This Year’s Tax Collections Are Expected to be $351 Million below Original Estimate
A new state report about projected state revenue and the agency budget requests reinforces concerns that the upcoming 2017-19 Wisconsin budget will be another difficult one to balance. The primary problem is that tax revenue growth is well below the level anticipated when the budget bill was enacted in July 2015.
I’ll get to the specific numbers in a moment, but the bottom line is that the state’s large tax cuts, coupled with lower-than-anticipated job gains and revenue growth, mean that as state policymakers develop the next state budget they are going to have to either continue to squeeze spending or close some tax loopholes. Read more
Trump Owes It to Workers to Raise the Floor for Wages
The broad popular support for increasing the minimum wage was demonstrated quite clearly on November 8 when voters backed increases in all five states where the wage floor was on the ballot. President-elect Trump should back up his promises to help the working class by pushing for a significant boost in the national minimum wage, which has been stuck at $7.25 per hour for almost eight years.
In Arizona, Colorado, and Maine, voters approved increases in their state minimum wages to $12 by 2020. Voters in Washington State went further by approving a measure to raise the minimum wage to $13.50 by 2020, and the electorate of Flagstaff Arizona approved an increase to $15 by 2021. The state-level ballot measures in Arizona and Washington also expand paid sick leave to more workers.
The increases in the pay floor were approved by significant percentages: 60% in Washington, 59% in Arizona, and 55% in both Colorado and Maine. Read more
This year, voters in Wisconsin voluntarily raised property taxes on themselves by a record amount to pay for additional investments in local schools. The increase could signal a growing frustration with the strict limits on school district budgets that have been imposed by state lawmakers.
The state limits the average amount each school district may spend to educate students, but voters in a district can override the spending limit by approving a referendum lifting the spending caps and raising their property taxes. Voters also determine via referendum whether to allow a school district to issue debt for big capital projects, such as building a new school.
Prior to 2011, state lawmakers allowed regular, relatively predictable increases in the amount school districts were allowed to spend on each student. That approach ended in 2011. Since then, lawmakers have allowed either small or no increases in the caps they impose on school district budgets. Read more
On Tuesday, voters in dozens of school districts across the state will determine whether to provide additional resources to children in public schools. The dollar amount school districts are asking voters to approve is far larger than the amounts that were on the ballot for the 2012 or 2008 presidential election.
Next week, school districts will ask voters to approve:
- $1.14 billion in borrowing for new construction and building updates:
- $140 million in increases to school district budgets. These increases boost school district budgets for a set period of time and then expire, at which point school districts revert to their previous budget levels; and
- $59 million in increases to school districts budgets on a recurring basis.
The requested amounts dwarf the amounts on the ballot for the two most recent presidential elections. The amount of borrowing that is on the ballot this November is three times higher than the proposed amount four years ago; the proposed amounts for non-recurring increases in budget caps is six times higher than it was four years ago, and five times higher for referendums to lift the budget caps on a recurring basis. Read more
The Combined Effects of Two New Budget Reports Create Significant Fiscal Challenges
New tax collection numbers released yesterday are the second dose of worrisome budget news in Wisconsin this week. Right on the heels of a report showing that the budget balance was well below the anticipated level after the close of the 2015-16 fiscal year, new tax collection figures reveal that revenue fell well short of the projected level during the first quarter of the current fiscal year.
Taken together, the two documents released this week indicate that it could be very challenging to finish the 2016-17 fiscal year in the black. Read more
Most counties in Wisconsin have fewer children than they did five years ago, with some of the biggest declines occurring in counties in northern Wisconsin, according to new population figures released by the Wisconsin Department of Health Services. The decrease in the number of children has led to declining enrollment in many rural school districts, presenting those districts with a host of financial challenges that stem from trying to pay for fixed costs with diminished resources.
Between 2010 and 2015, the number of children in Wisconsin declined by about 42,000, from 1.34 million to 1.30 million, for a decline of 3.2%.
