madison, money & you
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Madison, Money & You. $. CESA 10 ▪ 04.04.2014. Overview. Long view ’14: Jobs and taxes Looking back: Old history and 2011-13 budget Recent developments: — 2013-15 budget — Tax cuts: Multiple rounds Speculating about ‘tomorrow’ — Tax reform and school finance - PowerPoint PPT PresentationTRANSCRIPT
CESA 10 ▪ 04.04.2014$Madison,
Money & You.CESA 10 ▪ 04.04.2014
CESA 10 ▪ 04.04.2014
Overview
Long view ’14: Jobs and taxes
Looking back: Old history and 2011-13 budget Recent developments:
— 2013-15 budget— Tax cuts: Multiple rounds
Speculating about ‘tomorrow’
— Tax reform and school finance
About WISTAX (SchoolFacts, text, consulting)
CESA 10 ▪ 04.04.2014
Monthly job growth: Wis. vs. US
The long view: Job trends in Wisconsin
-6%
-4%
-2%
0%
2%
4%
6%
1984 1988 1992 1996 2000 2004 2008 2012
US
WI US/WI
US
% Mo'ly Job Chg.
> ~= <=
CESA 10 ▪ 04.04.2014
4.4 3.1 4.7
8.89.08.67.3
9.4
12.214.013.9
15.314.8
17.816.4
17.516.1
12.9%13.1%
12.6%
11.4%11.9%
11.2%
11.8%
11.1% 11.1% 11.0%
10.2%
11.4%
10.3%
10.9%
8.0%
10.0%
12.0%
14.0%
93 94 95 96 97 98 99 00 02 04 05 06 07 08 09 10 11
0.0
14.0
28.0
42.0
WI
US
% Wis. > US
State-local taxes as pct. pers’l income – and % Wis. > US (FY 2011)
The long view: Taxes in Wisconsin
#10
CESA 10 ▪ 04.04.2014
US WI
Taxes 10.87 11.84 8.8 10Property 3.60 4.54 26.1 10Ind. Inc. 2.31 2.97 28.4 12Sales 2.45 2.05 -16.2 35Corp. Inc. 0.39 0.39 -0.3 18Gas 0.33 0.46 36.6 10Tobacco 0.14 0.30 108.1 6Alcohol 0.05 0.03 -49.7 37
Charges 3.48 3.38 -3.0 30Taxes+Chgs 14.358 15.214 6.0 14Fed. Rev. 5.25 5.10 -2.9 34
Pct. Personal Income
Revenue% +/-
USWis. Rank
Taxes . . . second look, tax reform?
(Census, FY11)
CESA 10 ▪ 04.04.2014
Old! history: Decade of dysfunction Boom-bust budgeting
1995-2010: Dig a hole, file a hole, dig . . .Tricks, transfers, gimmicks, borrowing
2011-13: Inherited deficit, big Medicaid hole;
Cut everything, add $1b+ to Medicaid Tax changes? Composting & increasing
CESA 10 ▪ 04.04.2014
July ’13 surplus ~$760 million Total 13-15 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: 2013-15 state budget
CESA 10 ▪ 04.04.2014
$946.4
3.2 15.1 4.0
$410.8
$850.8
-$308.1
-$3.3-$2.5-$1.3
-6.4
-0.1-0.1-0.1
-400
0
400
800
Tot. Health DPI Corr'ns UW Sh. Rev. Rem.
$ mill. >
% Chg. >
Gen. fund two-year spending increase ($m)
Budget detail: Squeeeeze continues
CESA 10 ▪ 04.04.2014
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
CESA 10 ▪ 04.04.2014
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
CESA 10 ▪ 04.04.2014
. . . is K-12 as a priority?
Shifting priorities, 1990 –
State fiscal problems, 2001 – 12
The new priorities, 2011 - 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
CESA 10 ▪ 04.04.2014
14.3%
1.0%
6.9%
0.2%
-8.3%
0.6%
-10%
-5%
0%
5%
10%
15%
20%
94-95 96-97 98-99 00-01 02-03 04-05 06-07 08-09 10-11 12-13
p 35.9%
Gen'l Aid
Categ. Aid
K-12 aid trends, gen’l and categorical
CESA 10 ▪ 04.04.2014
The real issue: Revenue limits
5.2%
5.4%
3.4%
2.3%
1.8%
0.1%
-6%
-3%
0%
3%
6%
94-95 96-97 98-99 00-01 02-03 04-05 06-07 08-09 10-11 12-13
-5.1%
Rev. Limits
CESA 10 ▪ 04.04.2014
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, 2013-15 +$75/year under caps + $75/year in
categorical Careful: Net +$100/student in ‘14 and $150 in
‘15.
