Wisconsin Below Average in New Census Data on Per Capita State and Local Spending and Taxes

Monday, July 19, 2010 at 7:18 PM by

The following news is not a “man bites dog” story, but some people might see it that way because of the widespread misimpressions about taxes and spending in Wisconsin. 

New data from the U.S. Census Bureau released last week show that Wisconsin was below average in per capita state and local taxes and spending in fiscal year 2008.  The Wisconsin Budget Project’s analysis of the data reveals that the average Wisconsinite paid $40 less in state and local taxes than the average for the nation as a whole in fiscal year 2008. Our state ranked 17th in per capita taxes (with #1 being the highest), compared to 8th in 2000.

If one looks at the new data with a wider lens – which captures fees and all other state and local revenue, excluding only federal revenue – Wisconsin was further below the national average. Our state was $236 per person, or 3.7%, less than the fiscal year 2008 average on that measure, known as “own source” revenue.  

Taking an even broader view, by looking at state and local spending from nearly all revenue sources, the difference gets wider. Wisconsin was $345 per person, or 4.4%, below the national average in direct general state and local spending, which is the most widely used spending measure. (The difference grows to $570 per person, or 6.1%below average, if one uses the broadest measure of state and local spending, which also includes things like public utility spending and state-owned liquor stores.)

Wisconsin does not do as well in the national rankings when revenue and spending are measured relative to personal income, because the income of the average Wisconsinite is almost 6 percent below the national average. As a result, even though Wisconsin’s state and local taxes per person are below average, the share of income that is used for taxes in Wisconsin is 5 percent above the national average. Wisconsin ranks 13th in taxes as a percentage of income and 21st in total “own source” revenue relative to income.

Some of the other highlights of Budget Project’s analysis include the following:

  • Wisconsin has fallen to 22nd in state and local spending per capita (i.e., “direct general” spending), down from 12th highest in 2000.
  • Total state and local revenue in Wisconsin from all general revenue sources, including federal revenue, was $7,463 per person, which was 6.4 percent below the national average of $7,970 per person.
  • In state and local taxes relative to income, which has generally been the most watched measure, Wisconsin went from 4th in 2000 to 13th in 2008.
  • Our state continues to rely less on fees and other revenue sources than most other states, and now ranks 36th in “charges and miscellaneous revenue” per capita, 9.7 percent below the national average.
  • Wisconsin was 46th in per capita federal revenue, down from 35th in 2000.

Later this week I’ll take a closer look at some of the reasons why few people seem to know that per capita spending in Wisconsin is well below the national average.

UPDATED 7/23/10: Check out coverage of our analysis in The Capital Times and the Wisconsin State Journal. Also, Wisconsin Budget Project Director Jon Peacock discussed this issue with Stan Milam on WCLO.

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