Connecting the Dots: Federal Policies Are Worsening Wisconsin’s State and Local Budget Problems
Publication Date: October 2004
Special Collection: John D. and Catherine T. MacArthur Foundation
Keywords: Economic inequality; Economic projections; State budgets; City budgets
At a time when state and local governments around the country struggle to overcome continuing budget shortfalls, the federal government is only making their jobs harder. Federal policies have contributed significantly to the fiscal crises in many states, including Wisconsin, by reducing state revenues and imposing additional costs. These policies – primarily unfunded mandates and federal health care and tax policies – have cost Wisconsin $2.4 billion since fiscal year 2002, according to a recent report by the Center on Budget and Policy Priorities (Washington, D.C.) (CBPP) in Washington, D.C.
The additional costs and lost revenue have significantly hampered state and local governments’ ability to recover from the recent economic downturn. Elected officials throughout Wisconsin have been forced to deal with these costs and the slow pace of the economic recovery by making budget cuts and raising other revenue sources. The resulting impact on families throughout the state is just beginning to be felt in the form of higher costs and reduced public services. What’s worse, the cost to Wisconsin from these federal policies is rising, with little relief in sight.