Budget Bill Boosts Property Taxes for Thousands of Low-income Households

Thursday, September 14, 2017 at 2:36 PM by
Despite the claims of state lawmakers that the biennial budget bill cuts property taxes, the actions of those policymakers will increase property taxes for thousands of low-income Wisconsin households. The budget bill does that by significantly reducing funding for the Homestead Tax Credit, which was designed to provide targeted property tax relief to low-income homeowners and renters. A new Wisconsin Budget Project summary of tax changes in the budget bill describes some of the major items, which include more than $400 million of tax cuts. But the bill cuts funding and eligibility for the Homestead Credit, and the Joint Finance Committee (JFC) rejected the Governor’s proposal to increase the state’s Earned Income Tax Credit.

Wisconsin Voters Understand Importance of Making Public Investments in Education, Health Care

Thursday, June 29, 2017 at 11:15 AM by

Wisconsin voters want the state to make additional investments in K-12 education and health coverage and are willing to pay more in taxes to pay for it, according to a new poll conducted by Marquette University.

The poll showed that K-12 education was voters’ highest priority for increased state spending, with 62% of respondents picking it as the first or second highest priority. Health coverage came next, with 52% of respondents indicating it was among their highest priorities. Road construction and maintenance came in third, with 42% choosing it as a high priority. Fewer voters identified state aid to local governments, the UW System, and prisons and the criminal justice system as their highest priorities.

Most voters said they’d be willing to pay more in taxes to increase state spending on their highest priority. More than 6 out of ten respondents (61%) indicated a willingness to pay more for programs and services that were the most important to them. Read more

Categories: 2017-19 biennial budget, Blog, STATE BUDGET | Comments Off on Wisconsin Voters Understand Importance of Making Public Investments in Education, Health Care

Out of Sync: Wisconsin Lawmakers Still in Search of Agreement on Major Components of State Budget

Friday, June 23, 2017 at 10:09 AM by

After several weeks of deliberating, Wisconsin lawmakers have settled large chunks of the state budget but are still working out disagreements in the areas of K-12 education, transportation finance, and taxes.

In the meantime, Assembly Republicans have released their own version of a K-12 education budget. A new summary by the Wisconsin Budget Project compares the Assembly version to Governor Walker’s proposed education budget, highlighting the areas in which the two versions are different. The Assembly version allocates about $90 million less in state funding overall to K-12 schools and would result in slightly higher taxes for property owners compared to the Governor’s budget. Education advocates generally favor the Governor’s budget over the Assembly’s version.

In an effort to come to agreement, Assembly and Senate leaders have been meeting behind closed doors to discuss the education budget, and news reports indicate they are close to reaching an agreement.

On Thursday, Democrats released their own plan, which would allocate significantly more funding to schools. Read more

Trump Budget Demonstrates the Perils of Changing Medicaid

Wednesday, May 24, 2017 at 5:39 PM by

Medicaid Cut Projected to Be 45% in 2026, and More in Future Years

In order to pay for huge tax cuts for corporations and wealthy Americans, the President is proposing massive Medicaid cuts – far beyond the amounts contained in the House plan to “repeal and replace” the Affordable Care Act.

Whereas the House-passed bill is now projected to cut Medicaid by $834 billion over the next 10 years, the Trump budget unveiled this week would cut Medicaid by about $1.3 trillion, according to an analysis by the Center on Budget and Policy Priorities (CBPP).  The following bar graph illustrates how those cuts would get deeper over time. Read more

New Income Tax Proposal Overwhelmingly Favors Highest Earners

Thursday, May 11, 2017 at 8:02 AM by

Republicans in the Wisconsin Assembly have proposed a package of tax cuts that would give extremely large tax breaks to earners with the highest incomes, while shutting out Wisconsin residents with low incomes.

The tax package has multiple components, the largest of which is the gradual flattening of the state’s income tax rates. The proposal would reduce income tax rates over ten years to a flat rate of 3.95%. Currently, the bottom income tax rate is 4.0% and the top marginal rate is 7.65%, so the proposal would result in a 0.05 percentage point reduction in the tax rate for income in the bottom bracket, and a 3.7 percentage point reduction for income in the top bracket.

Wisconsin’s income tax system as it currently stands is progressive, meaning that taxpayers with higher incomes pay a higher share of their income in taxes. The progressive nature of the state’s income tax partially – but not completely – offsets the regressive nature of the state’s sales tax and property tax. Read more

Categories: 2017-19 biennial budget, Blog, income taxes, STATE BUDGET, STATE TAXES | Comments Off on New Income Tax Proposal Overwhelmingly Favors Highest Earners

Wisconsin Lawmakers Indicate a Willingness to Take Money from Education and Health Care to Fund Highways

Thursday, April 27, 2017 at 11:18 AM by

Governor Walker and other state lawmakers have said they are open to redirecting money from a pot intended to support education, health care, and safe communities, and using the money for roads instead. That approach could lead to future budget cuts that damage academic opportunities for Wisconsin schoolchildren, lengthen the amount of time to graduation for University of Wisconsin students, and make it harder for communities to afford important services like trash collection and street cleaning.

