Governor Proposes Beefing Up Resources for Tax Efforts
Every $1 Invested Generates $6 in Additional Revenue
Governor Walker has made it clear that he is a fan of smaller state government. That’s why it’s notable that he has proposed adding 32 full time equivalent (FTE) positions at the Wisconsin Department of Revenue. The positions would focus on improving delinquent tax collections, reducing fraud, and following up on federal audits of state tax filers.
The legislature’s budget committee is scheduled to make a decision on Wednesday on whether to add the positions.
Here is the breakdown of how the new positions would be allocated by purpose:
- Delinquent tax enforcement, 15 FTE. Staff filling these positions would encourage or force individuals and businesses to pay delinquent taxes.
- Tax fraud enforcement, 13 FTE. Staff filling these positions would review income tax returns and tax claim forms for errors and fraud. Special scrutiny would be paid to returns claiming the Earned Income Tax Credit or the Homestead Credit, both of which benefit low-income Wisconsinites.
- Federal audit report enforcement, 33 FTE. The IRS notifies the Wisconsin Department of Revenue of audit-related adjustments the IRS has made to federal tax returns. The DOR then follows up with the tax filer in collection any additional taxes owed to the state. These positions, which would expire in 2017, would help reduce a backlog of federal audit reports that has swelled to more than 100,000.
The budget also proposes deleting 29 FTE as part of a permanent reduction, for a net gain to the Wisconsin Department of Revenue of 32 FTE. Because 35 positions would expire after four years, the total numbr of DOR positions would fall slightly below the current authorized level in 2017.
The new positions would more than pay for themselves in additional tax revenue generated. The new staff would cost $12.6 million over two years, and generate $81.9 million in additional revenue – a return of more than six dollars for every dollar invested.
Some legislators have expressed hesitation at the Governor’s recommendation, noting that his proposal would increase the overall number of state employees. Those legislators should keep in mind that Wisconsin is among the states with the fewest public employees per capita. Wisconsin ranks 40th in the number of government workers per population, meaning Wisconsin’s state and local governments are leaner than all but 10 other states. By adding these new positions, Wisconsin can maintain a lean state government, make sure everyone pays taxes owed, and boost tax revenue.