Budget Committee Approves $2 Billion Tax Cut, UW Funding

Wisconsin State Capitol. Photo by Dave Reid.

The Joint Finance Committee approved a package of Republican bills Wednesday that would cut taxes by about $2 billion and uphold the Legislature’s part in a deal with the University of Wisconsin System.

Voting 11-4 along party lines, the committee approved four bills that would provide an income tax cut, a retiree tax cut, an increased child care tax credit and a cut for married filers.

AB-1020 would cut taxes for some middle-class earners by expanding the state’s second-lowest income tax bracket, 4.4%, to include single earners making up to $112,500 and joint earners making up to $150,000.

During the meeting, Rep. Tip McGuire (D-Kenosha) criticized the bill for mostly helping those making over $100,000.

According to the Legislative Fiscal Bureau (LFB), earners making over $100,000 would represent 40.4% of the tax earners included in the cut. Those filers would receive 73.6% of the estimated tax savings.

“I know that in our conversation about this that this was stated to be intended to focus on helping people afford things, and while I’m sure that those families could always use a little bit more money, I think that the fact that this is a disproportionate share of the tax cut going to families that are doing a little bit better, or even better than that, is certainly disappointing,” McGuire said.

McGuire added that he thought it was a risk that the total package of bills could take the state’s budget surplus, currently projected at about $3 billion, and “turn it into a deadly deficit.”

The second bill, AB-1021, would exempt retirees from having to pay state income taxes on the first $75,000 of their retirement income for single taxpayers and the first $150,000 for joint filers.

AB-1022 would increase the state income tax credit granted to married filers. The final bill, AB-1023 would increase the size of the state child and dependent care tax credit to 100% of the federal credit.

Several Republican lawmakers on the committee said they believed that money needed to be returned to taxpayers. Sen. Howard Marklein (R-Spring Green) also said, again, that the bill was tailored to appease Democratic Gov. Tony Evers’ requests that cuts focus on middle class Wisconsinites.

The committee’s vote sets the package up to be voted on by the full Assembly next week.

Republicans have pointed out that there are four bills that Evers could pick from. Evers hasn’t committed to signing any of them.

“I can’t make that judgment. I don’t know what it looks like. Any number of things could be put into those bills that I will not like, but we’ll take a look,” Evers told CBS58 on Wednesday. “Appeasement is good, but I have not seen the whole bill.”

The committee also advanced bills that will ensure tuition reciprocity between Minnesota and Wisconsin and another bill that dedicates funding to several infrastructure projects at UW campuses. Republicans agreed to pass the bills under a deal reached between the Legislature and the UW System on funding and diversity, equity and inclusion.

“Nobody should be taking a victory lap on this,” Sen. Kelda Roys (D-Madison) said during the meeting. “This is evidence of how broken and dysfunctional the Legislature is. We could have and should have done this during the budget, this last year. We actually should have done it in the previous budget three years ago.”

Two bills — AB-140 and AB-920 — that implement and fund tuition reciprocity between Wisconsin and Minnesota, an agreement that allows Wisconsin residents to attend Minnesota public universities at in-state tuition rates and vice versa, were approved unanimously.

AB-921, which authorizes several UW infrastructure projects, including the construction of a new engineering building at UW-Madison and certain demolition projects throughout the UW System, was also approved unanimously. The bill authorizes $423 million to be transferred for the projects.

Budget committee approves tax cut package and UW funding bills was originally published by Wisconsin Examiner.