State road projects are funded with resources from Wisconsin’s Transportation Fund. About a decade ago, state lawmakers froze the gas tax on each gallon of gas sold – the main source of revenue for the Transportation Fund – and inflation has eaten away at the tax’s value since then, shrinking the amount of resources available to build and maintain Wisconsin’s transportation network. The result is that there is not currently nearly enough money coming into the Transportation Fund to pay for all the highway projects lawmakers want. Read more

Public Money for Private Schools Gets a Boost in Governor Walker’s Budget

Tuesday, April 25, 2017 at 9:25 AM by

Governor Walker has proposed significantly increasing resources for Wisconsin’s public schools, a move that has gotten a great deal of attention – and has attracted some controversy for the size of the increase. But his budget also includes a major increase in the amount of public money that goes to pay for private school tuition, a fact that has been mostly overlooked.

Through the state’s private school choice program, Wisconsin uses publicly-funded vouchers to pay tuition at private schools across the state. To participate in the program, students must have family incomes of up to 300% of the poverty level if they live in Milwaukee or Racine (about $73,000 for a family of four) or of up to 185% of the poverty level if they live in the rest of the state ($45,000 for a family of four). About 36,000 students are expected to receive publicly-funded vouchers to pay for private school tuition next year. Read more

Categories: 2017-19 biennial budget, Blog, EDUCATION, K-12 | Comments Off on Public Money for Private Schools Gets a Boost in Governor Walker’s Budget

High Cost, Little Benefit to Tax Gimmick Under Consideration

Thursday, April 20, 2017 at 7:39 AM by

Governor Walker has proposed a back-to-school sales tax holiday, a gimmick that would reduce the resources available to support Wisconsin’s schools, university system, and communities, without providing any real economic benefit.

Under the proposal, purchases of school supplies, computers, and clothing would be exempt from the sales tax for one weekend in August. This move would cost the state an estimated $11 million a year in lost tax revenue, and local governments an additional $750,000 a year in lost revenue. This reduction in revenue would make it harder for Wisconsin to make the kinds of investments in education, health, and workforce systems that can spur economic growth.

A sales tax holiday would do little to boost consumer spending or give a tax break to Wisconsin families with low incomes. There are a whole host of downsides to a sales tax holiday, including:

  • Instead of encouraging consumers to spend more money, sales tax holidays simply shift the timing of the spending;
  • A sales tax holiday on back-to-school items involves lawmakers picking winners and losers among types of goods that should be exempt from the sales tax;
  • Sales tax holidays are not an effective tool for giving a tax cut to individuals with low incomes, since a large amount of savings is also given to people in higher income groups as well.
Read more
Categories: 2017-19 biennial budget, Blog, sales tax, STATE BUDGET | Comments Off on High Cost, Little Benefit to Tax Gimmick Under Consideration

Governor Proposes Expanding Tax Credit that Encourages Work and Improves Children’s Opportunities

Tuesday, April 18, 2017 at 6:54 AM by

Governor Walker has proposed increasing the state’s Earned Income Tax Credit for some families, a move that would improve child well-being and expand economic opportunity for families with low and moderate incomes. He included the measure in his proposal for the budget period that runs from July 2017 to June 2019.

Expanding Wisconsin’s EITC would give a much-deserved break to working parents with low and moderate incomes. The EITC lets working families keep more of what they earn to help meet basic needs and pay for things that allow them to keep working, such as child care and transportation. This tax credit offers working parents a hand up by encouraging and supporting work. It’s a modest investment that can make a big difference in the lives of families.

The EITC also boosts local communities and economies across the state. It puts more money in the pockets of low-wage workers, who then spend it at local businesses to pay for things like groceries and child care. Read more

Categories: 2017-19 biennial budget, Blog, EITC | Comments Off on Governor Proposes Expanding Tax Credit that Encourages Work and Improves Children’s Opportunities

The Case for Expanding BadgerCare Grows Stronger

Thursday, April 6, 2017 at 5:57 PM by

$190 Million Annual Savings + Threats to Federal Marketplace = Stronger Case for Expansion

There are many reasons why it makes sense for Wisconsin to modestly increase the eligibility ceiling for BadgerCare. A new memo by the Legislative Fiscal Bureau (LFB) sheds light on and strengthens one of those reasons – the large savings for Wisconsin from increasing the BadgerCare eligibility standard for adults.

Ironically, the ongoing efforts to repeal or undermine the Affordable Care Act (ACA) may also bolster the case for expanding BadgerCare, since the individual insurance Marketplace created by the ACA was Governor Walker’s rationale for sharply reducing BadgerCare eligibility. But let’s come back to that point after taking a closer look at the fiscal effect of expansion.

Under the Affordable Care Act, states that expand eligibility of adults to 138% of the federal poverty level are eligible for substantially higher federal cost sharing. Taking that step would qualify Wisconsin for reimbursement of at least 90% federal funding for the costs of covering childless adults, compared to the 58% reimbursement rate in effect now. Read more

Categories: 2017-19 biennial budget, BadgerCare Plus, Blog, health care reform, Medicaid | Comments Off on The Case for Expanding BadgerCare Grows Stronger