Mario Loyola says even with cuts, Wisconsin spending and taxing tops Texas

Some conservatives are pushing Gov. Scott Walker to use his second term to enact much deeper changes in Wisconsin government.

"When Walker got to office, Wisconsin was one of the worst states in the country in which to do business, with one of the highest regulatory and tax burdens," Mario Loyola, a senior fellow at the Texas Public Policy Foundation, wrote in the conservative National Review on Nov. 5, 2014.

"Some estimates now rate it as number 14 for doing business, but don’t be deceived," Loyola wrote under the headline, "Walker’s Win: Why it was the most important GOP win in the country."

He added: "Wisconsin’s state budget is almost twice as large per person as the state budget of Texas, and even after billions in tax cuts, Wisconsin’s working families and businesses remain subject to a heavy tax burden."

As Walker ramps up exploration of a 2016 presidential campaign, let’s check the claim about spending and taxation in the Badger state.

We’ll take the easy part first.

Taxes

Walker and Republican legislators have approved a variety of tax freezes and cuts.

In March 2014, we rated True a Walker claim that he’s delivered $2 billion in tax cuts, mainly by reducing income tax rates and limiting local property tax hikes.

But an Oct. 14, 2014 report by the Tax Foundation ranked Wisconsin among the highest 10 states for business taxes on a scale that included corporate, individual income, sales, unemployment insurance and property taxes.

Census figures on tax collections lag by two years, so they don’t account for all of Walker’s cuts. But the latest figures showed that property-tax and income-tax collections in Wisconsin run more than 25 percent above the national average, we reported.

There’s ample evidence that Wisconsin is among the middle group of states when all sources of revenue are considered. But on taxes alone, the state remains closer to the top.

Spending

To back up his claim, Loyola, a University of Wisconsin-Madison graduate, pointed us to the state expenditure study done in 2013 by the National Association of State Budget Officers.

That report doesn’t compute per-capita spending, but based on a survey of budget officials it shows a total spending figure from state revenues, federal aid and other sources.

We did the math and it backs up the claim: In 2013, Wisconsin "state budget" spending was about $7,500 per capita compared to about $3,600 in Texas.

The study comes from a respected trade group and other organizations refer to its findings.

The study cautions, however: "State governments have specific functional responsibilities that vary among states depending on the role of local governments in providing services. For example, in many states, the funding of elementary and secondary education is considered primarily a local function."

We could not replicate the study’s findings using U.S. Census surveys of state and local government finances.

That Census data is preferred by researchers, though one drawback is that reporting of the data lags about two years.

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“The Universities of Wisconsin are 43rd out of 50 states in the nation, in terms of public support for our universities. The $855 million (budget request) gets us up to average.”

One researcher, Dale Knapp with the Wisconsin Taxpayers Alliance, said the census figures are better because the Budget Officers’ study "includes some things that we generally don’t consider part of the state budget -- the biggest of which is state retirement payments. They also include unemployment payments, lottery prizes, and capital expenditures, which can vary from year to year."

When looking just at state spending (and excluding transfers to local governments), Wisconsin state government spends 27.1% more per capita than Texas in 2011, Knapp found.

We also asked the Wisconsin Budget Project to run comparisons.

Tamarine Cornelius and Jon Peacock of the group told us that Wisconsin per capita "direct general expenditures" were $1,114 above that of Texas, or 15 percent. That was for state and local expenditures.

Wisconsin ranked #21 among the states; Texas was #38.

So neither group backs up the claim that Wisconsin state government spends 100% more -- twice as much -- as Wisconsin on a per-capita basis.

Still, we found that the numbers in the study cited by Loyola were drawn from the annual financial reports published by Texas and Wisconsin.

On a topic where various definitions of "state budget" are fair game, that gives his claim a reasonable basis.

Our rating

"Wisconsin’s state budget is almost twice as large per person as the state budget of Texas, and even after billions in tax cuts, Wisconsin’s working families and businesses remain subject to a heavy tax burden."

Loyola’s on target on taxes, and cites a credible study on spending that is open to challenge but generally defensible.

We rate his claim Mostly True.