The decline was most severe in the northern part of the state, with virtually every county in the north experiencing a drop in the number of children. The counties with the largest declines in percentage terms between 2010 and 2015 included:
- Adams County, -16.0%;
- Iron County, -15.5%;
- Lincoln County, -14.1%;
- Bayfield County, -13.3%; and
- Rusk County, -11.9%.
Despite Delay in Debt Payments, Budget Remains Very Tight
An annual budget report issued yesterday has a little bit of good news for the state, but also disappointing news. The bottom line is that the state’s budget balance grew this year, but by less than the budget bill was counting on. As a result, it could be difficult to keep this year’s budget in the black if tax revenue continues to fall short of the expected level. [See the update below about the new tax collection figures.]
The new Annual Fiscal Report shows that Wisconsin finished the 2015-16 fiscal year with a balance of almost $314 million. Although that’s pretty good news, it’s also a bit disappointing because even though the balance grew by $87 million this year, the budget bill had assumed the state would have about $77 million more in its balance at the end of the 2015-16 fiscal year. Read more
The Supplemental Nutrition Assistance Program (SNAP), also known as FoodShare in Wisconsin, helps Wisconsin families put food on the table. But we know now that it accomplishes much more than that.
Research increasingly shows that SNAP, formerly known as Food Stamps, can ward against the long-term effects on children of experiencing poverty, abuse or neglect, parental substance abuse or mental illness, and exposure to violence — events that can take a toll on their well-being as adults. As a new Center on Budget and Policy Priorities report finds, SNAP helps form a strong foundation of health and well-being for low-income children by lifting millions of families out of poverty, improving food security, and helping improve health and academic achievement with long-lasting consequences.
It’s doing all that across Wisconsin. SNAP is improving our children’s futures.
Workers at food banks see first-hand the boost that SNAP gives to children and families. “After a good job, SNAP is the second best hunger fighting tool in our toolbox,” said David Lee of Feeding Wisconsin. Read more
New data from the Wisconsin Hospital Association show that the federal health care reform law has had the desired effect of causing a sharp drop in uncompensated care. That’s great news because much of the cost of uncompensated care for people who are uninsured gets shifted to other patients and contributes to higher rates for people with insurance.
The reduced spending for uncompensated care – which is the total of charity care and bad debt – also has the benefit of creating a great opportunity for hospitals to make upstream investments that promote public health and alleviate some of the factors causing severe health disparities.
The new data demonstrate that uncompensated care expenses borne by Wisconsin hospitals have dropped precipitously since 2013, as key parts of the Affordable Care Act (ACA) were being implemented – including the new insurance Marketplace and the expansion of coverage for childless adults. After those provisions had been in place for two years, total uncompensated care fell in Wisconsin by $534 million in fiscal year 2015, a drop of 36.8 percent from the 2013 level. Read more
Republicans who control the U.S. House of Representatives have proposed a budget framework that would raise the incomes of millionaires while cutting services for families and individuals with low and moderate incomes. The leader of the House of Representatives, Paul Ryan, represents a Wisconsin district that includes the cities of Kenosha, Racine, and Janesville.
The budget framework, called A Better Way, includes an emphasis on cutting taxes for people with very high incomes. According to an analysis by the Urban-Brookings Tax Policy Center, the GOP House tax plan would:
- Cut taxes for millionaires by an average of $330,000 per household in 2017, with their after-tax incomes rising by 15%. In contrast, the middle fifth of households by income would receive an average tax cut of $260, boosting their after-tax income by just 0.5%;
- Cut taxes for the top 0.1% of the population by income – a group with an average income of more than $3.7 million – by an average of $1.3 million per household in 2017, increasing their after-tax income by 17%; and
- Cut taxes for millionaires by $2.6 trillion over the next decade, forty times the $56 billion in tax cuts that the middle fifth of taxpayers would receive.