Spend now, see returns later

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We haven't been shy about criticizing the Legislature's Joint Finance Committee for some of its boneheaded moves as it has plowed through the state budget in recent weeks.

But that doesn't mean it doesn't get some things right and that was certainly the case last week when it approved $11.8 million in additional spending. Yes, we know that doesn't seem a plausible way to try to resolve the state's climbing budget deficit - one which grew another $1.5 billion in recent weeks because of lower-than-expected tax collections - but it was.

That $11.8 million will be used to fill about 30 vacant auditor and tax collection agent jobs in the state Department of Revenue. In recent years, that department has lost positions, just as other state agencies have, as the governor and lawmakers tried to pare expenses.

Those spending cuts for the Department of Revenue had consequences: uncollected taxes rose and were headed past the $1 billion mark for the 2009-11 biennium.

With the new hires, that tax gap between what's owed and what's collected is expected to narrow. The Legislative Fiscal Bureau estimates the addition of auditors and tax collection staff will result in the collection of $70 million in additional revenue.

That's not a bad return on an $11.8 million investment.

If anything, that "spending" might still be on the miserly side. Earlier this year the nonprofit group Institute for Wisconsin's Future issued a report that said the state could "invest" $25 million in salaries and benefits for additional tax collectors, generating $200 million in additional collections.

The report noted that Minnesota increased its tax collection efforts by $100 million and hired 320 people over a seven-year period - and generated $900 million in revenue.

By that yardstick, the fresh spending for tax collectors here may not be enough.

Only about half the $1 billion in uncollected taxes is collectible, so there is a point of diminishing returns.

Still, this move by Joint Finance to collect what the state is owed is a step in the right direction. Every dollar of collections from scofflaws and tax avoiders lessens the pressure for service cuts or additional taxes on those who are already paying their share.

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