Let me say right up front that the short answer to the question in the headline is no -- we should do just the opposite. But it's fun and instructive to think this through.
The question of secession comes up because, in the wake of President Obama's reelection, there are petition drives calling for various states to leave the Union, with those in the old Confederacy leading the charge. "Peacefully," of course. You know what a mess it became the last time they tried this.
It's not any too serious. This is just the conservative version of what my fellow liberals did when George Bush won. Conservatives talk of secession; liberals talk of Toronto.
To make matters more intriguing those fun-loving residents of college town Austin, Texas, so much like us, have countered with their own petition asking to secede from the state of Texas but remain part of the United States.
So, that got me to thinking again about Madison's place in the Wisconsin universe. It used to be that we were regarded by the rest of the state as quirky, but not alien. Governor Lee Sherman Dreyfus once famously and playfully described the city as "30 square miles surrounded by reality." But the joke is really on the late governor, because that was in the 1970s. Madison is now near eighty square miles in size.
So, Madison is expanding while reality is shrinking. This is right and proper.
But with a state legislature that is at worst openly hostile to our city and its institutions, and at best totally out of touch with it, how much benefit is there for us in being Wisconsinites?
From a pure municipal budget perspective the answer is not much. By my very rough calculations, Madison could self-fund all the services we get from the city, county, state and school district and still end up with enough left over to eliminate the city property tax (cutting your total property tax bill by 30%) and pump another $40 million or so into education or whatever our local priority might be.
Here's how I got to that conclusion. Every year, we send about $258 million in income taxes and about $160 million in sales taxes to state government plus another $64 million in gas taxes and vehicle registration fees. That's a total of $482 million.
In the city's 2013 operating budget (PDF) of $266 million, 72% of it already comes from local property taxes. State aid payments make up only about 13%, or $34 million. So, on the face of it, if we were simply allowed to keep all the money we send to the state and forgo state aid payments, we'd be roughly $448 million to the good.
Now, of course, if we were to drop out of the state, we'd also drop out of Dane County. The total county property tax levy plus sales tax is around $190 million. If Madison makes up about half of all that, we'd be able to keep $95 million for ourselves.
But the county also provides $500 million in services. (Why is that so much more than the $190 million property tax levy? Because most of the county budget is pass through funds from the state and federal governments.) Much of the county budget is made up of social services that benefit Madisonians, but a lot of it is in the county sheriff's department, which primarily benefits residents outside of the city since we have our own police force. Let's just say for the sake of argument that these things balance out, and that Madison benefits from half of Dane County's $500 million in expenditures.
That's $250 million in program costs that we'd have to pick up, but remember we're still $95 million ahead in county property taxes that we get to keep and $448 million ahead in state taxes that stay here. So even making up for Dane County's $250 million in services, the city of Madison is still $293 million ahead.
Then there are the Madison public schools. That's trickier because the MMSD boundaries are not coterminous with the city's. But just for the sake of argument, let's assume for now that they are. The school district's budget is $376 million, of which 15%, or about $56 million, comes from the state. So, accounting for the loss of the state school aids, we're now $237 million ahead.
In addition, our property tax base would be expanded because you would expect state government to be relocated, probably to the Fox River Valley. All those state government buildings would be torn down and replaced with taxable property. (We'd want to keep the Capitol as a tourist attraction.)
So, just on the numbers alone, Madison city government comes out way ahead, even if we were to take on 100% of the county and school costs.
Now, here's the problem. When state government leaves, so do all those good jobs. We might not miss the bunker-like GEF buildings, but we sure would miss the contributions to our economy made by all those state workers and the business and tourism dollars that come here because we're the capital city.
And the biggest problem of all would be the biggest engine in our local economy: the University of Wisconsin. But that one is more easily solved. You can make a case that the UW would never leave Madison because of its huge physical plant here, and with the state providing less than a fifth of its funding, a case can be made that the university would be better off cutting its ties to the state anyway.
So the financial case for secession is clear in one sense -- as a municipal government, Madison would be much better off. It's less clear in another. Could we make up for the loss of good state jobs?
This discussion has gone on long enough for today. Secession isn't going to happen. Tomorrow I'll make a case about why Madison not only should not leave Wisconsin, but why the city should strengthen its ties to the rest of the state.