Senate Committee Endorses Constitutional Constraints on State and Local Revenue and Spending

Tuesday, March 6, 2012 at 12:56 AM by
The Senate Committee on Judiciary, Utilities, Commerce, and Government Operations held an executive session today, March 5, on a proposed amendment to the Wisconsin Constitution to create a number of permanent restraints on state and local revenue and expenditures.  The proposal, Senate Joint Resolution 48, was recommended by the committee on a vote of 3-2.

SJR-48 would do the following: 
  • Establish formulas for capping the rate of revenue growth for the state, each school district and technical college district, and most other local governmental units. 
  • Require state revenue collected in excess of the cap to either be deposited into a budget stabilization fund or returned to taxpayers in the next fiscal year. 
  • Require local revenue in excess of the cap to be returned to taxpayers in the next fiscal year.   
  • Limit spending from the state budget stabilization fund – so it can only be used: a) to provide tax relief, b) for certain emergency events, or c) in a fiscal year in which the amount of allowable revenue is greater than the amount of collected revenue.
  • Require approval of the electorate at a referendum before the state or any local governmental unit may: increase its allowable revenue above the cap;  incur debt service by an amount that exceeds 7% of allowable revenue; or exclude any tax, fee, or charge from allowable revenue.    
  • Authorize local governmental units to exempt themselves from any mandate imposed by the state if the state reduces the percentage of the costs that it pays, or from any new mandate if it is not fully funded by the state.
Like some of the other proposed constitutional amendments under consideration, this one would tie the hands of future legislators and local government officials by putting detailed state and local fiscal policy into the state constitution.  

SJR 48 was introduced in late October and was given a public hearing last Wednesday (Feb. 28).  If it is approved by both the Senate and Assembly this year, it would have to win legislative approval again in the 2013-14 session, before being submitted to a public referendum.  

Jon Peacock
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