Wisconsin Republicans plan $400 million income tax cut

June 11, 2019


Wisconsin Gov. Tony Evers stands outside the state Capitol to announce a new partnership designed to increase insurance enrollment on Monday, June 3, 2019, in Madison, Wis. Evers also says he won't rule out accepting a transportation funding plan that doesn't have a gas tax increase.

MADISON Republicans are working on a roughly $400 million middle class tax cut to be unveiled as soon as Tuesday, a third attempt to find an income tax cut that both the GOP and Democratic Gov. Tony Evers can agree to.

Evers vetoed a Republican-passed income tax cut bill earlier this year and Republicans have rejected his 10% income tax cut proposal because it would increase taxes on manufacturers to pay for it.

There were few details Monday about how the latest tax cut being eyed by Republicans would be paid for or how it would affect the average taxpayer. The Wisconsin State Journal first reported on the plans based on a brief interview with Republican Senate Majority Leader Scott Fitzgerald during which he only talked about the total size of the cut.

Fitzgerald's spokesman Alec Zimmerman said he could not provide any additional details.

Assembly Speaker Robin Vos, in a statement, said Republicans looked forward to enacting a middle class tax cut that can survive an Evers veto. He called cutting income taxes a "bipartisan goal."

Earlier this year Evers vetoed a Republican proposal that cut income taxes about $340 million a year. Evers objected to paying for it with budget reserves and expected revenue growth.

Evers, in his state budget that's pending before the Legislature, called for cutting income taxes by about $415 million a year, a 10% reduction. He was largely paying for it by all-but eliminated a manufacturing tax cut program created and supported by Republicans.

With that approach dead in the GOP-controlled Legislature, Republicans instead were working on another approach to include in the budget the Joint Finance Committee was working to complete this week. The full Legislature must pass it, as soon as late June, before it would go to Evers for his consideration.

Evers spokeswoman Melissa Baldauff said the GOP plan wouldn't go as far as the governor's to help the middle class.

"The governor's sustainable plan puts the needs of farmers and working families first, while Republicans are fighting to protect millionaires," she said.

Fitzgerald said the tax cut envisioned would be similar to the one Assembly Republicans proposed in January. That bill would have cut taxes for the average filer about $170 a year. The Evers proposal would have cut taxes on average about $225 for every filer.

The budget committee is also making final decisions in a variety of other areas, most notably how much to spend on building projects around the state. Evers requested $2.5 billion, including about $1.1 billion for University of Wisconsin System projects.

Fitzgerald told the State Journal that funding for the UW System's building projects was the largest capital budget item still in flux.

"We've got to determine what our tolerance is," he said.

University leaders have been calling on lawmakers to pay for needed upgrades and repairs, saying investments are needed to address dilapidated buildings.

GOP leader promises more tax cuts than increases

MADISON, Wis. Total tax cuts in the Republican version of the state budget will be greater than all of the increases, including those for vehicle titles and registration, Assembly Speaker Robin Vos said on Tuesday.

Vos also warned Democratic Gov. Tony Evers that if he vetoes the entire budget spending on areas such as health care and transportation will only decrease in subsequent proposals.

"I want to make sure that everybody in Wisconsin knows that we have a budget that should get adopted and hopefully Democrats will feel the pressure," Vos told reporters during a break from budget negotiations with fellow Republicans. "I mean, they've been doing pressure on Republicans to support an expansion of welfare. And they should have pressure put on them to support a budget that funds health care, funds our schools, funds our roads."

Under the Republican budget, funding would increase for K-12 schools and the University of Wisconsin System, but not by as much as Evers proposed. Republicans rejected Evers' plan to expand Medicaid, which would have leveraged $1.6 billion in federal money and saved the state $324 million over two years. The GOP road-funding plan relied on higher fees, additional borrowing and some cash, instead of raising the gas tax as Evers wanted.

The GOP-controlled budget committee planned to finish its work this week, sending the budget to the full Legislature which is expected to take it up the last week of June. The committee planned to vote Tuesday on how much to spend on government and UW building projects, along with a host of other budget items.

Republicans are eying a roughly $400 million middle class income tax cut but have not released details about how it would be paid for or what it would mean for the average taxpayer. The budget committee planned to vote on that Thursday.

Evers and Republicans have been at odds since even before the governor took office. Republicans called a lame-duck session to weaken his powers and neither side has shown a willingness to give on any significant items in the budget.

Evers has powerful partial veto powers, which he can use to craft the Republican-approved budget into something more palatable to Democrats. But he also hasn't ruled out vetoing the entire budget, which would require both sides to start from scratch.

Vos, speaking after an appearance at a Wisconsin Health News event, said Republicans wouldn't take any budget-related action in the summer, waiting instead until October to attempt override votes. Republicans would need to convince Democrats to vote with them to be able to override any veto.

Wisconsin's current budget runs through June 30. If there is no deal enacted by July 1, there would not be a government shutdown like occurred at the federal level and in other states. Instead, in Wisconsin current funding levels continue until there is a new budget enacted.


Associated Press