Despite various bipartisan disagreements, Gov. Scott Walker’s $505 million income and property tax-cut plan has passed out of committee and is headed for the Assembly floor this week.
The tax cut proposal, also known as the “Blueprint for Prosperity,” was initially announced by Walker in his State of the State address and seeks to return roughly $800 million of the $912 million projected state surplus back to taxpayers in a series of tax cuts.
The bill is likely to be heard in a special session on Tuesday, said Kit Beyer, spokesperson for Assembly Speaker Robin Vos, R-Rochester.
Democrats have proposed an alternative plan, saying that the current tax cut proposal is irresponsible, as it could potentially increase the state’s structural deficit.
That alternative, introduced by Minority Leader Peter Barca, D-Kenosha, includes a $200 million deposit to the state’s rainy day fund, tripling the funding for job training and tax relief aimed mainly at the middle class.
Minority Leader Chris Larson, D-Milwaukee, said he is concerned about the changes to the Wisconsin Alternative Minimum tax included in the proposal, which he said would give Wisconsin’s richest people the “lion’s share” of the tax cut.
Under the proposed cuts, Wisconsin’s wealthiest 5 percent of taxpayers will receive 18 percent of the proposed tax cuts, while the bottom 40 percent of citizens will receive 15 percent, according to a Legislative Fiscal Bureau memo.
“Cutting the bottom income bracket is good, but there are other pieces of the bill where the Republicans couldn’t help themselves and the rich get the biggest break,” Larson said. “The richest of the rich in our state have been clamoring for this for a while.”
Senate Majority Leader Scott Fitzgerald, R-Juneau, is pushing for some changes to the bill to ensure the tax cuts do not negatively affect the state’s budget in the future. Fitzgerald has suggested keeping the proposed $100 million intended for the rainy day fund in the state’s main account, which Walker and Assembly leaders have said they are willing to consider, the Milwaukee Journal Sentinel reported.
Beyer said Vos would like to see the money go toward the state’s rainy day fund.
“The speaker would prefer to have money put into the rainy day fund as the governor proposed, but if it comes to the point where these cuts will not be passed without those changes made it’s an idea he’d be willing to entertain at that point,” she said.
With the bill as it is, the average homeowner will receive $101 back on their property taxes and members of the lowest income tax bracket on average will receive $58, according to Walker’s website.
“It’s something the Republicans are committed to passing. It will be the third [tax cut] this session and it’s already proven to help stir our economy,” Beyer said.
According to the article, Walker said he was willing to work with the Legislature to come to a compromise.
“Whether you do it through the balance through the rainy day fund or other ways, in the end we’re setting it aside for the future,” Walker told the Journal Sentinel.