Wisconsin”s share of government jobs is not out of proportion to other states, challenging the idea that the state is a high tax-and-spend state, a new study by researchers at the UW-Madison and UW-Oshkosh reveals.
Research by economist Steven Deller, of the College’s Department of Agricultural and Applied Economics, and UW-Oshkosh political scientist Craig Maher found that in 2001 Wisconsin had about 10.9 percent of total employment in state and local government, below the national average of 11.4 percent.
That ranked Wisconsin 29th nationally in public-sector employment, and was in line with neighboring states – ranking below Iowa”s 11.7 percent and Michigan”s 11.3 percent, but slightly above Minnesota”s 10.6 percent and Illinois” 10.2 percent.
Between 1979 and 2001, Wisconsin”s total employment grew 38.4 percent, while public-sector employment alone grew 33 percent. From a national perspective, Wisconsin ranked 29th in terms of total employment growth and 33rd in public-sector employment growth.
The study comes at a time when lawmakers and citizens are debating the merits of a so-called Taxpayers Bill of Rights, a state constitutional change that would limit taxes by imposing a rigid formula.
“We maintain that if Wisconsin is indeed a high-tax state, then Wisconsin public-sector employment should be disproportionately large,” the study states. “Compared to the other 49 U.S. states, Wisconsin is not disproportionately dependent upon the public sector as measured by employment.”
Historically, Deller and Maher documented a drop in public-sector employment as a percentage of total employment.
Between 1979 and 2001, the study found that state government employment as a percentage of total employment fell 24.3 percent, the fourth largest decline in the nation. Meanwhile, local government employment as a share of total employment rose 6 percent, larger than a national average that saw a decline of 1.9 percent.
In 2001, state government employment accounted for 2.8 percent of total employment, ranking Wisconsin 39th nationally, and significantly below the national average.
Local government accounted for 8.1 percent of total employment, slightly above the average and ranks Wisconsin 22nd. That, Maher and Deller say, is attributable to the state”s heavy commitment to K-12 education.
Instead of focusing on comparing tax burdens between states, Deller and Maher argue that if Wisconsin were a high tax-and-spend state, it would be reflected in government-employment levels.
“It does not appear that the relative growth of the public sector in Wisconsin is out of proportion with the rest of the U.S.,” the study found. “Indeed, the data suggests that the growth in the public sector is below the national average.”
Deller and Maher also broke down public-sector employment into 32 categories, and found that Wisconsin experienced a slower rate of employment growth in 19 categories between 1993 and 2003.
“We see that there has been significant disinvestment in certain categories, such as parks and recreational services, natural resource protection and promotion, housing and community development, solid-waste management and sewerage disposal,” the study states.
Maher and Deller also found that there was a disinvestment in higher education during the period. While higher education instructors increased 14.2 percent national, Wisconsin experienced a 1 percent decline.
In April, another study by UW-Madison economist Andrew Reschovsky also challenged proponents of the tax amendment and maintained that TABOR could undermine Wisconsin”s quality of life.
The text of Deller and Maher”s study can be downloaded (PDF).