1 / 21

Well, Toto? Oz- consin or Wis -consin?

So, if this ain’t Kansas, Toto. ?. Where the heck are we?. Assessing Wisconsin’s fiscal condition & direction. Well, Toto? Oz- consin or Wis -consin?. Overview : Where now, Wisconsin?. Overview: State finances at crossroads. Budgetary choices a Forward . . . or Back to Oz?

yered
Download Presentation

Well, Toto? Oz- consin or Wis -consin?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. So, if this ain’t Kansas, Toto . . . ? Where the heck are we? Assessing Wisconsin’s fiscal condition & direction Well, Toto? Oz- consin or Wis -consin?

  2. Overview: Where now, Wisconsin? Overview: State finances at crossroads Budgetary choicesa Forward . . . or Back to Oz? 1Backdrop: DC and state economy 2Recap: State finances ‘til now 3The new state budget 4Budget sticking points 5Hard questions with future consequences uWISTAX: 80+ years of research & education OZ? WI? IL?!

  3. 1 Background: DC — No help? Future hurt? “. . . a growing level of federal debt would also increase the probability of a sudden fiscal crisis, during which investors would lose confidence in the government’s ability to manage its budget . . . the abrupt rise in interest rates would reflect investors fears that the government would renege on the terms of its existing debt or . . . boost inflation.” ─ CBO 7.10

  4. Background: State economy (= taxes) State GDP per capita & chg.

  5. And jobs? The whole story WI Job Growth Tracks/Diverges From US Trend: Wis & US WI PCPI as % US Wis > US ? 87 mo: 100% 124 mo: 35% 102 mo: 27% Wis > US:

  6. Digression: Job rhetoric ‘Bipartisan’ rhetoric: Jobs! Silly, partisan job number games The (R) rhetoric: Credit and lure The (D) rhetoric: Programs create jobs Another (persuasive) view Startups and young companies dominate net job creation in the United States – and have done so for the last 30 years . . . Ewing Marion Kauffman Foundation (2010)

  7. Underlying trends —changing population Cum. Population Growth: 2002 - 11 9.3 5.9 uYoung people: workforce, new families, cons. goods

  8. Lack of new firms – another key New as Pct. of All New firms in ‘96: WI US Alive in ’06 44% 34% Alive in ’10 36% 27% * Less new seasonal firms = 49th

  9. 2 State finance recap: The ‘Oz’ decades 1990s-2010: Boom, splurge, crash, deny Delay, delay: Dig a hole, file a hole, dig . . . Tricks, transfers, gimmicks, borrowing 2011-13: Inherited deficit, big Medicaid hole; Cut everything, add $1b+ to Medicaid Now: No ‘deficit carryover’, surpluses 2013-15? Budget crossroads, return to Oz? ?

  10. 3 New budget: Revenue growth? (GPR) • Notes: • Tax cut carried over • New LFB rev. est’s

  11. New budget: Spending growth (GPR)

  12. New spending in few places  All increases Programs w/ Largest Increases, One/Both Years Over ’13 Base ($m) for Tot. Biennium (14+15 vs. 13) Net incr.  Big 2 = $717.6m ! Total = $731.7 m

  13. Budget bottom line: Surplus? Deficit?

  14. 4 Budget sticking points: Debt State Debt CAFR (through 6/12)$ Billions $16+ bill? 2013-15 Gov. Proposals $1.03b in budget ($0.99b transpt’n) $1.15b in capital bud. = $2.15b total ’13-’15 proposed

  15. Budget sticking points: Ozian imbalance? Return of the ‘structural deficit’? None +! $326e ’15e

  16. Sticking pointZ, Oz II: GAAP deficits? Pending/Proposed 13 14 15 -2.06 -2.36 -2.64 G.A.A.P? $16 bill. ?

  17. Budget sticking points: Tax cut? About $343m, two years How? Lowest marg’l rates Critique: Too small? Too large—reserves? Prop. tax? Top 7.75 rate? Missed opportunity? ▪ Cash as ‘political grease’ ▪ Tax law as regulation Broader base/cut rates Assembly CPA changes?

  18. Budget sticking points: School finance Largest part of state budget, 35% - 45% of GPR Overall, largest source of revenue for K-12 Evolution: Big bucks, little bucks, fewer bucks Political geography ▪49 sch. dists. rev. now < ’03 ▪2/3rds in R sen dists. About $343m, two years How? Lowest marg’l rates Critique: Not Doyle’s 7.75%? Too small? Prop. tax? Reserves? Missed opportunity? ▪ Cash as ‘political grease’ ▪ Tax law as regulation Broader base/cut rates CPA changes? (Kooyenga, Marklein, etc.)

  19. 5 Choices: Wis- or Oz- consin? Decades of the fiscal revolving door Career politics = short-term thinking = GAAP deficits, low bond ratings = Painful cuts and tax increases, little or no strategic planning Coming questions and choices: ▪ Delayed vs. instant gratification (up spending, cut taxes?) ▪ Long-term fund integrity vs. addiction to transfers ▪ Pay-as-you-go vs. return to increased borrowing ▪ Fundamental reform vs. tinkering: Income tax, transportat’n, higher ed. finance

  20. Questions? Jokes? Critique? Wisconsin Taxpayers Alliance 80 years of nonpartisan policy research and citizen education www.wistax.org Z zz zzz z z z z Are we gonna get a brain?

More Related