% ARGUE HOW TO SPEND IT.
% FOR "HERE AND NOW" I'M STEVEN
% POTTER.
% >> IN A NEW REPORT TITLED THE
% ASTOUNDING STATE SURPLUS THE
% WISCONSIN FORUM RESEARCH
% DIRECTOR SAYS THE PROJECTIONS OF
% A 6.5 BILLION SURPLUS ARE USEFUL
% BUT FAR FROM CERTAIN.
% WE CHECK IN NOW WITH JASON STEIN
% FOR MORE ON THE IMPLICATIONS FOR
% STATE SPENDING AND TAXING.
% JASON, NICE TO SEE YOU.
% >> NICE TO SEE YOU.
% >> YOU HAVE COVERED AND
% RESEARCHED WISCONSIN STATE
% BUDGETS FOR A WHILE.
% AS YOU SAW THESE PROJECTIONS
% GROW, DID IT SURPRISE YOU?
% >> ABSOLUTELY.
% I THINK WHEN WE THINK ABOUT TWO
% YEARS AGO WHEN WE WERE AT THIS
% POINT, THINGS DID NOT REALLY
% LOOK THAT GOOD FOR THE STATE.
% THEN WE HAD TWO VERY LARGE
% FEDERAL PIECES OF LEGISLATION,
% THE APPROPRIATIONS ACT AND
% AMERICAN RESCUE PLAN ACT THAT
% JUICED THE ECONOMY.
% THEY SHOT STATE TAX COLLECTIONS
% UPWARD AND DESPITE INFLATION,
% THE STATE REALLY HASN'T SPENT A
% TON OF THAT MONEY.
% SO THAT WE FIND OURSELVES HERE
% WITH THIS REMARKABLE SURPLUS.
% >> HERE WE ARE.
% ASTOUNDING SURPLUS.
% WE DETAILED AND YOU EXPRESSED
% SOME OF THE REASONS THAT THE
% STATE COFFERS ARE SO FAT LIKE
% THE COVID FUNDS AND AN INCREASE
% IN SALES TAX REVENUE.
% BUT WHAT KIND OF CHOICES, THEN,
% DO LEGISLATIVE BUDGET WRITERS
% MAKE WITH THIS MONEY?
% >> WELL, THEY REALLY HAVE AN
% UNPRECEDENTED LEVEL OF CHOICE.
% CLEARLY YOU'VE SEEN THE GOVERNOR
% AND LAWMAKERS TALK ABOUT SOME
% SORT OF TAX CUTS BOTH THE
% PERSONAL PROPERTY TAX IS
% SOMETHING MENTIONED AS WELL AS
% INCOME TAX CUTS.
% I WOULD STAY TUNED FOR BOTH OF
% THOSE THINGS.
% AND THEN WE HAVE HAD A WORLD
% WHERE IT'S 8% INFLATION AND YET
% LOCAL GOVERNMENTS AND SCHOOLS
% HAVE SEEN FAIRLY TIGHT LIMITS ON
% THEIR STATE AND LOCAL FUNDING.
% THEY HAVE GOTTEN FEDERAL
% PANDEMIC FUNDSING BUT IT'S ALSO
% RUNNING OUT.
% ONE KEY QUESTION IS DOES THE
% STATE TRY TO LOOK AT SOME OF
% THOSE ISSUES AT THE LOCAL LEVEL
% AND TRY AND STEP IN AND ASSIST
% THE LOCAL OFFICIALS.
% >> FOR SURE WE KNOW THAT
% MUNICIPALITIES HAVE BEEN CRYING
% OUT FOR MORE SHARED REVENUE.
% WOULD NOW BE THE TIME PERHAPS
% BOTH WITH ONE-TIME AND MORE
% SUSTAINABLE FUNDING GOING
% FORWARD?
% >> RIGHT.
% THERE ALWAYS OPTIONS THAT STATE
% OFFICIALS HAVE.
% ONE THING THAT LOCAL OFFICIALS
% HAVE SOUGHT IS THE ABILITY TO
% LEVY THEIR OWN SALES TAX.
% CITIES AND VILLAGES SHOULD BE
% ABLE TO DO THAT.
% THE LEGISLATURE AT LEAST
% REPUBLICANS IN THE LEGISLATURE
% HAVE BEEN PRETTY RELUCTANT TO
% TAKE THAT ON.
% SO TO THEM INCREASING STATE AID
% TO MUNICIPALITIES MAY SEEM LIKE
% A COMPROMISE POSITION.
% WHEN WE TALK ABOUT THE
% MULTI-BILLION DOLLAR SURPLUS WE
% HAVE, IN YEAR ONE OF THE BUDGET,
% INCREASING SHARED REVENUE BY
% EVEN 10% WOULD BE SOMETHING LIKE
% $80 MILLION AND $160 IN YEAR
% TWO.
