It used to be that we scurried to drop our income taxes in the mail before the April 15th deadline. Now most of us log on to our computers to file taxes instead of standing in line at the Post Office. The result, though, is the same: income taxes are on everybody’s mind on April 15th. Wisconsin will collect more than $6 billion in personal income taxes this year. Where does all that money go?
For every dollar you pay in Wisconsin taxes that goes into the General Fund, by far the biggest share this year – about 41¢ – will go towards supporting K-12 education. Schools in Wisconsin are financed through state aid, local property taxes, federal aid, and other local revenues such as fees.
The state aid to schools helps keep property taxes from being higher than they are now, as does an additional 13¢ will go to county and municipal governments to provide services, and 7¢ that will provide direct property tax relief in the form of credits that appear on your property tax bill. All of the forms of direct and indirect local aid or property tax relief account for 61¢ of every dollar you pay in state income or sales taxes.
Eleven cents of every income tax dollar will support higher education in the form of the University of Wisconsin System, technical colleges, and student grants and aid. (The state funds about one-quarter of UW System operations.) Another 8¢ will go towards corrections costs, with the same amount going to cover Medical Assistance/BadgerCare costs.
With about 88¢ of every dollar of state taxes dedicated to supporting schools and property relief, higher education, corrections, and health care, only about 12¢ is left for other public programs and structures. That last dime and two pennies of every state tax dollar will be spread out over a variety of state programs, such as environmental programs, the state’s judicial system, prescription drug assistance for the elderly, and tax credits such as the Homestead Tax Credit and the Earned Income Tax Credit.
Filing income taxes will never be pleasant. But whether we’re clicking a mouse or licking a stamp to submit our forms, we should remember that state income tax dollars fund essential public services and maintain public structures we’ve taken decades to develop.