By Ola Lisowski
Wisconsin taxpayers got more good news in the final week of 2018. The overall tax burden is at its lowest point in almost 50 years, according to a new report by the nonpartisan, independent Wisconsin Policy Forum.
In 2018, 10.5 percent of Wisconsinites’ personal income went toward taxes, down from 10.6 percent in 2017. It is the seventh straight year that the overall federal, state, and local tax burden has fallen.
It’s also the lowest-ever recorded tax burden since the Wisconsin Policy Forum began tracking the figure in 1970.
Lawmakers including Rep. John Nygren (R-Marinette), co-chair of the state’s budget-writing Joint Finance Committee, celebrated the news as evidence that conservative reforms are working in the state.
WI’s tax burden has dropped to a 50-year low. This is great news for the taxpayers of WI and marks the 7th straight year of declines. Thanks to conservative reforms, more Wisconsinites are working, taxes are declining, and WI continues to move forward! https://t.co/twNiBC6CvX
— John Nygren (@rep89) December 19, 2018
The report attributed the tax burden’s fall to an impressive 3.6 percent growth in Wisconsinites’ personal income this year. Personal income has steadily grown in the aftermath of tax cuts and a growing economy.
Despite the overall tax burden continuing to fall, state tax collections increased. The state is expected to finish the 2018-19 fiscal year with a gross ending balance of $622.6 million. That figure is hundreds of millions more dollars than previously projected.
The Comprehensive Annual Fiscal Report (CAFR) released this month shows that Wisconsin ended the 2017-18 fiscal year with a $588.5 million surplus.
The CAFR also showed that the state made another investment in the Budget Stabilization Fund, also known as the “rainy day fund.” That balance now stands at $320.1 million overall, the largest in state history. General tax fund collections increased by 4 percent over last year, while the state spent less than it budgeted in 2018.
Outgoing Gov. Scott Walker announced the news in a press release.
“Thanks to eight years of our strong financial management and growing economy, Wisconsin has ended every fiscal year we have been in office with a surplus,” Walker wrote, adding that the surplus will be the state’s second-largest opening balance since 2000.
The news comes as Walker ends his eighth year in office. When he began his first term as governor in early 2011, the state was facing a multi-billion dollar deficit.
Ola Lisowski is a Research Associate at the MacIver Institute who focuses on education and tax policy. This appears courtesy of the MacIver Institute.