The 10 Most Expensive State Programs
How does the state spend its money? And how might you change this?
Two weeks ago, this column provided numbers to let you design your own new tax code. It showed, for example, how you could lower personal income and property taxes by charging the 5 percent state sales tax on now-exempt goods and services.
This week, we’ll look at the other side of the ledger, spending by the state. Think of the general fund as state government’s main checkbook and you get to control it. You decide whether you like how state general-fund dollars were spent and, if you disagree with those priorities, how you would change them.
*No. 1: $5.14 billion in aid to K-12 schools, including public, charter and controversial Parents’ Choice/Voucher schools.
Context: Over the past five years, annual state aid to K-12 schools has ranged from $4.9 billion to $5.3 billion. That has Democrats charging that Republican Gov. Scott Walker and GOP legislators slashed funding for what should be the state’s top priority. But DOA fiscal reports for earlier years include this important caveat: Former Democratic Gov. Jim Doyle used $552 million in federal economic “stimulus” cash in fiscal 2009, and $236 million of those federal funds in 2010, to preserve aid to schools. Doyle used federal funds to protect school aids during the Great Recession.
*No. 2: $2.3 billion for health-care through the Medicaid program, which the federal government more than matched.
Context: A record 1.18 million residents – or one in five – now rely on Medicaid for health care, and the program costs more than $8 billion annually. Over the last five years, state Medicaid costs have more than doubled, rising from $1.13 billion to $2.3 billion. The state Department of Health Services has said it needs an additional $760 million in state funds to continue that coverage through mid-2017.
*No. 3: $1.16 billion to run prisons and other Department of Corrections programs.
Context: It cost 2.6 percent more to run prison, probation and parole programs last year, largely due to a 1 percent pay raise and overtime and health-care costs. Wisconsin’s prison population averaged 22,405 last year.
*No.4: $1.15 billion to fund the 26-campus University of Wisconsin System.
Context: This summer, Walker proposed a second round of two-year tuition freezes on UW campuses, starting in fall 2015. The UW Board of Regents, which sets policy for the system, says it needs $95 million more to offset that freeze.
*No. 5: $895 million to pay for tax credits that help offset property tax bills.
Context: Reduce these tax credits, and property tax bills go up.
*No. 6: $822 million in shared-revenue payments to local counties, cities, villages and towns.
Context: Dialing back state aid to local governments, while keeping tight controls on their property tax levies, could reduce local services.
*No. 7: $234 million for specific tax relief programs, including the Earned Income Tax Credit (EITC), $103 million; Homestead Tax Credit, $118 million; Veterans and Surviving Spouses Tax Credit , $23 million, and Farmland Preservation Credit , $19 million.
Context: Some of these programs are very popular; the EITC alone helped 267,500 low-income families.
*No. 8: $184 million in Community Aids to counties for programs that help the poor, children who need foster care and other protections, the elderly and disabled.
*No. 9: $150 million for the federal Supplemental Security Income program that helps low-income elderly, blind and disabled residents and parents of disabled children.
Although it doesn’t make the Top 10 list, state aid to technical colleges was about $110 million last year. Walker and Republican legislators want to also freeze technical college tuition for two years. But others say that could hurt tech colleges, if state government doesn’t make up money lost because of the tuition freeze.
These Top 10 programs total $14 billion – 84% of all general-fund spending last year. And aid to K-12 schools and Medicaid alone make up 51 percent of all spending.
Your turn. About $14.43 billion in general-fund taxes will be collected this year. How would you spend it?