The State Budget: Taxes, Roads and Schools
At 399 pages and $76 billion, the recently passed state budget touches nearly every area of life in Wisconsin. The budget covers a lot of ground, but among the biggest items that a state budget can address are taxes, schools and roads. Today, I’d like to highlight how our budget handles these critical areas and the impact these changes will have on our area.
One of the most notable things about the 2017-2019 budget is the lack of any tax increases. The budget doesn’t raise your income tax, sales tax, corporate tax, or any tax whatsoever. In fact, the budget actually eliminates two state taxes altogether, the Alternative Minimum Tax and the state portion of your property tax bill. Eliminating the state portion of your property taxes will add to the $3,000 that a typical homeowner has already saved on their property tax bill since our 2010 property tax freeze.
It’s important to note that even when taking into account these taxes being eliminated, the state will end the two year budget period with $200 million in cash-on-hand and our borrowing over the last two budgets will be at the lowest level in 20 years. The state’s rainy day fund will also be the largest in state history, 168 times larger than it was in 2010.
Other tax cuts in the budget are aimed at helping small businesses grow and thrive. Most notably, part of the personal property tax that businesses pay on the value of non-manufacturing equipment has been eliminated. The change will save small businesses $74 million over two years and puts Wisconsin on the path to eliminating the administratively burdensome personal property tax altogether.
Despite cutting taxes, the budget makes significant new investments in education for our kids. Under this budget, K-12 schools will receive an all-time high of $11.5 billion in state aid, including $636 million in new state aid, the largest increase in a decade. Additionally, the budget increases UW-System funding by more than $110 million and extends the tuition freeze, saving the average Wisconsin student $6,311 over four years. Technical colleges will also receive a boost in funding, including an additional $5 million to help train students to fill jobs in high need fields.
The budget also contains major investments in rural infrastructure, including the largest increase in local road aids in 20 years. The new money will benefit our rural roads, giving nearly $87 million to local governments for road and bridge repair. Also important to our area is a $35.5 million increase for rural broadband and the creation of a permanent broadband expansion grant to help extend broadband into rural areas.
The budget continues to reform state government to ensure that taxpayer dollars are spent wisely and efficiently. The most significant reforms are in the Department of Transportation. The repeal of prevailing wage laws, which artificially raise wages for state construction projects, is estimated to save the state $300 million annually. In addition to these reforms, the budget eliminates 252 positions at the Department of Transportation and reduces transportation bonding to the lowest it’s been since 2001-03.
I was happy to hear from many of you during the budget process. Even if we couldn’t get everything that everyone wanted into the final version, this budget cuts taxes, makes important investments in education and infrastructure, and reforms and streamlines state government. I haven’t even mentioned the significant investments in rural health, workforce development, or welfare reform in the budget.
As I said before, the state budget touches almost every aspect of our daily lives here in Wisconsin. It took a while to get it done, but, I am happy to say that we got a lot done for businesses, taxpayers and kids here in Wisconsin. Now we can all take a little time to enjoy another beautiful autumn here in Wisconsin before the hustle and bustle of the holidays takes over our lives again!