Do You Like the Wisconsin Budget Project? Really Like Us?

Wednesday, September 15, 2010 at 7:16 PM by

It may sound insecure, but we’re hoping you like the Wisconsin Budget Project — on Facebook, that is. The Wisconsin Budget Project has joined the rest of the world in getting a Facebook page. Visit the page and “like” the Wisconsin Budget Project and you can get news about state fiscal policy, updates on budget actions, and news about Budget Project releases in your Facebook news feed.

Click here to go to the WBP Facebook page. Read more

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Senate Vote Tuesday on Eliminating $17 Billion Revenue Source for Health Care Reform

Monday, September 13, 2010 at 6:55 PM by

An amendment that will be voted on Tuesday in conjunction with a small business bill would undo one of the revenue sources for health care reform, requiring $17 billion of cuts in public health, prevention programs and insurance coverage. The revenue raising measure that the amendment would repeal broadens a requirement for businesses to report payments to vendors of $600 or more, thereby discouraging the underreporting of income by vendors. The expanded reporting requirement is expected to increase tax revenue by $17.1 billion over the next ten years by improving the ability of the IRS to keep track of business income.

The U.S. Senate is expected to vote tomorrow on an amendment by Senator Mike Johanns (R-NE) that would repeal the reporting requirement, and significantly weaken the health care reform law in the process. The Senate is also likely to vote on an alternative offered by Senator Bill Nelson (D-FL), which would significantly scale back the tax provision to reduce its scope and its paperwork requirements, but would make up for the lost revenue by reducing excessive tax subsidies and loopholes for oil companies rather than undermining health care reform.   Read more

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New Data Shows Wisconsin Still Has a Lean Public Sector

Thursday, September 9, 2010 at 3:52 PM by

Wisconsin continues its decade-long trend of having fewer state and local employees than the national average, according to a new issue brief by the Wisconsin Budget Project. The analysis is based on U.S. Census Bureau data and shows that Wisconsin has 51.8 state and local government employees (FTEs) per thousand residents, 4.4 percent below the national average of 54.2 FTEs. Wisconsin ranks 38th in this measure nationally, meaning only 12 states have fewer state and local government FTEs per capita.

Wisconsin is also lower than the national average in payroll spending for government employees. The per capita spending for payroll for all state and local employees in Wisconsin was 8.7 percent below average and ranked 30th. The payroll per FTE was 4.5 percent below the national average, although Wisconsin was above the median on that measure, ranking 21st nationally.

The total number of state and local government employees (FTEs) in Wisconsin grew slightly between 2008 and 2009, with the biggest growth in the technical college system. Read more

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New FY 2010 Tax Totals Are Right on the Money, Thanks to Corporate Profits

Tuesday, September 7, 2010 at 10:06 PM by

The Department of Revenue (DOR) has posted new estimates of General Fund tax collections in fiscal year 2010, which ended on June 30. Amazingly, the latest figure is within less than one one-hundredth of a percent of the January 2010 projection by the Legislative Fiscal Bureau (trailing that estimate by just $411,000).  On the other hand, the amounts generated by particular types of taxes vary greatly from the January projections.

The specific tax figures reinforce other evidence that corporate profits are rebounding faster than expected, but businesses haven’t been plowing those profits into hiring and payroll. As a result, individual income taxes and sales tax collections trailed the projected amounts, while corporate income taxes were much higher than expected.

Here are the changes (in millions) between the actual tax revenue and the January projections:

Individual income tax            – $65.8 M   (-1.1%)
General sales and use tax       -70.8 M   (-1.8%)
Corporate income tax           +134.5 M   (+19.2%)
Public utility tax                       -2.8 M   (-0.9%)
Excise taxes                            -3.0 M   (-0.4%)
TOTAL                                    -0.4 M   (-0.004%)

The total FY 2010 taxes are only $18.5 million (or 0.15%) above the General Fund tax revenue in FY 2009 – notwithstanding the tax increases contained in the 2009-11 budget bill. Read more

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There’s a New Website in Town

Wednesday, September 1, 2010 at 3:15 PM by

There’s actually two new websites in (cyber) town that we wanted to draw your attention to, both offering information and analysis about stimulus funds spent in Wisconsin.

The first is a brand new section of the Wisconsin Budget Project website devoted solely to Recovery Act issues. The information on this new page ranges from two-paragraph blog posts to in-depth papers. Whether you’re looking for updates about direct benefits in Wisconsin or details about additional FMAP dollars flowing to the state, this is a good place to start.

(While you’re at the Wisconsin Budget Project website, you should check out the wealth of other material there, including recent briefs on education spending in Wisconsin, and the number of manufacturing jobs in the state compared to the number of government jobs. And don’t forget our famous Tax Ranking Quiz!)

