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July 22, 2008

Referendum Climate: Wisconsin State Tax Collection Update

Department of Revenue:

This report includes general purpose revenue (GPR) taxes collected by the Wisconsin Department of Revenue, and does not include taxes collected by the Office of the Commissioner of Insurance (OCI), administrative fees, and other miscellaneous revenues. Total General Fund tax collections are reported in the Department of Administration’s Report of Monthly General Fund Financial Information, which includes GPR and program revenue taxes collected by all state agencies.
Overall tax collections are up 2.9%, however, state spending is growing at a faster rate, which has caused state and local spending changes. I wonder how the 2.9% tax collection increase compares to the average annual wage changes?

More: "Where Does All That Money Go?" by John Matsusaka:

Some of it went to cover increases in the cost of living, and state spending naturally grows with the size of the population. But even adjusting for inflation and population growth, state spending is up almost 20% compared with four years ago, a big enough bump that ordinary Californians should be able to notice it. The state's financial statements describe where the money went -- the big gainers were education ($13 billion), transportation ($10 billion) and health ($10 billion) -- but not why these billions don't create even a blip on our day-to-day radar.

One possibility is that we simply do not notice all of the valuable services we receive. A national 2007 survey by William G. Howell at the University of Chicago and Martin R. West at Brown University found that respondents underestimated spending in their school district by 60%; on average, they believed spending was $4,231 per student when in fact it was $10,377. They also found that Americans underestimated teacher salaries by 30%. How many Californians know that public school teachers in the state earn an average of $59,000 a year, essentially tied with Connecticut for the highest average pay in the country? Likewise, perhaps we don't notice the repaired roads or new buses and trains that take us to work.

On the other hand, maybe these billions of dollars just do not translate into services that are valuable to us.

Posted by Jim Zellmer at July 22, 2008 2:44 PM
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