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Wisconsin’s chief economist: jobs, lower tax burden and rising data‑center demand reshape state outlook
Summary
John Koskinen, chief economist at the Wisconsin Department of Revenue, told Muskego’s State of the City audience that Wisconsin’s competitiveness has improved, employment and business formation rose in 2024, and large data‑center investment is increasing electricity demand — with potential reliability concerns after 2028.
John Koskinen, chief economist for the Wisconsin Department of Revenue, presented statewide economic trends at the Muskego Area Chamber of Commerce event, reporting stronger employment, rising business formation and a declining state and local tax burden compared with recent decades.
“Bottom line up front, Wisconsin has substantially improved its competitiveness,” Koskinen said, citing a 4.4% increase in Wisconsin real GDP in the third quarter, a 3% unemployment rate and an increase of roughly 32,000 residents employed in-state compared with a year earlier. He said entrepreneurship expanded in 2024, with the number of private establishments growing across most counties.
Koskinen noted the state’s tax changes and fiscal policy have reduced the state and local tax burden to its lowest level in 40 years and, by some measures, below the U.S. average. He described changes including reductions in individual income tax rates and the elimination of personal property taxes for many businesses; the latter, Koskinen said, improved Wisconsin’s business tax ranking.
Housing affordability was a significant topic: Koskinen said mortgage payments have risen sharply since 2021 and that some counties have moved from “green” to less-affordable ratings on Federal Reserve affordability metrics. He also reported an increase in housing construction permits and that Wisconsin is issuing more building permits than neighboring Minnesota or Illinois in the recent period.
On industry and investment, Koskinen said manufacturing employment and construction employment were rising and pointed to a pipeline of roughly $4.8 billion in planned manufacturing investment. He highlighted a wave of data-center proposals and projects — Microsoft in Racine, projects in Kenosha and Wood counties, and other developers — and warned that modern data centers require very large, continuous power draws. “Any modern data center requires about 350 megawatts worth of power,” Koskinen said in the presentation, and he summarized regional reliability forecasts that show potential shortfalls beginning about 2028 without additional generation or transmission capacity.
Koskinen also fielded audience questions about state policies referenced in the presentation (Act 12 and Act 10 were discussed in audience Q&A about shared revenue and public-employee reforms), the energy implications of data centers, and youth labor participation. He said youth and prime‑age labor-force participation in Wisconsin are comparatively high and that the state’s cost of living is below the U.S. average — a factor in household purchasing power after adjusting incomes for cost of living.
Ending: Koskinen closed with a short forecast of steady growth into 2026, unemployment near 3%, and slowing wage growth as labor shortages ease; he made his slide deck available to the chamber for distribution.
