Despite the public efforts by the Republican minorityin the Wisconsin Legislature to attack the state budget, privately theymust admit that the Democratic budget has taken away all of their usualarguments. The Democrats created a balanced budget despite the factthat the governor and the state Legislature were facing a $6.6 billiondeficitand they balanced the budget without raising the sales tax, thepayroll tax or the income tax except for the richest 1%. The Democratsalso reduced the amount of tax dollars spent in this budget by $643million, a 3.4% reduction from the last budget.
Aswe all know, when the economy goes into recession and people lose jobsand businesses lose revenues, the primary sources of state taxrevenues, income taxes and sales taxes decline. These tax revenues havedipped significantly during this recession, which is why virtuallyevery state government is facing a deficit. Fortunately, the statebudget is built on more than state tax revenues. For example, the statereceives billions of dollars each year from the federal government.This year the federal stimulus money has also helped with a number ofdirect job-producing projects, especially transportation projects.
So How Does the Budget Directly Affect Us?
Whatdoes the budget actually do, and how does it affect us as Wisconsinresidents and, more specifically, those of us living in southeasternWisconsin? Despite all the talk of budget cutting, these were notsimply across-the-board cuts. The governor and the Joint FinanceCommittee had to make some very tough decisions with limited money. TheDemocrats, who have control of both houses of the Legislature and thegovernor’s office for the first time in 22 years, set their prioritiesand made many cuts, but they also supported a number of provisions thatwill have a big impact on our lives.
Building the Wisconsin Economy and Creating Jobs
- Thebudget expanded the angel financing and venture capital tax credits tohelp create and expand small and midsized businesses, which are thebusinesses that create the vast majority of jobs.
- It increasedfinancial aid to students in the UW system and the technical colleges.
- Thebudget provided funding for UW-Milwaukee’s School of Public Health andSchool of Freshwater Sciences.
- Additional monies were provided to thetechnical colleges to focus on retraining laid-off workers.
- Thebudget authorized the creation of a three-county (Kenosha, Racine andMilwaukee) regional transportation authority to build the commuter railline, the KRM, that will link with the Chicago to Kenosha commuter railsystem.
Protecting the Environment
- Afteryears of negotiations, the eight Great Lakes states and two Canadianprovinces signed the Great Lakes Compact to protect our freshwatertreasures, and this budget provided the state DNR with the necessaryresources to fulfill Wisconsin’s obligations in the compact.
- Thisbudget restored monies for local communities to create or continuetheir Clean Sweep programs, which collections of hazardous materialsfrom responsible citizens who clean out their basements and garages andwant to dispose of these hazardous materials in a safe way.
Supporting Our Children, Families and Quality of Life
- The budget expanded the program that provides much-needed assistance for families with disabled children.
- Itprovided money to begin to come close to providing a fair rate forexpenses incurred by families that open their homes to children in needof foster care.
- The budget also increased the aid to local communities to fund homeless shelters and transitional housing efforts.
- Itincreased the funding for the veterans’ property tax credit.
- Itincreased the low-income utility assistance program and the homesteadtax credit.
- The budget provided some monies for civil legalservices for those who cannot afford an attorney.
- It also increased thefirst dollar credit for property tax relief by $55 million, helping tolower the property tax bill for homeowners.
Providing Better Health Care
- The budget expanded health insurance coverage to include the costs of treating a child with autism.
- Itrestored funding for respite care that provides support for caregiverswho are providing care to a family member suffering from a very seriousillness like Alzheimer’s disease or a severe disability.
- The budget expanded health care coverage to those suffering from mental illness, alcoholism or drug dependency.
- Thebudget also provided incentives to medical students to practice inunderserved areas after graduation and also restored funding for thecommunity health centers that serve thousands of lower-income residents.
Taxes
Nothing comes without some pain, so what happened with taxes?
- For99% of income earners, there is no income tax increase, but there willbe a new marginal tax bracket of 7.75% for the top 1% of salaryearners.
- There are no new payroll taxes or statewide increasesin the sales tax, but following the advisory referendum passed byMilwaukee County voters last fall, the budget authorized the creationof a regional transit authority (RTA) for Milwaukee County. This RTAwill be funded with a 1% county sales tax that will lower propertytaxes by taking the entire costs of the transit system, the parks, theMilwaukee County cultural institutions and the emergency medicalservices off of the property tax.
- The budget closed the loophole in thestate tax code that allowed multi-state corporations to avoid payingtheir fair share of Wisconsin taxes.
- The budget also increasedsome specific taxes or fees such as a 75-cent per pack increase in thecigarette tax, an increase in the gun background check fee from $8 to$13 when purchasing a gun and a reduction in the capital gains taxexclusion from 60% to 40%.
Comment on this article at www.expressmilwaukee.com.
