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Legislative Update

WI Policy Forum: State’s share of public spending rising

by | Jul 27, 2020 | Legislative Update Blog, State Budget | 0 comments

The following is from a new report from the Wisconsin Policy Forum:

“Because of higher state spending in areas like health care for low-income residents and slower growth in local government and school district revenues, the latest Census Bureau data show state government expenditures are now almost equal to the combined amount spent by schools, municipalities, counties, technical colleges, and other local governments in Wisconsin. The effects of the pandemic are unclear but the trend should be considered by policymakers as they contemplate COVID-19 responses and the next state budget.

“In other words, the balance of spending in Wisconsin has shifted to something much closer to an even split between local government services (such as K-12 schools, police and fire, local roads, and housing) and state services (such as health care for low-income residents, prisons, state highways, and the University of Wisconsin System).

“With both property taxes and state aid constrained, local governments increased their spending only 21% from 2007 to 2017, which modestly exceeded the rate of inflation but was less than half the 49% rise in state spending.

“Local education (primarily K-12 schools and not including state efforts) and fire spending are two areas which have seen spending lag other states over recent years. Compared to 14th in the nation in 1997, local fire spending per capita in Wisconsin dropped to 30th in 2017. Local education spending, which was 5th per capita in 1997 and 10th in 2007, dropped to 18th in 2017.

“It is worth noting that Wisconsin Act 10 – adopted in 2011 – required most state and local employees to contribute more for their benefits, thus reducing local government spending on those benefits and making it harder to compare spending before and after the change.

See the full report here.

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