After a season of spending, the Wisconsin Legislature is finally getting around to talking tax cuts. Perhaps Republicans have saved the best for last.
The Republican-controlled Joint Finance Committee put the finishing touches on a complete rewrite of Democrat Governor Tony Evers’ 2023-25 state budget proposal, passing a tax reform package that promises to deliver $3.5 billion in income tax cuts and nearly $800 million in property tax relief.
“For the second budget in a row, legislative Republicans are delivering the largest tax cut in state history. Every Wisconsinite will see a tax cut under the plan approved today,” said Senate Majority Leader Devin LeMahieu following passage of the final pieces of the biennial budget, which now heads to the floors of the Assembly and Senate next week.
Some fiscal hawks say it’s about time. Moon-eyed by a record projected $6.9 billion surplus, both Democrats and Republicans have been on spending binge this session.
Earlier this month, Evers, a tax-and-spend liberal, and Republican legislative leadership reached agreement on a hefty education spending bill and a massive boost in state shared revenue.
The education bill is seen as a big win for the state’s school choice movement, with voucher and charter school getting near the state funding parity they’ve long been seeking. Evers signed the bill earlier this week, eliciting rare praise from school choice advocates and Republican lawmakers who have had to deal with a teachers union-backed governor who has long been at war with Wisconsin’s parental choice programs.
In fact, Evers, who served as state superintendent of Public Instruction for a decade before occupying the Governor’s Mansion, took a lot of heat from the union, which saw his concessions as a betrayal.
Evers defended himself to some of his biggest campaign backers.
“What people forget is every time we have a budget for public schools, our money for charters or for vouchers goes up, too,” he said. “And so there’s almost nothing different this time than last time. We added a little bit more money in order to get this deal across the finish line.”
Not quite.
There’s a lot more money coming to choice schools, as much as $3,000 or more per student, according to the Legislative Fiscal Bureau.
But Evers got a lot in return. Too much, say some critics of the deal. DPI’s budget will receive a $1 billion bump for K through 12 public schools, including institutions that have repeatedly posted tragically low student performance. Those schools already are receiving record funding.
Cynics have said Evers knows he may not have to worry about the increased bill for voucher and charter schools. Later this summer, the Wisconsin Supreme Court will change from a conservative to a liberal majority (4-3) when newly elected Justice Janet Protasiewicz takes the bench. Protasiewicz, backed by the teachers unions, campaigned on her progressive “values,” suggesting settled law like the state’s school choice program is subject to review.
If the constitutional validity is raised — and chances are school choice opponents will raise the issue soon — the storied program could be imperilled by a liberal majority.
In Evers’ original budget proposal, he again sought to freeze enrollment in the state’s private school voucher programs.
Also this week, the governor signed a bipartisan shared revenue agreement that sends much more state taxpayer money to local governments and bails out Milwaukee and Milwaukee County after decades of questionable fiscal decisions. Both the county and the city will now have the ability to approve sales tax increases to stave off bankruptcy.
“It is our city’s opportunity to start over,” said State Senator LaTonya Johnson, a Milwaukee Democrat, at the bill signing.
It’s another billion dollars siphoned, this time from a portion of the state’s 5-cent sales tax revenue.
The JFC also this week approved what State Senator Dan Feyen (R-Fond du Lac) described as a “monumental” $344 million to raise the pay of state correctional officers. The starting wage for security personnel will increase to $33 an hour, with adjustments for current staff.
Feyen noted high vacancy rates among state correctional officers has made a tough job all the more dangerous.
The final two-year spending package is being tallied and subject to revisions. Republicans say the taxpayer bill could have been a lot higher. Evers had proposed a whopping $104 billion budget — the first time Wisconsin’s biennial spending plan has topped the $100 billion mark. The governor’s plan would have increased by 23 percent in the first year.
The JFC’s first order of business was to strip more than 500 items from the governor’s proposal — everything from a generous, taxpayer-funded family medical leave initiative to expanding Medicaid and legalizing marijuana.
While there was ambitious talk of flat taxes, even income tax elimination, Republicans ultimately agreed on a tax cut that collapse the state’s middle two income tax brackets into one, and lowers the rate for all three of the new brackets.
The plan calls for a total $3.5 billion income tax cut, with $795 million in property tax reductions, weighted toward middle-income earners.
Evers had proposed a 10 percent tax cut, excluding higher wage earners.
Democrats hate the Republican measure, asserting it takes critical money away from expanded government.
“Rather than funding essential services like child care, expanding BadgerCare, or implementing Paid Family and Medical Leave, Republicans on the Joint Finance Committee decided to give a tax break benefitting the richest people in our state,” Senate Democratic Leader Melissa Agard (D-Madison) huffed. “As Wisconsin sits on a historic budget surplus, we could be supporting working families with needed investments in programs that strengthen our workforce and make Wisconsin a place where people want to live, work, and play. Republicans continue to squander opportunities that will help retain and attract people to our great state.
State Senator Mary Felzkowski (R-Tomahawk), a member of the budget-writing committee, disagrees.
“This tax cut shows our commitment to making Wisconsin an appealing state to call home, and I will always vote to keep more hard-earned money in my constituents’ pockets, where it rightfully belongs – not in the hands of Madison bureaucrats.”
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M.D. Kittle is the National Political Editor for The Star News Network.
Photo “Tony Evers” by Tony Evers. Background Photo “Wisconsin State Capitol” by Basharat Alam Shah. CC BY 2.0.
Bravo WI