Budget Toolkit: Introduction
Why the State Budget Matters
Countless times a day, you are affected by state budget decisions. When you turn on the water, send your child to school, turn on a light, or drive on a road, you are impacted by state spending actions. You help pay for these and other benefits every time you buy something, get paid, or even just by owning property.
The state budget is a collection of trade-offs. The budget must be balanced; the state can only spend as much money as it collects through taxes, fees and other sources. That means priorities must be weighed against each other. Ideally, the state budget is a reflection of our public priorities. Do we, as a state, value our tradition of emphasis on public education and infrastructure, and are we willing to fund those services? Or do we value lower revenue from individuals and corporations even if it means minimal community assistance for our children, seniors and working families?
Wisconsin: Doing More with Less Since 1848
Wisconsin continually ranks among the nation’s most livable states. Wisconsin is ranked 3rd highest in ACT scores (1), tied for 3rd lowest in teen dropout rate (2), as 8th smartest state (3), 10th lowest in percent of elderly population in poverty (4), and as 12th healthiest state (5). Our overall poverty rate and unemployment rate are below average, as shown in Chart 1. And Wisconsin has one of the nation’s lowest percentages of people without health insurance,
Yet we do all this with relatively few state resources. Wisconsin doesn’t have revenue from oil or gas like some states, and we don’t have a New York City or a Disney World within our borders to bring in lots of tourism dollars. Chart 2 shows that the percentage of adults with a college degree in Wisconsin is below the national average, as is the percentage of households in our state with an income of $200,000 or more. Personal income per capita in Wisconsin is 6% lower than the national average(6). In addition, Milwaukee is one of the country’s poorest big cities.
How do we do it? How have we as a state been able to secure a high standard of living for ourselves using relatively few resources? Wisconsin has a history of innovation in education, health care, and service delivery. We can see the results today. This innovation should be continued and adequately funded. The state budget is one of the most important methods we have for insuring that Wisconsin continues to thrive.
As with any budget, there is revenue coming in and money being spent. Ideally, revenues are at least as great as spending, although that’s not always the case. Let’s first look at revenue sources.
1. ACT, based on scores for states testing 50% or more of their high school graduates, 2010.
2. Annie E. Casey Foundation Kids Count Data Center, 2009 data.
3. Morgan Quitno rating of states based on 21 factors related to education, 2006-07.
4. U.S. Census Bureau, 2009.
5. United Health Foundation rating of states based on 22 indicators of health, 2009.
6. U.S. Department of Commerce, Bureau of Economic Analysis, 2009.