Reduced Tax Estimates Show the Importance of Budget Reserves

Thursday, January 21, 2016 at 1:51 PM by

As you’ve probably heard or read by now, Wisconsin got some bad news today regarding state tax collections – which are now expected to be $158 million less than previously expected during the 2015-17 biennium. But the good news is that some other re-estimates partially offset the revenue loss, bringing the net change to the 2015-17 budget to -$94 million (compared to the previous estimate), and the state’s reserves can absorb that hit. 

The bottom line is that the state is now expected to finish this biennium with a “net balance” in the general fund of $70.2 million, instead of the $164.5 million net balance that had been estimated a few months ago. The key lesson to be drawn from the numbers released today by the Legislative Fiscal Bureau (LFB) is that tax collections and other revenue can be volatile and are difficult to predict, so it’s important to build a sizeable “ending balance” or budget cushion into each budget.  Read more

Categories: 2015-17 biennial budget, Blog, taxes | Comments Off on Reduced Tax Estimates Show the Importance of Budget Reserves

Fixing the “Pothole Repair Act”

Monday, January 18, 2016 at 9:07 PM by

Transportation Tax Increase Shouldn’t Be Biased against Low-income Wisconsinites  

Proposed legislation to fix local road repairs is a bad deal for poor Wisconsinites who don’t have cars. The proposal would authorize a sales tax increase that would fall more heavily on poorer Wisconsinites because the sales tax takes a higher percentage of their income. What makes that particularly inequitable is that the bill precludes using any of the new revenue for transit (e.g. bus and van service).    Read more

Categories: Blog, sales tax, taxes, transportation | Comments Off on Fixing the “Pothole Repair Act”

Fast-tracked Tax Cut Bill Hits a Speed Bump

Thursday, January 7, 2016 at 6:22 PM by

DOR Says Proposed Business Tax Cuts Could Cost $384 Million per Year

Legislators learned today that new corporate tax cut legislation “could reduce revenue by approximately $335 million to $384 million annually.”  That news was contained in the Department of Revenue (DOR) fiscal estimate that was distributed this morning to members of the Assembly Ways and Means Committee half an hour before a public hearing on the bill. 

The Assembly version of the bill is AB 623 and was introduced last week on December 29th.  Early this week the chairperson of the Ways and Means Committee amended the agenda for today’s public hearing to add the new bill.  The quick scheduling suggested that the bill might be on a fast track, and perhaps that will still be the case; however, the DOR fiscal estimate is likely to complicate any plans to rush the bill to the floor of the Assembly or Senate. Read more

Paying for Job Reductions: The Unreported Story of a Ballooning Tax Credit

Tuesday, December 8, 2015 at 8:44 PM by
An uncapped Wisconsin corporate tax credit is expected to balloon to $279 million in the next fiscal year, more than twice the original cost projection.
Categories: Blog, corporate tax, economic development, Home Tab 2, jobs, JOBS & THE ECONOMY, tax expenditures, taxes | Comments Off on Paying for Job Reductions: The Unreported Story of a Ballooning Tax Credit

Wisconsin Governments Near Average in Revenue and Spending

Thursday, October 29, 2015 at 11:27 AM by

December 16, 2015: This blog post is revised to compensate for an error in figures from the U.S. Census Bureau that overstated the amount of tax Wisconsin residents pay.

Wisconsin is near average in many measures of government revenue and spending, according to new figures for 2013 that were released by the U.S. Census Bureau this week. That’s nothing new, as Wisconsin has been near the middle of the pack for about a decade now.

A new analysis from the Wisconsin Budget Project found:

  • Wisconsin state and local governments ranked 22nd among the states in the amount of taxes, fees, and other charges that they collect from state residents on a per-person basis, and 21st when that amount is measured as a share of personal income.
  • Wisconsin ranks 25th in total government spending per person and also 25th when the amount is measured as a share of income.
Read more
Categories: Blog, STATE TAXES, taxes | Comments Off on Wisconsin Governments Near Average in Revenue and Spending

Continued Focus on Tax Cuts Does Little to Improve Job Growth

Tuesday, August 18, 2015 at 2:26 PM by

Wisconsin lawmakers have passed tax cuts totaling $4.8 billion over six years, according to a new legislative memo released this week. These tax cuts have done little to boost job growth and have forced damaging cuts to Wisconsin’s public schools, universities, and health care system.

Lawmakers have passed dozens of tax cuts since January 2011, including millions of dollars in tax cuts that primarily benefit people with high incomes. And lawmakers aren’t slowing down – the total value of tax cuts has increased each year since fiscal year 2012, and is slated to go even higher, to nearly $1.7 billion per year in the two-year budget period that starts in July 2017.

Among the tax cuts passed since January 2011, according to the memo:

  • A 2013 income tax rate reduction that gave an average tax cut of $1,440 to taxpayers earning over $300,000 but an average of just $86 for taxpayers who earn under $100,000.
Read more

Cutting Taxes by Increasing Spending & Phasing in Tax Cuts

Thursday, August 13, 2015 at 11:38 AM by

If you look at a new memo from the Legislative Fiscal Bureau (LFB) that itemizes the tax and fee changes in the biennial budget bill, you wouldn’t know that the net effect of the bill is to cut taxes. The fact that the budget bill does cut taxes isn’t obvious in the latest LFB document for a couple of reasons: 

  • First, the LFB memo summarizes the state-level tax changes and doesn’t examine the reductions in local property taxes that result from increases in state spending for property tax relief and restrictions on local spending. 
  • Second, the bill uses short-term tax increases to provide a temporary offset to larger long-term tax cuts (and the latter are beyond the two-year time horizon of the LFB analysis). 
Read more
Categories: Blog, income taxes, property tax, STATE TAXES, taxes | Comments Off on Cutting Taxes by Increasing Spending & Phasing in Tax Cuts

Under Proposal to Eliminate the Alternative Minimum Tax, Only Highest Earners Would Receive a Significant Tax Cut

Friday, June 12, 2015 at 9:20 AM by

Lawmakers have proposed eliminating Wisconsin’s Alternative Minimum Tax, a change that would give a tax cut to some people with high incomes and exclude nearly all taxpayers with incomes under $100,000. The legislature’s budget committee is likely to vote on the proposal next week. Read more

Bang for the Buck – in Protecting and Generating State Revenue

Wednesday, May 27, 2015 at 3:10 PM by

One of the positive aspects of the Governor’s budget proposals is an investment in Department of Revenue positions to increase tax compliance and improve collection of state and local debts.  But despite the fact that those additional positions will yield a tremendous return on the investment, some conservative legislators have balked at providing more staff for DOR. The issue may be debated in the Joint Finance Committee (JFC) this Thursday or Friday, May 29 or 30.  (Update:  JFC consideration of the DOR issues have been postponed until June 2.) Read more

Categories: 2015-17 biennial budget, Blog, Joint Finance Committee, taxes | Comments Off on Bang for the Buck – in Protecting and Generating State Revenue

Rein in Tax Breaks that Aren’t Tied to Job Creation

Tuesday, May 26, 2015 at 7:29 PM by

There’s been a lot of talk in Wisconsin over the last couple of weeks about the need to ensure that tax breaks and loans awarded by Wisconsin’s economic development agency are limited to businesses that are creating jobs and fulfill their job growth commitments.  Yet almost no attention has been paid to the fact that the state’s largest tax credit for corporations is ballooning in cost and is distributed to businesses operating in Wisconsin regardless of whether they are expanding or slashing their workforce in our state. Read more