A recent budget analysis reported a potential tax increase is needed to balance the next state budget to fulfill Governor-elect Tony Evers’ campaign promises to increase funding for schools despite the state’s slow revenue growth.
A Wisconsin Policy Forum report examined a potential increase in state funding for schools, and how much state revenues would have to grow to cover these costs. The report also compared this to recent growth in state taxes and fees.
According to the report, the state would need more than $2.2 billion in additional revenue to cover cost increases in K-12 school aid, Medicaid and a 1 percent increase for other programs like the University of Wisconsin system.
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“Our broad review indicates that absent strong growth in revenues, the next state budget may have difficulty accommodating campaign promises and rising costs in ongoing programs without a tax increase,” the report said.
A 1 percent yearly increase in funding for other programs like the UW System, prisons and local government aid would require a two-year total of $256 million.
According to the report, K-12 schools represent the state’s biggest expense — especially as Evers called for a two-thirds funding increase for K-12 education.
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According to WPF, state revenue growth has averaged about 2.9 percent per year — a number that could have been higher if not for a series of tax cuts since 2012.
To cover the $2.2 billion in additional costs, state revenues would have to increase to 3.8 percent in the first year and 5.3 percent in the second. The WPF report said this growth would be difficult to achieve.
State agencies are currently submitting budget requests, according to the Department of Administration. Evers will officially present the budget to the new legislature before Jan. 29.