More Debt. Higher Property Taxes. What’s Not To Like?

Earlier this week the MacIver Institute’s Bill Osmulski offered an analysis about deteriorating local road conditions.

In “Local Roads Clearly Not A Local Priority,” he observes:

…[L]ocal governments throughout the state claim their roads are falling apart and they don’t have any money to fix them. That’s not true…Local governments have more than enough funding available to maintain their roads…[B]y neglecting road repairs, they seem to believe they can manufacture a crisis…to get more state funding. There’s no reason why most of them can’t address their road funding needs with existing resources.

Osmulski then explains that the principal source of funds within local control is borrowing.  He says (emphasis added):

When local governments borrow money, they get to collect extra property taxes to pay it back. In Wisconsin, local governments can borrow up to 5 percent of their total value. They are then allowed to raise property taxes beyond their levy limit to make the payments. This is designed so local governments can fund…road construction, without dipping into their general fund or worrying about levy limits.

He continues:

There’s nothing stopping [local] officials…from issuing some bonds to fix roads if the community feels that is a priority. They could then raise property taxes above the levy limit to make the debt service payments. The bottom line: there is money.

Osmulski’s suggestion of more debt (as an alternative to raising the gas tax) mirrors the state’s approach under Jim Doyle and Scott Walker. Both governors acted like a family that relied on credit cards to spend $100,000 a year when their income was $70,000. It’s an approach that has worked so well for the state transportation fund, why not take it to the local level?

After all, as Osmulski helpfully points out, “Fortunately, [local governments] still have a combined $41.2 billion in borrowing authority available to them.”

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