction and it'll be interesting to see how that survives those amendment challenges. Didn't the stormwater fee apply to all properties? Everyone, yes. And so there were... They called it a user fee and it really was a tax because it applied to everybody. I mean I could not say I don't want to participate in the user fee but I had to so it's a tax. I think you're going to see more and more of that in attempts to widen tax bases and try to get various non-profits to at least pay for police and fire protection along the same kind of logic that you saw there. And they're not using the word tax because tax always raises those kinds of first amendment issues at least with religious organizations. And I think for people who can itemize deductions of course having the property tax is a nice deduction that you can capture so far. The federal panel is saying... The federal commission, the presidential commission who knows what's going to happen with that especially as we come into an election year and I don't think they're going to do anything between now and next November anyway but their proposal that the administration is looking at is eliminating the deduction for state taxes income taxes and local property taxes. And of course this gets back to the fact that... I should say in return for which I think they're going to notch down the income brackets another percentage point, if I remember right. I was looking at it in the Wall Street Journal. So if you live in a low state tax environment and you make fairly decent incomes you're maybe going to come out a little bit ahead and you have to kind of do the math. But if you're clearly a state like Wisconsin it's going to get hammered. And I think that's sort of the agenda here is to try to cut off the spit. Try to at least make state taxes even more probably less palatable than they already are for people. Because I can kind of work on my taxes like you aren't saying well Wisconsin's kind of high here and I don't necessarily like it but... Well you can always rationalize our high property tax because if you're in a 25% tax bracket it means the feds to your detectability of the property tax is picking up 25 or a quarter of your property tax. When you don't have that anymore it's kind of tough to rationalize the higher rates that we do have. That's the interesting thing about the tax burdens when we compare states they always come out and say we're 6th per capita but when you start taking in total tax burden including the detectability we go from 6th to 11th because you can deduct from your federal tax. So that will surely raise our real net tax burden if the detectability is scrapped by the feds. When you see the statistic like there was something else when you were talking Cal that I was thinking about when you see that ranking in Wisconsin as 6th is that including the property taxes there's some sort of a tax that other states pay. It's a state and local it doesn't include usually fees it's the visible sales tax, income tax, property tax. Exactly. And so when you start looking at other fees that other states pay then the rankings maneuver down in Wisconsin almost to the middle of the pack if I remember right. It's pretty close. And that's not only what individuals pay you can get into states like Texas and Louisiana others that have severance taxes that deal with oil, gas and so on and mineral taxation which if you net that in that helps to keep their tax burden down as well. Well I just remember in law school just the basic concept that was conveyed to us and obviously can be conveyed long before you get to law school is that taxation is really social policy. You really talk about how your society is structured and what's important to you and how income gets distributed and all of that based on your tax policy. I always enjoy the discussion about and we're certainly getting a little far afield here from city and county politics but tax simplification and what would we do if there was truly a simple in quotes tax system and probably you can't do it because we have such complex social structures that are governed by who pays what and how it goes and so forth. I mean it would really be a revolutionary thing if you just said just pay 15% The flat taxers are kind of like the flat earthers you know Nobody escapes it. Europe has simplified by going basically to a value added tax which is huge. Which is a national sales tax before the consumer gets the product. I have always been opposed to sales taxes but the more I see what has been happening to our federal tax code I'm not so sure that the value added tax isn't a better way to go. I mean there are like 13,000 lobbyists in Washington all clearing water for some special interest and every tax code revision we've had has always been a boon to somebody who's lobbied most successfully to somebody else. Exactly, exactly. I'm not so sure that maybe a value added tax where private and public and everybody pays and you can try to at least modify your tax burden by your spending habits so I don't really need to buy this and make those type of choices is better than being the victim of somebody else's successful lobby effort and that's really what the tax code has become. And the Presidential Commission did in fact look at a package that did include a consumption tax of one kind or another there weren't too many details about what was exempt and what was included in that because you may want to like we do in Wisconsin with the sales tax you may want to exempt certain kind of basic food stuffs and medicines and those things. Legal services? Yeah, well there you go. They're in line with the rub. You may start opening the door to the exemptions and pretty soon the Gucci Gulch starts working and you've got lobbyists making their case for why their services should be exempted. So there's nothing simple about taxes. There is no way to simplify because we can't simplify I don't think our society quite as much but in any event. Back to more mundane. Just before I came to the radio they were talking about the bus service. And it wasn't to get rid of it but there's got to be a better way because you know when you count the federal dollars and the city dollars it was over three million dollars and you're carting people around the city now you're carting nobody around the city maybe a few people around the city. So they said how can you better provide a service? Now Mayor Perez says the $3 million plus budget. The Mayor says and I have to agree that there are no city services by and large that you can make money on or that breaks even. I know the register of deeds is always very proud that her department does not cost the county anything but every piece of paper you bring into the register of deeds you bring a check along with you because she won't take any paper without a $10 or $12 or a $7 check and that's fine I mean those are user fees for recording your deeds or you're getting a birth certificate or whatever. But what city services do we have that make money for us or break even? The police don't the fire department certainly doesn't I mean it's all about services so it's just a question of who you serve and what is again what is the basic service? I am representing a fellow who was on social security disability cognitively disabled he actually got a job and good for him and he's making not great money but he's supporting himself now and it's a real success story I think and he has a bus pass $48 a month because he works out in the new industrial park and his family has to take him out when he works Saturdays he gets overtime because the bus