MacIver News Service | June 11, 2013
Updated Wednesday June 12, 2013 at 12:45pm[Madison, Wisc…] Under the Joint Committee on Finance’s (JFC) revised budget, spending is reduced, Wisconsin is projected to have a $505 million structural deficit, and property taxes are estimated to increase by $29 on a median-valued home in each year of the biennium according to new estimates from the Legislative Fiscal Bureau (LFB).
JFC passed their version of Governor Scott Walker’s budget last week that totals $70.1 billion in all funds over the biennium. The committee’s version of the budget decreases Walker’s recommendations by $289.7 million thanks to decreases in bonding.
Bonding in the JFC version of the budget is $1.8 billion, while the original bonding would have equaled $2.2 billion.
LFB also predicts that the budget will end the 2013-2015 biennium with a $109 million surplus, but is projected created a structural deficit of $505 million. The structural deficit is a decrease from the Governor’s original proposal, which was equal to $684 million.
As the MacIver News Service reported previously, LFB estimates do not account for economic growth. Supporters of Rep. Dale Kooyenga’s (R-Brookfield) tax reform plan have pointed to an LFB memo that shows with a three percent economic growth rate, Wisconsin would actually have a structural surplus under Kooyenga’s original plan.
The most recent memo from LFB also shows that the $505 million structural deficit is the one of the lowest in the last ten budgets. Almost every single budget since fiscal year 1999 (FY99) has produced a structural deficit of $1.5 billion or more.
Gross property tax levies in the state are projected to increase by $341.3 million, an increase of $68 million from the Governor’s original recommendations.
Property taxes on a median-valued home are expected to increase by $29 over the base in each year of the biennium. The median home value in Wisconsin is also expected to increase from $151,148 to $154,800 in FY15.
The small increase in property taxes is expected because of increased revenue limits for school districts and other budgetary items that affect counties and municipalities.
LFB also released a comprehensive comparison of the budget based on Governor Walker’s recommendations and the version passed by JFC. That document can be viewed here.
The Assembly is expected to take up the 2013-2015 budget next week.
JFC made major cuts to Governor Walker’s new positions in multiple departments. In total, the Committee reduced the number new positions by 730. Of the 730, JFC gave the administration discretion on where 450 of the positions will be cut.
Members of JFC also voted to reduce total direct funding to the Wisconsin Economic Development Corporations by more than half. A majority of that funding will now have to go through the Committee to be approved.
Another department that received one of the largest cuts by percentage from the Governor’s recommendations was the Wisconsin Historical Society. Total funding was reduced by 8.7 percent, or just over $4 million, and JFC decided the Historical Society would not take over the management of Circus World.