Assembly Republicans’ plan for a middle-class tax cut would be paid for out of an expected $588 million surplus.
But a spokeswoman for Gov. Tony Evers said the plan unveiled Thursday “falls short” of what he proposed because it would use one-time funds.
Assembly Speaker Robin Vos said while his caucus was focused on finding “common ground,” Republicans won’t agree to Evers’ call to cap the manufacturing and agricultural credit to pay for his version of a middle-class income tax cut.
“We want to give that money back to the taxpayers,” said Vos, R-Rochester. “That’s why there is no need to raise taxes on anybody in Wisconsin, especially those who are in agriculture and manufacturing.”
The Assembly GOP proposal — which is slated to begin in tax year 2020 — would increase the standard deduction for Wisconsinites making less than $100,000 year.
According to the Legislative Fiscal Bureau, the proposal would cut individual tax collections by an estimated $338 million annually once it kicks in. The full impact for 2019-21 would be $490.2 million.
Vos said the proposal would be introduced as a standalone bill rather than added to the budget.
On the campaign trail, Evers called for an income tax cut of 10 percent for individuals making up to $100,000 and families with incomes of up to $150,000. His campaign estimated the tax cut would reach about 86 percent of filers with a price tag of $340 million.
To pay for it, Evers proposed applying the manufacturing and ag credit only to the first $300,000 of income. The campaign said that would retain a credit of about $40 million out of the $334 million estimate for 2018-19. It also said about 70 percent of beneficiaries made $300,000 or less.
Evers spokeswoman Melissa Baldauff said she was encouraged that Republicans were willing to work with the guv on tax cuts but hoped it could be accomplished without “adding to the deficit or relying on one-time funds.”
“Between this unfunded proposal, their refusal to accept federal funds to expand Medicaid, and growing legal fees for outside counsel to defend their lame-duck laws, Republicans are willing to leave taxpayers on the hook for hundreds of millions of dollars,” she said.
In the Senate, Majority Leader Scott Fitzgerald, R-Juneau, said he is assigning three of his GOP members — Dale Kooyenga, of Brookfield; Howard Marklein, of Spring Green; and Duey Stroebel, of Saukville — to work with Assembly Republicans “to deliver tax relief for hard-working families.”
Meanwhile, Senate Democratic Leader Jennifer Shilling, D-La Crosse, called the proposal a “gimmick” that would hit the state’s coffers hard and “prevents us from expanding opportunities for students.”
Assembly Republicans announced the plan via a half-dozen coordinated news conferences around the state, often using similar language.
During the Wausau stop, for example, Rep. Scott Krug, R-Nekoosa, said the Assembly GOP proposal proves Republicans and Evers can work together on issues where they have common ground. And Rep. Bob Kulp, R-Stratford, said it’s the “wrong time” to raise taxes on farmers.
“It sets the stage for the rest of the session,” Krug said of the Assembly GOP plan. “I think that’s the most important thing here today is that we are going to find ways to work together.”