EXECUTIVE BRANCH

ture. Because it is such a long period, state budgeting is a very complicated
task and this explains in part why the passage of a state budget is one of the
most difficult, time-consuming tasks to face any Legislature.
How big is the Wisconsin executive budget? For the 1965-67 biennium,
the total executive budget of Wisconsin state government was $2,572.6 mil-
lion-a far cry from the $840 million shown in the newspaper headlines
when the "general fund executive budget" was passed. The $2.6 billion in-
cluded $884,220,900 in general purpose revenue appropriations, $234,666,-
900 in state program revenue appropriations, $234,666,900 received by the
state from the federal government, and $549,410,000 in taxes collected by
state government to be shared with the localities. Up to this point, all ap-
propriations are from the General Fund. The total Wisconsin state budget
for 1965-67 also included $438,561,100 in anticipated expenditures from
the segregated Highway Fund, and $32,716,000 in expenditures from the
segregated Conservation Fund. In addition, during the 1965-67 biennium
the State of Wisconsin handled $210,417,000 in cash flow through the mis-
cellaneous segregated funds.
State Taxes. The Wisconsin Constitution, in the somewhat quaint lan-
guage of the 1840's, nevertheless unmistakably directs that our state must
operate under a balanced budget: The legislature shall provide for an annual
tax sufficient to defray the estimated expenses of the state for each year ...
In practice, the Wisconsin Legislature of the 1960's does not provide for a
single "annual tax" to pay for the programs to be undertaken during that
year-the programs of state government are on a biennial basis and continue
from biennium to biennium, and so do the taxes to pay for them. Thus, the
goal of keeping state income the equal of state outgo-no more, no less-is a
extremely difficult task.
The concept of an "annual tax sufficient to defray the estimated expenses
of the state" was based on the property tax, then the mainstay of govern-
mental revenue. The Legislature adopted a spending program, the Secretary
of State notified each county of its proportionate share of the cost of the
state program, and the property taxpayers paid up-whether current personal
incomes were high or low made little difference because the people expected
little in the form of governmental services and the costs were low. But, as
the public's appetite for governmental services increased, so did the revenue
needs of government. Gradually, the property tax lost its overwhelming im-
portance as a source of revenue for state government.
Ideally, if the Legislature authorizes expenditures of $1,000 million for a
biennium to pay for state programs, the various taxes levied by the Legisla-
ture to pay for these programs should yield $1,000 million for the biennium.
In practice they do not. The main sources of revenue for the modern state
government of Wisconsin are the income tax, the sales tax, and motor vehi-
cle taxes. All of them have fluctuating revenue yields, depending on the cur-
rent health of our state's economy.
The income tax is most susceptible to such fluctuations. When the econ-
omy is expanding with full employment and high wages, people not only pay
income taxes but, because they fall into higher brackets, actually pay a pro-
portionately larger share of their incomes to the state in the form of taxes.
When the economy is depressed, many people will be without income and
thus pay no income tax at all, while those who are still employed probably
fall into lower brackets and pay taxes at a lower rate. As a result, the yield
of the income tax is reduced even more steeply than personal income.
The sales tax does not fluctuate quite as much. Be the buyer millionaire or
pauper, the rate of the tax is the same. On the other hand, the yields of the
Wisconsin sales tax also follow the economy. People will buy more items,

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