Governor Walker has proposed significantly increasing state support for public schools, but the bulk of the increase would be distributed to school districts in a way that does not take into account the challenges faced by districts with high numbers of students coming from families with low incomes.
We don’t yet have the full details on what the Governor is proposing for the state’s education budget, but he released a brief summary earlier this week. His budget proposal includes additional funding at aimed addressing the challenges of rural schools, increasing student achievement in summer school programs in Milwaukee, and helping school districts connect students with disabilities to employment. (Read more about his education proposals in this AP article: Walker Proposes Big $649 Million Boost for K-12 Schools.)
By far the biggest component of the education proposal is an increase in the amount of financial support that the state provides to school districts. Read more
Federal policy guidelines that were adjusted for inflation last week are worth examining because they help illustrate the challenges faced by low-income working families. They show, for example, that single parents with one child are currently ineligible for BadgerCare if they have a full-time job that pays more than $7.81 per hour!
The federal poverty guidelines are updated early each year, and the 2017 guidelines that were issued on January 31 increase the Federal Poverty Level (FPL) by 1.3%. That raises eligibility for many federal benefit programs, such as Medicaid, food stamps and child care subsidies. An updated table on the Wisconsin Budget Project website shows what the poverty level is for different family sizes and how that affects eligibility for different public benefits. It also translates the annual poverty level figures into monthly and hourly incomes. Read more
A tax break that has cost far more than originally anticipated has resulted in enormous tax breaks for a wealthy few, according to a new analysis from the Wisconsin Budget Project.
The Manufacturing and Agriculture Credit nearly wipes out state income tax liability for manufacturers and agricultural producers in Wisconsin. Only about three out of every thousand individual income tax filers receive this tax break, but in 2017 alone the credit will cost the state $299 million in reduced revenue. Looking ahead, the cost of the credit swells even more, ballooning to more than $650 million for the upcoming two-year budget period that starts in July 2017.
The cost of this tax cut has taken lawmakers by surprise. In fact, the credit is now estimated to cost more than double what lawmakers originally thought when the amendment creating the credit was quietly slipped into the 2011-13 budget bill.
Nearly all the value of the tax break goes to the very wealthy. Read more
Mediocre Revenue Projections Beat the Low Expectations
A modest upturn in the state revenue projections and a significant reduction in state spending estimates have created a much better outlook for the state budget.
Before elaborating on the latest numbers, which were released by the Legislative Fiscal Bureau (LFB) last week, I have to admit that the new state tax collection numbers are considerably better than I expected when I wrote a very cautionary blog post about the next state budget a week or so ago. This is one of two recent occasions (along with my prediction that the Packers would lose to Dallas) when I am very happy to have been wrong.
Although the new revenue forecasts are also significantly better than the Department of Revenue projected two months ago, they are nothing to brag about. In fact, the latest tax collection estimate for the current fiscal year is $281 million less than the estimate that the biennial budget bill was based on. Read more
1. Compared to other states, Wisconsin has a lean public sector
Wisconsin had 2.1% fewer state and local government employees than the national average in 2015 given our population size, according to a new analysis from the Wisconsin Budget Project. Wisconsin had a leaner public sector than all but 15 states. Read more
Many Wisconsin low-income families miss out on their full tax refund because they do not claim tax credits for which they are eligible —particularly the Earned Income Tax Credit, the Homestead Tax Credit, and the federal child tax credit. Please help us get these flyers, which explain the eligibility for these credits, into the hands of low-income families who could benefit.
January 18th UPDATE: Sometimes it feels good to be wrong — like when the Packers outperform my pessimistic predictions and when new state revenue forecasts are stronger than I anticipated. So I’m very happy that the revised revenue projections released this afternoon by the Legislative Fiscal Bureau (LFB) are considerably better than I expected when I wrote our Jan. 17th blog post. (Read more here.)
The new LFB numbers indicate that a combination of lower-than-expected spending and higher-than-expected tax revenue will be enough to maintain a comfortable budget balance in the current fiscal year, and also enough to fund the amounts requested by state agencies in the next biennium. That’s a huge relief after the very slow revenue growth from July through November, which suggested that the next estimate of revenue collections was likely to be down, rather than up. This year’s revised revenue collections are still below the level forecasted a year ago, but are now expected to be considerably stronger in the next biennium than the Department of Administration estimated in November. Read more
Low-paid workers across the country got a raise this month, as 19 states increased their minimum wages. A higher minimum wage means that workers will be better able to make ends meet and support their families, but the benefits don’t end there. More income in the pockets of workers translates to additional economic activity, and workers spend their raises at local businesses buying groceries, getting their cars fixed, or paying off medical bills.
The 19 states that increased their minimum wage this month are Massachusetts, Washington, California, New York, Arizona, Maine, Colorado, Alaska, Florida, Missouri, Montana, New Jersey, Ohio, South Dakota, Arkansas, Connecticut, Hawaii, Michigan and Vermont.
Unfortunately, Wisconsin workers and communities will not receive any of the benefits of a higher minimum wage. Wisconsin is among the minority of states that have a minimum wage stuck at $7.25 per hour, a level that was last increased in 2009.
Because Wisconsin is not among the states that have set a higher minimum wage, a full-time, full-year worker in Wisconsin still earn as little $14,500 per year. Read more