Revolution on Wheels: High Tax States See a Stealth Migration Out

Related to Johnny Winston, Jr.'s post below, Karen Hube notes a significant outbound migration from many high tax states [Wisconsin is ranked 5th in tax burden as a % of per capita income (11.4%)] including Minnesota to South Dakota:

NOT SURPRISINGLY, MANY STATES are feeling the drain of fleeing taxpayers. At a time of serious competition between states for jobs and tax revenues, "states with high taxes are losing their wealthiest and most successful taxpayers, as well as businesses, and they're not creating as many jobs," says Dan Clifton of Americans for Tax Reform.

Serious fiscal troubles started for most states after the stock market tanked in 2000. "They had been matching their spending habits with the flood of revenues that came in during the boom years of the 1990s," Clifton says. "When that spigot got turned off, many states were incapable of moderating their spending to match the new reality."

In 2000 states were still flush enough to cut taxes by a net $5.8 billion for fiscal year 2001. But shortly after, in a scramble to boost revenues, states started raising taxes.

Johnny's point is important: Schools must diversify their revenue sources while using existing resources as efficiently as possible. This includes trying to use all sources, including, as Ed Blume pointed out, federal funds, such as the $2M in Reading First money. WISTAX notes that Wisconsin's rose 10% last year. Finally, Neil Heinen notes that Wisconsin's state budget has a "structural deficit".

Bobbi raises a useful point regarding the construction of new schools: the existing $320M+ operating budget is spread over more facilities, which as several teachers have mentioned to me, has implications for current facilities.

Posted by Jim Zellmer at February 11, 2006 6:24 AM
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