Tags: County Report
June 24, 2014 | 03:51 PMDemography is destiny.
Todd Berry, president of the Wisconsin Taxpayer Alliance, presented members of the Walworth County Economic Development Alliance with some stark figures that show the state will be on the slow end of population growth over the next 35 years.
Berry was the featured speaker at WCEDA’s monthly breakfast meeting on Friday.
Meanwhile, the population within the state will trend toward older ages, as the baby boomers push past retirement into the Social Security years.
The nonprofit Wisconsin Taxpayers Alliance usually concerns itself with levys, rates and budgets.
Berry said delving into population and census data is not the alliance’s usual line of research.
“It’s a different issue for the alliance,” Berry told the 25 or so who gathered for the meeting.
However, larger populations usually mean larger economies, he said. And population growth, or the lack of it, will impact tax revenues for the state and local governments.
“When you look back, you can see a tight link between population growth and the economy,” Berry said.
Essentially, graphs showing economic growth and contraction usually follow the same general trends as population growth and contraction, he said.
“Wisconsin is on the cusp of an unprecedented period of workplace change,” Berry said.
Wisconsin is projected to be on the slow end of population growth, Berry warned.
According to information provided by Berry, demographers estimate that between 2010 and 2040 Wisconsin’s population will increase by 14.5 percent. By comparison, Wisconsin’s population grew 14.5 percent between 1992 and 2010. So, it will take another 30 years to match the population growth of the previous 18 years.
The state’s population makeup will also shift dramatically.
Persons 65 and older will increase from 13.7 percent of the state’s population in 2010 to 23.7 percent in 2040, Berry said.
In 2010, Wisconsin had 23 seniors for every 100 workers, in 2040, that ratio will be 45 to 100, according to The Wisconsin Taxpayer, the alliance’s magazine.
Some good news is that Walworth is expected to experience moderate growth between now and 2030 (under 10 percent) along with 17 other counties, including Milwaukee, Dane, Rock and Waukesha counties. The big gainers will be St. Croix, Sauk, Brown and Kenosha counties, according to taxpayer alliance figures.
St. Croix and Kenosha counties are on the borders with Minnesota and Illinois respectively, and are expected to gain in-migration as population leaves the heavily urbanized areas of Minneapolis and Chicago.
Sauk and Brown counties have young populations and they are also expecting some in-migration from surrounding counties that are projected to lose population.
While Wisconsin’s population challenge has been known for nearly a decade, the political debate has frozen around jobs.
“In our office, we’ve been very frustrated listening to the political dialogue in the state,” Berry said.
Both sides of the aisle are cherry picking facts to make their points, when the picture is more complex than that, he said.
“We have all the politicos fighting over jobs,” said Berry. “You can create jobs ‘til the cows come home, but if they all pay $4 an hour, you haven’t accomplished much.”
And you can’t fill jobs if you don’t have people, he said.
“To paraphrase Barbra Streisand, ‘People, we’ll need people,’” Berry said.
Berry gave some background on the state’s economic trends.
Wisconsin’s economy pretty much follows the national economy, he said. Wisconsin tends to go into recession before the rest of the country, and it tends to come out of recession before most of the country.
However, compared to the national economy, Wisconsin’s economy has been underperforming since 2001.
Part of that trend started more than 30 years ago, when the state suffered through two recessions, both which were worse for the state than the more recent Great Recession of 2008.
“One-seventh of the manufacturing jobs were lost and 100,000 people left the state,” Berry said. He said it was an emigration that the state had never experienced before.
While Wisconsin has since made up the raw number of people who left, it has not been able to make up the impact those people would have had if they hadn’t left the state’s economy, Berry said.
Wisconsin is not going to grow out of this alone.
The predictor of future population, the statewide schools census, has remained nearly flat since 1997, Barry said. And that’s deceptive, since the state initiated incentives for schools to create 4-year-old kindergartens.
As the population ages and more leave the workforce than nter it, fewer will be buying houses, and more people will be buying things that are exempt from state sales taxes.
There will be labor shortages. Household formation will go down.
Consumer behavior will change.
And it will affect tax revenues.
If the workforce isn’t growing and consumer behavior is changing, it will mean that sales, income and property tax revenues probably won’t grow, either, Berry said.
Dave Bretl, Walworth County administrator, asked Berry what local governments can do to compensate for the coming reduction in local tax collections.
Berry said that the state has pretty much frozen its income tax distributions to local governments.
“It appears local governments are responding by doing two things,” said Berry.
“There are incentives for local governments to borrow. Or, they look for ways to end run the tax system, and implement user fees.”
Berry said there are opportunities for creating efficiencies through consolidation. That may face some resistance, he added.
“People give up their local authority with great reluctance in this state,” he said.
Berry is also an advocate of giving more local control to cities, villages and towns. If counties wish to dissolve and leave local control to municipalities, they should have the ability to do that, he said.
In the meantime, Berry offered some direct, personal and tongue-in-cheek advice:
“Think of ways to get your kids to stay in Wisconsin and be very smart,” he said.