Monday, October 14, 2019

Wisconsin keeps getting less money from DC. That's not a good thing

We've known for several years that Wisconsin is a "donor state" that pays more in taxes than it gets back. But an article over the weekend from the Wisconsin State Journal was still surprising in seeing just how comparatively little we get from DC.
According to a new Pew Research Report, 26.3% of the state’s budget came from federal dollars, ranking Wisconsin 45th among states in its ability to harness dollars from Uncle Sam.

In 2007, just before the Great Recession, about 24.7% of the state budget came from the federal government, ranking 38th among the states. In the aftermath of the Great Recession, that number swelled to 33.2% in 2010, ranking 33rd.

The percentage gradually declined to 26.3% in 2016 and 2017, ranking 45th in both years, the most recent for which Pew compiled state-by-state comparisons.

Jon Peacock, director of the liberal Wisconsin Budget Project, said Wisconsin’s decision not to expand Medicaid led to the state losing out on increased federal revenue.

Between 2013 — the year before Medicaid expansion was allowed — and 2017, states on average experienced a 2 percentage point increase in their share of federal revenue. Over that same time period, Wisconsin’s share decreased by 1.4 percentage points.
If you dive into Pew's "Fiscal 50" numbers for al the states, you can see that while Wisconsin has generally lagged behind the rest of the country in getting federal funds. This may partly be due to having lower amounts of poverty and fewer military installations than most places, but this gap has grown in the last few years.

And Medicaid continues to take up a larger share of the state budget. While 2016 featured one of only 2 declines in that share during the 2010s, it still takes up quite a bit more than it did in 2010. And you can see where Wisconsin’s share grew while the total US amount fell after Medicaid expansion was available in 2014.

And before you say "well Jake, isn't it good that we aren't as reliant on DC", let me note that those “low-tax, self-reliant” GOP states in the South and the West sure don’t have any problem gobbling up the tax dollars that the rest of us send to Washington.

Yes, some of that is due to an increased amount of federal lands and needs for military coverage in many of those states. But imagine how differently our state tax systems might look if the distribution of federal funds were more even, especially for us in the Upper Midwest that generally have made more of an effort to take care of our less fortunate (well, at least we used to).

One last chart that grabs me is this one on state personal income (adjusted for inflation). You can see that Wisconsin lagged behind the US in every year that Scott Walker and the Wisconsin GOP.

Maybe we could have used some of those federal dollars that Scott walker turned down for rural broadband and the train between the Twin Cities and Chicago, eh? Along with the more than $1 billion we have turned away by not expanding Medicaid.

And maybe we'd be doing a lot better in all these stats if we hadn't have had a Koched-up college dropout in charge who cared more about hurting Barack Obama and kissing up to DC oligarchs than in helping Wisconsinites during the 2010s. We're still paying that price today.

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