Look who I found at the Wisconsin State Fair! Bucky was on hand this week, along with the University of Wisconsin band, for the Governor's Blue Ribbon Livestock Auction.
Let me back up a moment. The State Building Commission, on which I serve, historically meets every year during the State Fair. Even though it's a fun day, we reviewed and authorized several important projects. We approved the refinancing of state debt that will result in major taxpayer savings (see below). We authorized spending $252,000 of state taxpayer money so that Wisconsin would receive $1,275,000 in matching federal money to rehabilitate facilities at Fort McCoy and the Milwaukee Readiness Center. We authorized badly-needed renovations to move forward at UW-Eau Claire, UW-Oshkosh, UW-Superior, UW-Stevens Point and elsewhere. We authorized urgent security and camera upgrades at the Green Bay Correctional Institution that will keep our inmates and security professionals safe. All these actions will have important impacts in communities across our state.
After our business was complete, I attended my first-ever Governor's Livestock Auction, which supports youth exhibitors who raise and show state champion-status beef, swine and sheep. Let me tell you something: these young men and women spend all summer, and sometimes all year, raising some of the finest animals in the world. Their families are often the same families who produce the world-class agricultural products and animals that Wisconsin is famous for. And Wisconsin appreciates them; some of our state's best-known corporations and employers brought their checkbooks to support these young people. Companies including Meijer and Bob Lannin Racing (who teamed up to spend $50,000 to buy the grand champion steer), Walmart, Miller-Coors, the WE Energies Foundation, Kwik Trip, Coca-Cola and many others paid thousands of dollars to support these exhibitors, their future education and, in quite a few instances, charities such as local food pantries or the Governor's Blue Ribbon Livestock Auction Scholarship Fund. The full list of participants and buyers is accessible here. Our young people have a bright future ahead of them, and our communities appreciate their hard work. In a few weeks, the Sheboygan County Fair also hosts a county-level meat animal auction that works much the same way as the Governor's sale; I urge you to consider attending and supporting our local youth.
As always, I encourage you to follow my updates on social media or contact my office directly with your questions. Best wishes on your weekend!
A Huge Upgrade
Late last week, Moody's Investors Service upgraded the State of Wisconsin's general obligation rating to Aa1, which is just one step below the highest possible rating. Basically, that means that when Wisconsin's government engages in borrowing and lending (which happens frequently in the normal routine of the state's financial operations), we are considered a more reliable trading partner and a less risky investment. We will get more favorable interest rates on our debt, resulting in significant taxpayer savings, beginning with debt refinancing deals that I voted to approve this week in the State Building Commission (see above).
Moody's analysts explained that the upgrade reflects "the proven fiscal benefits of the state's approach to granting and funding pension obligations when many other states are experiencing stress from rising costs and heavy liabilities; an economy that delivers steady but moderate growth; conservatively managed budgets; and adequate liquidity . . . [d]espite Wisconsin's slightly elevated debt levels, its fixed costs for pensions, debt and retiree health benefits are below the median for Aa1 states and outweigh the credit challenge of the state's negative unassigned fund balances." It's great news indeed to have further validation, this time from the business world, that Wisconsin's conservative reforms continue to bear fruit and move us in the right direction.
Wisconsin is the only state so far in 2017 to receive a rating upgrade; several other states have received downgraded ratings. Contrast Wisconsin's good news with the news from our southern neighbor last month, where Moody's announced that Illinois' already-awful Baa3 credit rating may be downgraded to the lowest possible "junk" status. (According to Moody's, even the $5 billion income tax increase approved by the Illinois legislature in July may not have a substantial effect on that state's thoroughly unsustainable spending problem. What a mess!)
Why Do We Have to Pay?
One of the more common questions that folks have about state government has to do with tax reciprocity. Every year, Wisconsin's government ends up having to make a payment to Illinois' government due to our states' long-standing income tax reciprocity agreement. Understandably, this causes some questions because, at first glance, it might seem that Wisconsin is getting a raw deal.
The truth is that no matter where you live, you owe state income tax in the state where you earn wages. If you live in Illinois but commute across the border every day to earn wages at your job in Wisconsin, you owe Wisconsin income tax on your Wisconsin wages. To keep things as simple as possible for taxpayers, Wisconsin and Illinois allow such employees to file just one state income tax return (in their state of residence); under this agreement, the two states' revenue departments sort out the taxes that are owed to one another, saving taxpayers the trouble of filing more than one state income tax return.
It turns out that about twice as many Wisconsin residents (56,000 or so) work in Illinois compared to Illinois residents (about 29,000) who work in Wisconsin and file taxes under the simplified reciprocity system, which is why Wisconsin typically has to pay up. But remember: Wisconsin residents are living here, investing in our communities, paying property taxes and sales taxes and transportation fees primarily in their home state... so I think that Wisconsin is ultimately getting the better end of the deal!