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CESA 10 ▪ 04.04.2014 $ Madison, Money & You. CESA 10 ▪ 04.04.2014.

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Presentation on theme: "CESA 10 ▪ 04.04.2014 $ Madison, Money & You. CESA 10 ▪ 04.04.2014."— Presentation transcript:

1 CESA 10 ▪ $ Madison, Money & You. CESA 10 ▪

2 Overview Long view ’14: Jobs and taxes Looking back: Old history and budget Recent developments: — budget — Tax cuts: Multiple rounds Speculating about ‘tomorrow’ — Tax reform and school finance  About WISTAX (SchoolFacts, text, consulting)

3 CESA 10 ▪ Monthly job growth: Wis. vs. US The long view: Job trends in Wisconsin >~=<=

4 CESA 10 ▪ State-local taxes as pct. pers’l income – and % Wis. > US (FY 2011) The long view: Taxes in Wisconsin #10

5 CESA 10 ▪ Taxes... second look, tax reform? (Census, FY11)

6 CESA 10 ▪ Old! history: Decade of dysfunction Boom-bust budgeting : Dig a hole, file a hole, dig... Tricks, transfers, gimmicks, borrowing : Inherited deficit, big Medicaid hole; Cut everything, add $1b+ to Medicaid Tax changes? Composting & increasing

7 CESA 10 ▪ July ’13 surplus ~$760 million Total spending: $68.3b, $33+b/yr ▪ vs. $64.3b budgeted in 11-13, +6.2% Gen’l fund net spdg: $30.24b (13-15) ▪ $14.84b (13-14) vs. est. $14.30b (12-13), +~3.8% $2.05b bonding vs. $1.73b (11-13) Income tax cut Bottom line: Mid-2015 surplus/deficit? Expenditures > revenues Latest: state budget

8 CESA 10 ▪ Gen. fund two-year spending increase ($m) Budget detail: Squeeeeze continues

9 CESA 10 ▪ Economy & tax projections (Let’s party!) May 2011: Corporate tax cut, approach? March/May 2013: Income tax cuts ▪ Proposals: Gov. vs. legislature ▪ Size? Approach? Who gets? Downside? Romeo and... tax cut in four acts

10 CESA 10 ▪ The real meaning of revenue estimates May 2011: Corporate tax cut, approach? March/May 2013: Income tax cuts ▪ Proposals: Gov. vs. legislature ▪ Size? Approach? Who gets? Downside? October 2013: School tax “buydown” 2014: ▪ Revenue reestimates (good/bad) ▪ Gov’s proposal: Elements/details Inc. tax, withholding, prop. taxes ▪ Long-term finances (Sen. anxiety) Issue? ▪ Political grease? Opp’ty missed? Tax cuts in four acts, pt. 2

11 CESA 10 ▪ is K-12 as a priority? Shifting priorities, 1990 – State fiscal problems, 2001 – 12 The new priorities,  State tax cuts vs. “aided” local tax cuts  Local property tax ‘relief’ by state control  Transportation finance (gum and rubber bands)  M-E-D-I-C-A-I-D

12 CESA 10 ▪ K-12 aid trends, gen’l and categorical

13 CESA 10 ▪ The real issue: Revenue limits

14 CESA 10 ▪ Aid programs specifically ( after -8.1% & +1.4%) — +1.5% ($75m), +2.8% ($140m); 2-yr = +$290m — Total. growth: +$276m (K12); +$87m (choice/charter, $14m from aid appropriation) Rev. limits –tighten ‘09/5.5% cut+freeze ’11-’13 New revenue limits, $75/year under caps + $75/year in categorical Careful: Net +$100/student in ‘14 and $150 in ‘15. K-12: Cuts and after

15 CESA 10 ▪ Policy directions in ? The 2016 lb. elephant in the room — goal? Real tax reform? Have we had it? What is it? Principle of “grease” Income tax elimination? $7-8 billion Sales tax implications, 13+%? or... Major property tax reform? Tech. college “buy-down”– first step, second step? Alternative: Tot. “rebalance” (Recall ranks) Did you forget school finance? Ah, no.

16 CESA 10 ▪ Thank you! Questions? Critique? Wisconsin Taxpayers Alliance (WISTAX) Facts about government, taxes and spending Serving taxpayers, business, community leaders, and the press for over 82 years

17 CESA 10 ▪

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19 Gov. $343m - marginal rates Missed opportunity? ▪ Cash as “political grease” ▪ Tax law as regulation Broader base/cut rates Incr. May rev. est’s: Opp’ty? JCF response/final ($650m) ▪ All rates, brackets reduced ▪ Streamline: credits, checkoffs, Fed-state differences. Modicum of real reform?

20 CESA 10 ▪ The budget’s tax cut: Who got what?

21 CESA 10 ▪ Gov’s spending focused (two-year totals) Programs w/ Largest Increases, One/Both Years Over ’ 13 Base ($m) for Tot. Biennium (14+15 vs. 13) Total = $731.7 m Big 2 = $717.6m ! Net incr.   All increases JCF? DHS +$179.3m DPI +$127.4m

22 CESA 10 ▪ Final question: GAAP deficit (TBD)  Political incapacity to save, and the value of saving in today’s economy & the GAAP world G.A.A.P? Gov. Proposed ?


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