The other new website that we’re excited about is wisrecovers.org, a project of the Institute for Wisconsin’s Future. Read more

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Wisconsin Schools: Are We Making the Grade?

Tuesday, August 31, 2010 at 4:00 PM by

A new analysis by the Wisconsin Budget Project finds that Wisconsin is no longer much ahead of the curve on school spending and staffing. Once a national leader in educational innovation and performance, Wisconsin’s investment in K-12 education has slipped significantly relative to other states over the past decade, and it now ranks near the national average on many measures of support for public education.

According to the new analysis, per-pupil instructional spending in public and secondary schools grew by 7.6% (adjusted for inflation) in Wisconsin between 2000 and 2008 (the most recent year for which data is available), a rate less than half the national average of 17.9%. Wisconsin’s rank in instructional spending per pupil dropped from 11th to 18th during that span. While Wisconsin continues to spend more per pupil than the national average, per-pupil spending here has been completely flat since 2003, while the national average has increased by 8.3%. Read more

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LFB Clarifies Effect of ARRA Funds on the Medicaid Deficit, But Newer Estimates Coming Soon

Tuesday, August 31, 2010 at 12:32 AM by

The Legislative Fiscal Bureau (LFB) issued new figures last week relating to the effect of the extended federal fiscal relief for Medicaid on Wisconsin’s Medicaid (and BadgerCare Plus) deficit. The LFB memo clarifies a number of important fiscal issues, but it will be superseded in a couple of weeks by new DHS estimates of the deficit.

The memo notes that the recently enacted federal law extending and phasing out the Recovery Act’s enhanced Medicaid relief for states is expected to yield about $194 million for Wisconsin (plus $1.2 million for child welfare). Working from the last official DHS estimate of the 2009-11 deficit in the state share of funding for Medicaid – i.e., a shortfall of $273 million GPR (estimated in March) – the LFB calculates that the recent Congressional action will bring that deficit down to $79 million. In addition, the LFB expects $21 million of GPR savings in SeniorCare, which could be used to reduce the state’s Medicaid deficit to $58 million. Read more

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New Study on Itemized Deductions Released

Wednesday, August 25, 2010 at 4:12 PM by

The Institute on Taxation and Economic Policy (ITEP) has released a new study on itemized deductions for income taxes. These deductions have a negative effect on tax fairness, with most of the benefit accruing to high-income taxpayers. Most states follow in the footsteps of the federal government in their approaches towards itemized deductions, but the good news is that Wisconsin is in the minority of states that take a variety of approaches to limit the regressive nature of the deductions.

Itemized deductions represent a group of several separate personal income tax deductions available on federal tax forms and most states. Widely-used deductions include those for mortgage interest and charitable contributions. Taxpayers generally have a choice between using a standard deduction or itemizing their deductions, and using whichever is higher. This income is then shielded from income taxes.

Higher-income taxpayers disproportionately benefit from itemized deductions in part because their income is taxed at a higher rate. Read more

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What Tax Cut Proposals Could Mean for Wisconsinites

Monday, August 23, 2010 at 5:26 PM by

The Bush tax cuts are set to expire at the end of 2010, and President Obama and Congressional Republicans have offered competing proposals as to which aspects of the tax cuts should be continued. The two approaches would result similar effects for middle and upper middle-income taxpayers in Wisconsin, but they would have different impacts for low-income and especially for the very highest income groups.

President Obama has proposed making permanent the Bush income tax cuts for those making below $200,000 individually or $250,000 jointly and reducing the estate tax. President Obama is also advocating for making permanent the temporary expansions to the Earned Income Tax Credit (EITC) and Child Tax Credit that were included in the Recovery Act. These credits typically benefit lower income workers.

Congressional Republicans have proposed making permanent the Bush income tax cuts regardless of income, eliminating the estate tax, and not extending the EITC or Child Tax Credit expansion. Read more

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CBPP Offers another Critique of Rep. Ryan’s “Roadmap for America’s Future

Friday, August 20, 2010 at 11:09 PM by

Representative Paul Ryan (R-WI) has been getting a lot of press in recent months, after developing specific recommendations for addressing the federal budget deficit. (See, for example, the major article in the Aug. 2 New York Times). He calls his plan the Roadmap for America’s Future (version 2.0).  A recent CBPP blog post critiques the Ryan Roadmap. 

Much of the media attention has, at a minimum, applauded Rep. Ryan for being one of the few conservative lawmakers to go beyond the usual platitudes about cutting taxes and somehow simultaneously reducing the deficit, by making more specific proposals about what would have to be cut. I agree that he should be applauded for not shying away from controversy and for generating some serious discussion of important fiscal policy issues.

Of course, the downside of unveiling specific elements of a plan that would slash taxes for the rich, while attempting to cut the deficit, is that there are a whole lot of people who would come out on the short end of the budget tradeoffs, and who are likely to oppose the plan if they understand the particulars. Read more

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