service doesn't run when he needs to go but what's this fellow going to do who's a working member of society but certainly can never have a driver's license how's he going to get to work? What can you do with $3 million to provide a service to that guy? How many Saturdays are there in a year? You know 52, 50 Saturdays in a year? Well there's that dependency because we get so much federal money for it exactly can't we just hire some vans to run people around I mean it may not be you know my kids take the bus home from school they take the bus here and there or used to not so much anymore I remember growing up here I took route 5 down to the library every Saturday it was just kind of a tradition so I don't know that gets to my view wouldn't it be nice to bring some imagination to government and how we provide services and there's no better place I think to start locally because you can actually affect some changes you can say let's look at the city bus service let's look at the library which breaks my heart that it's taking this hit that does seems to be the favorite whipping boy lately for budget cutters but how can we provide services and with that in mind people who use Meade library who are not residents of the city by and large don't pay for it city people who use the police department also pay for the sheriff's department are there ways that we can be looking at redistributing the equity well I think you have to start looking at regionalization of the service library districts for example would be one thing that Meade could participate in a district that would include those who use the library different tax municipality would be taxed in that Mississippi for library services that's one way it's averse to anybody who wants expansion of government because it's a new type of government but it is a way of doing it the sheriff's department well you could say that some communities because of their size maybe don't warrant having their own police department maybe the sheriff's department ought to be in a county of 110,000 one of maybe only two police departments there are municipalities hundreds of thousands of people that have one police department and they work very well we have what six or seven police departments in this county and I work for a large number of them so we'll just those are the types of questions that maybe we should be asking is how many different jurisdictions should plow how many should have fire departments how many should have police departments and I think that's the key that we need to address how many school districts should we have when you try to close a school or merge a school district everybody wants to have the same mascot they did when they were in high school they don't want to make a change well it's going to take change I think if you're going to try to save money I'm intrigued with the library because our family we've been staunch supporters of the library I'm sure all of us sitting here have been in a very similar facility the new the EasyCat system which allows me to get a book from Cedarburg in a day or from Lakeland College to me it's kind of a dream come true we all talk about well where do we want our tax money spent I like my tax money spent on the public library system but I do think looking at different ways of doing business whether it's taxicab service or expanding eastern shores library system and having equity I'm interested in your reaction this past summer I believe the legislature passed a bill that allows cities to abolish their police departments which previously had not been a city power so if you had a police department you had to keep it I understand that there is a bill that is going to be introduced that allows people in the city to deduct from their property taxes the money that is allocated to the sheriff's department so in other words because we city dwellers pay twice what do you think is there a different way of looking at providing police services can in fact a county sheriff's department serve falls and Plymouth and Kohler the city obviously would be a much bigger sheriff's department than it is now is that a good idea I think both of those measures are going to at least push the issue for discussion where it seems no one really wants to talk about it I was thinking as you were speaking Calibut we almost have boutique government services but we want them at wholesale prices maybe that's what we really need to have is that discussion that government isn't free as much as the national government seems to think so in the last 40-some-odd years but they got to pay for it and if you're not willing to pay for it you got to look at consolidation and give up the right to live in a small little school district where everybody may know their names at the school board meaning and have larger areas and not enough it didn't Scott McAllen when he was governor try something the ultimate goal that these jurisdictions will have to get together and work and maybe eliminate themselves but of course it raised such a big hullabaloo it died and of course it was such a memorable commission I can't remember the professor oh yes I know exactly who you're talking about too two senior moments three wanna make it four he was a UW professor and we talked about reconfiguring the government it wasn't the Kerger commission but a memorable the Kettle commission I knew it began there you go but you are the youngest person here thank goodness I came up with it Don Kettle convened the commission and that was under McAllen wasn't it it was a Tommy Thompson the report came under McAllen and really just talking about ways that we can reconfigure and rethink and boy we don't get very far do we? when you put it out there all the special interests come in and say you can't do it not in my backyard well and people like their local police departments whether I'm in a village or if I'm in a small city I mean we have two small cities relatively small Plymouth and Sheboygan Falls they love their police departments there they love our police department here and the sheriff doesn't have quite that because it's a broader and not based in a particular municipality it's a county wide system but they just got I just wanted to say a new dog and their dog's name is Don the dog Sheboygan Falls dog Sheboygan Falls dog is Larry and then the city has its own dog now it's D-U-C I would say geek but I bet it's it's three dogs Duke so we've got you know we've got three dogs and you know maybe we can share the full dog employment but in any event we got a local anonymous donor who's going to give money for tasers and certainly that's a relatively controversial issue one way or the others but the city council has always said we're okay with tasers as long as we don't have to pay for them and apparently an anonymous donor will come forth and give some money for that so you know those are all I mean we just we're real comfortable with our own little parochial entities and I think it really is very it is the issue is going to have to be forced and the forcing of the issue will be the continuation of the caps plus looking to fees and if there's public outrage over the fees then somebody said what do we do now and then the option is real cuts and real mergers but the issue has to be forced and there are going to be real cuts because if the with the mandatory increases in wages energy and utility rates for goodness gracious sake the this additional $230,000 to operate the new police station if it's constructed in June of 2000 big stuff so well it's been a pleasure as always we've solved the problems of the world