The recent State of the State address provided an opportunity to assess the reforms and progress made in the past year to get Wisconsin’s fiscal house in order and improve our state’s business climate. The positive improvement we are seeing is encouraging and shows that we are heading in the right direction.
By comparison, states that did not make the difficult decisions to address their fiscal challenges have seen higher taxes, massive layoffs, and lower credit ratings. One of the nation’s bond rating agencies recently downgraded Illinois' credit rating from A1 to A2, making it the lowest rating in the country. According to the report, Illinois lawmakers were cited for failing to seriously address the budgetary challenges facing their state, including underfunded pensions and late bill payments. Illinois’ financial woes and policy decisions, including a 67 percent income tax increase, are causing job providers to leave the state.
The reforms enacted in Wisconsin in the past year have aimed at putting taxpayers first while giving local governments greater ability to balance their budgets and flexibility to respond to local priorities. To this end, an over $3 billion budget shortfall was eliminated while achieving a net reduction in the state tax burden. $800 million in overdue bills were paid and borrowing was reduced, resulting in an improvement in Wisconsin’s credit rating outlook.
Additionally, the limits passed on property taxes held the change in the statewide property tax levy to the lowest level in 15 years. According to estimates by the Wisconsin Taxpayers Alliance (WISTAX), growth in statewide property taxes was limited to 0.3% this year. WISTAX cited the property tax freeze included in the two-year state budget as the primary reason for this positive news. Given that this number reflects a statewide average, there were some property owners that saw an actual reduction in their tax bill, while others saw an increase.
As we have made progress in addressing our financial situation, we have maintained our focus on jobs and the economy. Job creators are noticing the changes in our state, as Wisconsin has seen its improved business climate recognized in rankings by CNBC, Forbes, Chief Executive Magazine, and the Small Business and Entrepreneurship Council. According to the U.S. Bureau of Labor Statistics, over 21,000 more people are employed in Wisconsin than a year ago.
Many challenges still lie ahead, but we are seeing the tough decisions made in the past year pay off. Please stay in touch as the legislative session continues by calling my office at 1-800-862-1092 or sending me an e-mail at Sen.Harsdorf@legis.wi.gov.