Whether it s elementary or secondary education, the university, technical colleges, social service programs or highways, Wisconsin spends more per capita than many other states. Usually, we re among the top ten or 15. A third explanation for our relatively high tax burden is a subtle one but one that, I believe, gets to the heart of the matter. Wisconsin state taxes are high because the state uses income and sales taxes to relieve local property taxes. In a very real sense, the business of state government is local government.
State taxes are high to keep local property taxes low.
And, in fact, a WTA study completed last fall showed that states with large amounts of aid to local government have higher state taxes. But the second part of this research surprised us. In states that generously aid local governments, property taxes are not necessarily lower. In fact, the WTA found that there was a limited relationship between the total amount of state aid or property tax relief paid, and the level of local property taxes. For example, over the past 26 years in Wisconsin, adjusting for inflation, for each dollar in new state aid to local government, property taxes fell only about 40-cents.