Monday, February 20, 2006

Still reading Reschovsky

One interesting note about the oft-cited Reschovsky study that says Wisconsin ranks 23rd in the country in general revenue per $1000/personal income. If, as seems to be the case, he is using the rankings for general state and local revenue from this 2005 Legislative Fiscal Bureau report, the numbers apparently use federal revenue. This lowers Wisconsin's ranking because we don't do too well at the federal trough. When you consider general revenue from our "own sources," we actually rank 15th.

More significantly, it is not at all clear to me that the more pertinent measurement is not taxes, rather than general revenue. When you limit the query to state and local taxes, we are 6th or 13% above average. In the face of this , opponents of the amendment want to change the subject to general revenue from all sources. But there is a difference between a tax and most forms of fee. The latter is compulsory while the former may not be to the extent that one can avoid using a particular state service. A fee is not always just a tax by another name.

All this and other types of wonky goodness can be found in this 2005 Legislative Fiscal Bureau report.

h/t: Seth Zlochota


Seth Zlotocha said...

I just heard back from Professor Reschovsky. Here is his response to my question about how he got his 23rd in the nation ranking:

"I used data on 'general revenue from own sources' for state and local governments for the 2001/02 fiscal year relative to personal income for the fiscal year (calculated by averaging personal income for the 2001 and 2002 calendar years). Thus the data I used to come up with the ranking exclude revenue from the federal government. We rank no. 23 when we include the District of Columbia, and 22nd when we exclude DC."

I also asked about the impact of the amendment on federal revenue, to which he responded:

"Some of the federal revenue we get comes in the form of matching grants, Mediciad being by far the biggest example. If total government revenue is subject to a limit, it seems highly probable that one way we will live within that limit is to reduce the size of our Medicaid program. This means that some of the 'optional' coverage that WI currently provides WI residents will be dropped. With every dollar of reduced spending on Medicaid, WI will forego about 60 cents of federal government revenue."

So it sounds like he did use data that considered only "WI sources" when getting his ranking, and there would be an impact on federal dollars under the amendment.

Rick Esenberg said...

Gee, when you look at the Legislatice Fiscal Bureau's calculation of state and local general revenue from "own sources"
(attachment 4 to the document you so helpfully provided), we are 14th per capita and 15th as a percentage of income and significantly above the national average for 2001-02.

I think someone still has some "splaining" to do. My sense is that you guys better toss Rechovsky under the bus. I don't think its going to get any better and it has already gotten pretty bad.