Tuesday, October 9, 2007

M7 should oppose Waukesha tax on Milwaukee!

Where's the Milwaukee 7 when we need it?

Waukesha's County Board is proposing to raise bus fares by twenty-five cents on riders who travel from Milwaukee to Waukesha.

Waukesha's Board, an ardent foe of any and all tax increases, has tossed fiscal restraint aside when it comes to Milwaukee County residents, giving new meaning to Governor Thompson's pledge "to stick it to Milwaukee."

The Board's rationale, tough fiscal times, is hard to swallow since it recently found $1.75 million to help fund an interstate highway interchange to the upscale, Pabst Farms regional mall in Western Waukesha that planners had forgotten to finance.

This "zone fare" increase will hurt the ability of Milwaukee's workers to get to jobs in Waukesha and hurt Waukesha's employers who face a growing shortage of skilled and semi-skilled labor.

Economists call this a spatial mismatch-potential workers are concentrated in one place, Milwaukee, and the jobs are in another, Waukesha!

The Brookings Institute in a study of the problem could easily have been talking about Milwaukee, routinely rated one of the nation's most segregated cities, and Waukesha when it observed that sprawl exacerbates racial inequality: "In areas where blacks are more segregated from whites, blacks tend to live apart from job rich suburban areas (where a disproportionate share of whites live)."

The "zone fare" increase, a tax on Milwaukee labor, will only exacerbate these problems because as bus fares increase, ridership will decrease!

Waukesha had a surcharge only a few years back. When the Milwaukee labor tax was eliminated in 2003, ridership on the route increased by almost 10%.

It's a basic rule of economics that when prices increase, the quantity demanded decreases and conversely. Implementation of this Milwaukee labor tax will decrease ridership.

Waukesha's leaders need look no further than Milwaukee County to see how incremental increases in fares have reduced ridership!

The Milwaukee 7, Southeastern Wisconsin's effort to promote regional economic cooperation and growth, has argued convincingly that solving the region's shortage of skilled workers is key to growing SE Wisconsin's economy.

Waukesha's misguided "zone fare," a tax increase on our poorest citizens, will intensify the region's spatial mismatch and undermine economic growth.

It's easy to talk about regional economic cooperation. The leaders of the M7 need to walk the walk.

They can start by urging the Waukesha County Board to drop this bad idea.


Dave said...

It's odd to me that conservatives believe that lowering taxes will create more jobs for everyone but then at the same time don't realize that raising transit fees will reduce jobs.

Michael Rosen said...

Economists from all political perspectives recognize that incremental changes in tax rates have virtually no impact on job creation or business location decisions.

George H.W. Bush called supply side economsics vodoo economics before he agreed to join the Reagan ticket in 1980.

Recall that economy grew faster after the Clinton era marginal income tax incraeses then it has after the Bush era tax cuts.

The modern Republican Party is the party of the economic elite. It's real goal is to assist that elite and the coprorations they run in maximizing profits and in reducing the size of government as Grover Norquist, conservative ideologue, has said.

Maximizing profit at the expense of workers and the public good, to use Adam Smith's phrase, does not have mass appeal. So they sell their narrow economic objective by saying it will create jobs and promote prosperity. Neither are true as the current Bush "recovery" demonstrates.