MILWAUKEE (AP) – Democratic gubernatorial candidate Mary Burke accused Republican Gov. Scott Walker on Monday of being too quick to spend a projected state surplus, expressing concern that the money would not actually materialize.
The nonpartisan Legislative Fiscal Bureau announced last month that it expected Wisconsin to have a $977 million budget surplus by mid-2015 thanks to larger-than-anticipated tax collections. Walker has proposed using the money to cut income and property taxes by about $500 million total. The Assembly is expected to vote on his plan Tuesday.
But Burke said recent volatility in the stock market made her question whether the surplus would develop as anticipated. Last year was a good year for the stock market, but the first few weeks of this year haven’t been as good, she said, adding that the market influences income tax collections and spending, which affects sales tax revenues.
“We have seen in just five weeks of this year is how … volatile the stock market is, how quickly those rosy projections can go the other way,” she said. “That is why I find Gov. Walker’s proposal irresponsible. He is spending money we don’t have.”
Walker’s plan includes a $406 million property tax cut and a $98 million income tax reduction. The owner of a median-valued home would save $131 in property taxes, while the average income tax bill would be $46 less this year.
Some lawmakers in both parties have expressed reservations the tax cuts because they would increase by $100 million a projected shortfall for the budget that begins in mid-2015. The shortfall, however, is based on current spending commitments and doesn’t account for higher tax collections.
Burke said the potential shortfall also concerned her and she would devote half of any surplus to paying down existing debt and building up the state’s rainy day fund. She would use the rest to reduce property taxes and provide jobs training.
Unlike Walker, Burke said she would not seek an overall property tax cut but would instead boost the state’s first dollar tax credit, which is split equally among property owners. Burke said the tax credit would do more to help the middle class and not give big property owners an advantage.
Walker’s campaign spokesman, Jonathan Wetzel, declined to comment on that claim. He issued a statement accusing Burke of helping create “budgets that raised taxes, raised spending, and raised deficits” under former Gov. Jim Doyle.
Burke served as Doyle’s Commerce Department secretary for nearly three years, from January 2005 until November 2007.