% IN A NORMAL WORLD THAT'S A LOT
% OF MONEY.
% BUT IN THE PRESENT CIRCUMSTANCE
% IT IS NOT AS MUCH AS IT
% TYPICALLY WOULD BE.
% >> THEY'VE ALSO ASKED FOR AGAIN
% THIS KIND OF SUSTAINABLE FUNDING
% MECHANISM AND THAT WOULD BE LIKE
% THE LOCAL SALES TAX.
% >> RIGHT.
% YOU KNOW, THE STATE WOULD HAVE
% THE OPTION OF EVEN LAWMAKERS WHO
% ARE CONCERNED ABOUT RAISING
% TAXES COULD COMBINE A LOCAL
% SALES TAX WITH, SAY, INCOME TAX
% CUTS AT THE STATE LEVEL AND
% LEAVE TAXPAYERS AT LEAST IN THE
% STATE AS A WHOLE BETTER OFF OR
% PAYING LOWER TAXES.
% BUT OF COURSE SALES TAX WILL
% HAVE MORE IMPACT ON PEOPLE AT
% THE LOWER END OF THE INCOME
% SCALES.
% IT IS MORE REGRESSIVE.
% SO THERE WILL BE A LOT OF
% DISCUSSION ABOUT THAT, I THINK.
% >> STEPPING BACK A LITTLE BIT,
% WHAT DO YOU REGARD AS THE
% BIGGEST NEED AREAS.
% >> GREAT QUESTION.
% AGAIN, SCHOOLS HAVE BEEN AT
% THEIR STATE AND LOCAL REVENUE
% LIMITS HAVE BEEN FROZEN FOR TWO
% YEARS.
% AND IS SO THAT'S SOMETHING THAT
% -- THE FEDERAL PANDEMIC AID IS
% RUNNING OUT.
% THAT'S A MAJOR ISSUE.
% YOU SEE AT -- IN TERMS OF PUBLIC
% SAFETY YOU SEE CITIES AND
% VILLAGES GOING TO REFERENDUM
% ASKING VOTERS TO APPROVE RAISING
% THEIR OWN PROPERTY TAXES THE PAY
% FOR PUBLIC SAFETY.
% AND YOU SEE IN SOME COMMUNITIES
% THAT THAT HAPPENED IN NOVEMBER,
% WHICH IS PRETTY NEW.
% YOU DON'T SEE THE LEVEL OF OTHER
% LOCAL GOVERNMENT REFERENDA.
% THOSE THINGS THAT STEP OUT.
% WE HAVE HIGHER EDUCATION, WE
% HAVE TURNOVER WITHIN STATE AND
% LOCAL GOVERNMENTS AND THEN WE
% HAVE INFRASTRUCTURE NEEDS AS
% WELL.%>> WE NEED A LOT OF MO
NEY TO DO
% A LOT OF THINGS AS ALWAYS IN A
% STATE BUDGET.
% BUT AS WE HAVE POINTED OUT, IT
% IS NOT LIKELY TO BE SMOOTH
% SAILING BETWEEN THE GOVERNOR AND
% REPUBLICAN BUDGET WRITERS.
% FOR EXAMPLE ON THINGS LIKE
% MEDICAID EXPANSION FOR AS WE'VE
% DISCUSSED SCHOOL FUNDING.
% >> ABSOLUTELY.
% SO ONE THING TO UNDERSTAND YOUR
% MEDICAID, THE SECOND BIGGEST
% EXPENSE FOR THE STATE
% HEALTHCARE, JUST TO KEEP CURRENT
% SERVICES THE SAME WOULD BE $3
% QUARTER OF A BILLION OVER THE
% NEXT TWO YEARS.
% AT THE SAME TIME THERE IS THIS
% OPPORTUNITY TO EXPAND THE
% PROGRAM AND PULL IN ADDITIONAL
% FEDERAL MONEY THROUGH THE
% FEDERAL AFFORDABLE CARE ACT AND
% THE AMERICAN RESCUE PLAN ACT,
% LIKE A BILLION AND A HALF OVER
% TWO YEARS.
% THAT'S SOMETHING THAT THE
% REPUBLICANS HAVE TURNED DOWN IN
% THE PAST.
% BUT I THINK THERE IS ALSO AN
% UNPRECEDENTED OPPORTUNITY FOR %
HORSE TRADING IN THIS BUDGET.
% SO EVEN THOUGH YOU WOULDN'T
% EXPECT THAT TO BE ON THE TABLE,
% PERHAPS IT MIGHT.