Use tax windfall to address our state’s needs
Wisconsin’s overall economy is booming.
Statewide unemployment has been at historic lows for months. Real wages are climbing locally and around the state as employers compete for quality workers. Sales of durable goods and real estate remain strong with demand routinely exceeding supply. While inflation and supply chain issues must be addressed, by any historical measure the state’s economy is healthy and strong.
As a strong manufacturing state, it is no surprise that Wisconsin is doing well economically. People in Wisconsin never stopped working and have no intention of stopping anytime soon. While there have been specific areas, particularly in the service industries, that felt pinched earlier in the ongoing pandemic, the recovery since then has been steady and climbing.
Add to this good news is word from the non-partisan Legislative Fiscal Bureau that at the rate of collections, Wisconsin’s budget surplus is projected to end the biennium with a $3.8 billion net balance, up $2.9 billion from estimates made in June 2021. The recently released figures take into account what the state ended the 2021 fiscal year with, increased sales and income tax collections since then and a decrease in appropriations with spending cuts.
Not surprisingly, considering their track record of inaction over the past two years, legislative leadership is calling for taking no action on the projected surplus until June 2023 for fear of giving Tony Evers something to campaign for reelection on.
For his part, Gov. Tony Evers has released a laundry list of things he would like to spend the money on including a $150 per person election-year rebate check.
While there is plenty of room for politicians on both sides of the aisle to take credit for the projected surplus, the plans on what to do with the money are equally ill-advised.
Rather than election-year stunts or political gamesmanship, Wisconsin should apply the surplus funds to address long-term needs including paying down debt, establishing an endowment for the University of Wisconsin and Wisconsin Technical College System (WTCS) or providing supplemental aid to local communities for the purpose of funding for basic infrastructure and emergency services needs. Using surplus funds to pay down debt is always a good investment because it saves taxpayers from interest payments and frees up budget dollars for other needs in the future.
Likewise, creating an endowment for the UWSystem and WTCS will, in the long term, reduce or eliminate the amount of state taxes that are allocated to these budgets each biennium. Again this would free up funds on an ongoing basis for other programs or tax cuts.
Wisconsin weather is hard on roads, bridges and other basic infrastructure. Counties, towns, villages and cities have a hard time keeping up with maintenance needs especially given state imposed revenue limits which prevent local government from making needed investments.
Allocating funding to local governments with the express purpose of it being used for infrastructure or emergency services needs would allow these governments to play catch up on delayed projects or replace critically-needed equipment without incurring additional longterm debt.
While there are always naysayers, Wisconsin is in a good place economically and financially. Rather than squandering the surplus on election-year stunts or hoarding it away to benefit their own political machinations, Wisconsin leaders must take a bipartisan and measured approach of putting the money to work for the long-term good of Wisconsin’s residents.
Editorial by Brian Wilson, The Star News
