Monday, July 04, 2005

Wisconsin's dilemma: Short-term budget fix vs. long-term investment in the production of information workers

Here in my current home state of Wisconsin, the two houses of the Republican-controlled State Legislature are wrangling with their budget proposal for 2005-2007 (the state budgets in two-year blocks) and it appears that once again, the University of Wisconsin System -- including the flagship research university UW-Madison which employs me -- will take a hit. From a recent report in the Wisconsin State Journal:

As passed by the Assembly, the budget would give the UW System about $1 billion in each of the next two years, or about $9 million more than the state currently provides.

But System officials say they really face a budget hole of about $90 million after factoring in new items requested by lawmakers and projected increased costs for things such as debt payments, utilities and health insurance.

The Senate amendment would increase that gap to $130 million. The Senate's budget would provide about $30 million less to the UW System in 2005-07 than it received in the current two-year budget.

Compare these priorities to the ones set by the Wisconsin Technology Council (a public/private partnership which advises state government on growing the high-tech economy in Wisconsin) in its May 2005 report entitled "Human Capital and Brain Power in the Wisconsin Economy: Shaping the New Wisconsin Economy"

Wisconsin continues to trail the U.S in terms of college-educated in the workforce. In 2004, 25.6 percent, or about 906,240 Wisconsin residents had earned at least a bachelor's degree as compared to 27.7 percent of the U.S. population. Wisconsin has increased its college-educated percentage of the workforce in every year since 2000 but the rate of growth is not enough to close the gap with the national averages.


Below average numbers of college graduates is an area of concern. One only has to look to neighboring Minnesota to find a state that has 20 percent more colleges graduates in its workforce and per capita income that is nearly $4,000 higher. That economic equation is compelling and should provide a clear path for Wisconsin’s future actions.

I am surprised that this statistic putting Wisconsin's college graduate population below that of the general US population isn't the first talking point off of every state politician's lips. Instead, vague accustions about how Wisconsin is the "highest taxed state in the nation" serve as the sound bite of political currency. Yet policy organizations that actually analyze the tax system on the basis of social justice, such as the Center on Wisconsin Strategy, report that the problem is not one of overtaxation, but of regressive taxation:

COWS recently released a national report explaining exactly “Who Pays?” taxes in Wisconsin. Going beyond rhetoric and simplistic state-by-state tax comparisons, the report details the “incidence” of taxation in each state – in other words, how much of a person’s income is paid in taxes, broken down by different income groups. The report was produced by the Institute on Taxation and Economic Policy, a national leader on fiscal issues and frequent collaborator with COWS. The results of the report, which revealed how Wisconsin’s poor pay more in taxes as a percent of their income than the wealthiest in the state, generated significant media attention and public concern.

Education, on the other hand, is a progressive action -- a proven vehicle for class mobility. Wisconsin is doing an adequate job, measured against the rest of the nation, of producing high-school graduates. But in the 21st century I believe the currency of the good life in the global information economy is now a college education -- one focused not just on technology, but on multicultural diversity, social equity, and critical thinking. Defund the state university system and you abandon these important social goals -- and the citizens who wish to reach them.

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