Walker expects bipartisan support for tax cuts
- Article by: SCOTT BAUER
- Associated Press
- January 23, 2014 - 4:30 PM
MADISON, Wis. — Gov. Scott Walker said Thursday that increasing the state's projected budget shortfall will not be a deal breaker for his proposed half billion-dollar tax cut plan, even though some Republican senators have raised concerns about it.
Walker said he expects his $504 million property and income tax cut plan to pass with bipartisan support, even though Democrats have been quick to criticize it and some Republican senators have said they want to see changes.
Republicans are zeroing in on the fact that the plan would increase the state's projected shortfall heading into the 2015 budget from about $700 million to $800 million. That shortfall, however, does not take into account any revenue growth, which Walker expects to more than cover the difference.
"One or two people have raised the concern," Walker said in response to questions following a speech at a meeting of the Wisconsin Grocers Association. "I don't think that it's a deal breaker."
Walker outlined his "Blueprint for Prosperity" in his State of the State speech on Wednesday night and then touted it across Wisconsin, making stops Thursday in La Crosse, Madison, De Pere and Hurley.
The tax cuts are made possible by $912 million in revenue above previous projections. Walker argued that the money ought to be returned to taxpayers.
"The budget surplus is really your money," he said at the grocers meeting. "You earned it."
But in the Senate, where Republicans have a narrow 18-15 majority, some lawmakers are questioning raising the state's projected shortfall by cutting taxes as much as Walker wants. Many Republicans campaigned on the fact that in 2011 they eliminated a projected $3.6 billion shortfall. Walker used that shortfall as the reason to effectively eliminate public worker unions, while also increasing how much they had to pay for their pension and health care benefits.
That fight led to Walker and 13 state senators having to face recall elections in 2011 and 2012. One of those who survived a recall, Sen. Luther Olsen, R-Ripon, is among those concerned about growing the budget deficit to about $800 million.
"In essence we campaigned on a balanced budget," Olsen said. "What's interesting is this isn't increased spending. Some people say this is great, we're denying the treasury. But that means there's less money for schools and everything else."
Even with those concerns, Olsen said he expected Walker to largely get what he wants.
"Everybody talks a big game at the beginning and at the end we come together, compromise, and get something passed because we know we're not going to do nothing," he said.
Assembly Speaker Robin Vos said he expects Walker's tax cut proposal to pass largely in the same form as it was introduced.
Walker's plan would amount to an income and property tax savings of about $150 for the typical family of four that owns a home. Walker unveiled a website, www.prosperity.wi.gov, where taxpayers can get an estimate of how much they will receive back.
Democrats, including Walker's challenger for re-election Mary Burke, criticized the plan for increasing the state's projected shortfall, not doing enough to reduce current debt levels and not being targeted to help the middle class.
Burke said Thursday that Walker's proposals don't do enough to create jobs or help people in the middle class. She said Walker, who said the state's economy was rebounding, is out of touch with the struggles of workers.
"It's a little bit like Walker sitting in a luxury box at Lambeau Field in January knowing how people feel in the stands," said Burke, a former state Commerce Department secretary and Trek Bicycle Corp. executive.
Burke said it was too soon to know whether the improved revenue forecast will come true, so Walker should be cautious in spending so much on tax cuts. Burke said the state should have no structural deficit.
The proposed $406 million property tax cut would be done by replacing a portion of taxes collected locally by technical colleges with money from the state. That approach won support Thursday from leaders of the technical college system.
The proposed income tax cut would reduce the lowest tax bracket from 4.4 percent to 4 percent, a move Walker argued would help the middle class as it reduces taxes on the first $10,910 earned by individuals. The tax savings would be between $44 and $58 a month, depending on the person's tax filing status.
Additionally, Walker is also adjusting income tax withholding tables to return more money in paychecks rather than have the state hold on to it and return it as a tax refund. That would equate to savings of about $58 a month for the typical family of four.
© 2014 Star Tribune