Middle of the Pack: Wisconsin Government Revenue is Not Out of Line


October 29, 2015

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December 16, 2015: This brief has been revised to correct an error in figures provided by the U.S. Census Bureau. The Wisconsin Taxpayers Alliance has determined that the Census Bureau has overstated the amount of property taxes Wisconsin residents pay. Officials from the Wisconsin Department of Revenue have agreed that there is an error in the figures. To compensate for the error, this analysis uses the amount of the state’s net property tax levy, provided by the Department of Revenue, in place of the property tax estimate provided by the Census Bureau.  

Despite claims that Wisconsin is a high-spending state, it is actually close to average in many measures of revenue and spending among the states, according to new figures from the Census Bureau.

Wisconsin ranked 22nd out of the 50 states in the amount of state and local taxes, fees, and other revenue collected per person in fiscal year 2013. Measured as a share of personal income, Wisconsin ranks 21st among the states in taxes, fees, and miscellaneous revenue.

Some policymakers focus on Wisconsin’s ranking on taxes alone when evaluating its revenue compared to other states. But focusing just on taxes means that fees and other charges, which come from residents’ pockets much like taxes do, are not taken into account.  Combining taxes with fees and other revenue gives a broader and more complete measure of the money that governments in Wisconsin collect from their residents.
 
The average amount state residents paid in taxes and fees is slightly below the national average. In 2013, Wisconsin residents paid an average of $6,535 in taxes, fees, and other charges to state and local governments, $118 less than the national average. State residents paid 15.4% of personal income in taxes and other revenue, slightly above the national average of 15.1%.

Wisconsin-ranks-near-middle

In nearly every measure of revenue and spending, Wisconsin’s rank has dropped significantly over the last decade:

  • In 2000, Wisconsin ranked 11th among the states in taxes, fees, and other revenue per person, before dropping 11 places by 2013. Wisconsin ranked 13th in total spending per person in 2000, before falling to 25th in 2013.

Wisconsin’s rankings in revenue and spending as a share of income have fallen as well. Measured relative to income, the state ranked 21st in taxes, fees, and miscellaneous revenue in 2013, down from 13th in 2000, and 25th in total spending, down from 19th.

Because per capita income in Wisconsin is well below the national average, we typically rank higher when revenue and spending are measured on that basis. 

 revenue and spending per person

revenue and spending as share of income

 Wisconsin policymakers who advocate for tax cuts should know that Wisconsin governments are already close to the national average in the amount of taxes and fees they collect from residents. Additional tax cuts could jeopardize Wisconsin’s public investments in high-quality education and health care, and make it more difficult to invest in public safety and transportation in our communities. That would hurt our economy in the long run, since those are the very things our businesses and families need to thrive.

Tamarine Cornelius and Jon Peacock