1. Changes in Shared Revenue and the Effects on Wisconsin Taxpayers Jenna Griffin, Jennifer Klippel, Kathryn Maguire, Brendon Riggs May 5, 2006

2. Overview The Shared Revenue Program Measures Analytical Approach Results Conclusions

3. The Shared Revenue Program Background Goals – Property Tax Relief – Guaranteed Tax Base

4. Formula Components Per-capita Utilities Aidable Revenues – Local purpose revenues – Tax base weight Minimum Guarantee

5. The Issue Changes to Shared Revenue – Level-Funding – Discontinuation of Formula – Per Capita Reductions Circumstances – Medicaid – Truth in Sentencing – School Aid

6. Measures of Fiscal Disparity Tax price: price to taxpayers, in mills, of a given level of expenditures t/E ratio: tax price of $1,000 in per capita expenditures – low t/E ratio indicates a high level of fiscal well-being Coefficient of variation: measures of disparity across time, using variation in t/E ratios for each year (standard deviation ÷ mean x 100) – high coefficient of variation (given as %) means high disparity Taxpayer equity: municipalities with similar property tax rates should be able to afford similar expenditures, regardless of property wealth

7. Analytical Approach Municipalities by 2000 EQV deciles – not population weighted – not counties and school districts Milwaukee analyzed separately Interaction with School Aid

8. Municipal t/E Ratio, 2004 MononaIngram Per-Capita Expenditures$1,400$520 Municipal Mill Rate5.4 mills2.0 mills t/E Ratio (Mills per $1,000 Per-Capita Expenditures) 3.843.82 Per-Capita Intergovernmental Aid $150$510 Per-Capita Equalized Value$98,000$16,000

9. Coefficient of Variation of Mills-per-$1,000 Expenditures

10. 2000 Mills-per-$1,000 of Expenditures by EQV Deciles

11. 2004 Mills-per-$1,000 of Expenditures by EQV Deciles

12. 2000-04 Cuts in Shared Revenue as Percent of Total Revenue Loss

13. Impact on Municipal Levy 2000-2004

14. Impact on Combined Levy (School and Municipal), 2000-2004

15. Coefficient of Variation of Combined Municipal and School District Mill Rate

16. Alternatives Return to Equalizing Formula Revisiting Land-Use Assessment Policy Reconfiguring the Current Expenditure Restraint Program Diversifying Municipal Revenue Sources

17. Conclusion Formula Decreased Disparities Changes Increased Disparities Long-term Consequences

18. Questions?