K-12: Cuts and after
CESA 10 ▪ 04.04.2014
Policy directions in 2015-17? 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.
CESA 10 ▪ 04.04.2014
Thank you! Questions? Critique?
Wisconsin Taxpayers Alliance (WISTAX)Facts about government, taxes and spendingServing taxpayers, business, community
leaders,and the press for over 82 years
www.wistax.org
CESA 10 ▪ 04.04.2014
CESA 10 ▪ 04.04.2014
CESA 10 ▪ 04.04.2014
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.
Tax Item (000) % Ch. % All
CreditsManuf'rs Sales Tax 0.01 -50.0 0.0 0.0Internet Equipment 0.01 - 0.0 0.0Health Ins. Risk Shrg. 0.01 - 0.0 0.0Film Prod'n Co. Inv. 0.01 - 0.0 0.0Jobs Tax 0.02 - 0.0 0.1Ethanol/Biodiesel 0.03 0.0 0.0 0.1Water Consumpt'n 0.03 - 0.0 0.0Technology Zone 0.05 -28.6 0.0 0.4Meat. Proc. Facility 0.06 -14.3 0.0 0.3Dairy Coops 0.08 -83.0 0.0 0.0Film Prod'n Svcs. 0.10 11.1 0.0 0.1Food Proc'g Plant 0.12 20.0 0.0 0.4Dairy Mfg. Facility 0.13 -48.0 0.0 0.4Developm't Zone 0.15 0.0 0.0 1.9Manuf. Investment 0.18 -14.3 0.0 0.4Econ. Development 0.21 61.5 0.0 3.5Seed Investment 0.23 -11.5 0.0 1.4Historic Rehab. 0.37 -38.3 0.0 1.6Angel Investment 0.38 8.6 0.0 3.5Working Families 0.85 -9.6 0.0 0.2Armed Forces 4.95 -6.1 0.2 1.3Veterans Prop. Tax 5.89 16.6 0.2 17.3Dairy/Livestock Inv. 7.87 21.8 0.3 22.2Postsec. Education * - - *Community Rehab. * - - *Farmland Tax Relief * - - -Enterprise Zone Jobs * - - 1.7Farmer/Farm Assets * - - 0.0
Donations & Misc. 0.00Firefighters Mem'l 3.99 -8.1 0.1 0.030
Multiple Sclerosis 5.89 -8.7 0.2 0.080
Packers Football 6.11 -12.3 0.2 0.060
Prostate Cancer Res. 6.48 -11.1 0.2 0.060
Veterans Trust Fund 6.90 -5.0 0.2 0.090
Red Cross 7.91 - 0.3 0.100
Military Fam. Relief 8.04 -8.1 0.3 0.110
2d Harvest Food Bk 8.50 -17.3 0.3 0.120
Breast Cancer Res'ch 11.52 -13.4 0.4 0.160
Endang. Resources 15.63 -7.6 0.5 0.28
Alt. Minimum Tax 5.90 17.8 0.2 6.49
Returns Filed Amt. $mModicum of real reform?
CESA 10 ▪ 04.04.2014
2014AGI Filers $AGI $ Tax $ Cut
0-50 68.5% 25.0% 14.4% 14.6%
50-100 21.1% 30.8% 30.4% 30.9%
100+ 10.4% 44.2% 55.2% 54.5%
2011
14.4
%
30.4
%
55.2
%
14.6%
30.9%
54.5%
0%
25%
50%
75%
$0-50K $50K-$100K $100K+
% Tax Paid Now
% Tax Cut
The budget’s tax cut: Who got what?
CESA 10 ▪ 04.04.2014
Gov’s spending focused (two-year totals)
Programs w/ Largest Increases, One/Both YearsOver ’13 Base ($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
CESA 10 ▪ 04.04.2014
-0.7
4
-1.0
8
-1.1
7
-1.1
3
-1.2
2
-1.1
3
-0.9
2
-1.4
7
-1.2
7 -0.9
1
-0.8
3
-1.2
1
-1.4
8
-2.2
4 -1.9
3
-2.1
2
-2.1
5
-2.4
4
-2.5
0
-2.7
1
-2.9
4
-2.9
9
-2.2
1
-$4.0
-$3.0
-$2.0
-$1.0
$0.0
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
Gen
. Fu
nd D
efic
it in
$ B
illio
ns (
GA
AP
)Final question: GAAP deficit (TBD)
Political incapacity to save, and the value of saving in today’s economy & the GAAP world
-2.0
6
-2.3
6
-2.6
4G.A.A.P?
13 14 15
Gov.Proposed
?