Assembly Republicans introduced a $250 million income tax cut plan Friday that would save Wisconsin taxpayers around $105 million annually, despite concerns from Democrats.
In dealing with the state’s $452 million in extra revenue, the tax cut would cost $250 million in 2020-’21 and an additional $224 million the next year.
Republicans said they would pay for the plan with a recent inflow of collected taxes. The Legislature’s nonpartisan budget office indicated the state could assume $818 million more in tax revenue than expected, according to Wisconsin Public Radio.
In addition, Republicans also listed a $45 million property tax cut for businesses and a $100 million cut toward student debt.
“Wisconsin’s strong economy is providing an opportunity to return these dollars to the hard-working taxpayers, said State Rep. Joan Ballweg, R-Markesan in a press release. “We’re also able to contribute more to our rainy day fund and pay down debt.”
Two million, or 64 percent of tax filers — individuals who are required to file an income tax return — would qualify for the tax cut. Individuals who report themselves as single would save about $106 while married couples would save $145 on average, according to the Wisconsin State Journal.
Married couples making in excess of $144,000 and individuals earning $120,000 in annual salary would be exempt from consideration.
“Wisconsin Republicans are once again putting taxpayers first," Senate Majority Leader Scott Fitzgerald, R-Juneau, said in a statement. “Our reforms have left the state with a massive surplus that belongs to the taxpayers.”
Friday’s proposal occurred a week after Gov. Tony Evers lobbied state legislatures to invest $250 million of surplus revenue to fund education — which would also reduce property taxes.
Evers said he wanted to spend the extra revenue on schools, but Republicans stated they would use the money for tax relief. The governor proposed a $1.4 billion increase in education spending in the last budget session, however Republicans knocked it down to a little over $550 million.
“Unfortunately, Assembly Republicans made it clear today that they would rather break their promise to the people of our state than work together on funding our schools and reducing property taxes in Wisconsin,” said Evers spokeswoman Britt Cudaback.
Republicans indicated they planned for the state to cover two-thirds of public schools' expenses. The most recent budget shows the state covering 65.5 percent of costs next year.
Assembly Minority Leader Gordon Hintz, D-Oshkosh, also described the tax cut plan as “a last-minute, hastily thrown together proposal” in a statement.
It remains unclear whether Evers will approve the plan.
Under state law, half of any unexpected revenue collected from taxes must go into the state’s “rainy day fund,” which accumulates funds to be used during emergencies. The fund’s projected balance at the end of the biennium, however, would be $956 million — less than the projected $1.08 billion if the plan does not pass, according to WPR.
The Legislative Budget Office predicts Wisconsin will end the biennium with a general balance of around $620 million.
The Joint Committee on Finance is expected to consider the proposal next week.
