Wisconsin Assembly approves tax cut plan

The Wisconsin state Capitol in Madison is seen, Jan. 14, 2014.
The Wisconsin state Capitol in Madison is seen, Jan. 14, 2014.

MADISON, Wis. (AP) – Assembly Republicans put the finishing touches Tuesday on Gov. Scott Walker’s plan to devote a huge chunk of the state’s surplus to tax cuts, approving the proposal one last time before sending it to the governor to be signed.

Minority Democrats decried the plan as a token gesture, arguing it doesn’t provide any real relief for average homeowners and workers. Republicans brushed off the complaints.

“What a great day,” Assembly Speaker Robin Vos, R-Burlington. “That’s money that can help expand the economy. That’s money that can expand Wisconsin. That’s money that can help (people) get back to work.”

Walker issued a statement thanking the Assembly.

“The hardworking taxpayers in Wisconsin are the big winners today,” the governor said.

The bill calls for using the state’s projected $977 million surplus to cover property and income tax cuts. The measure would send $406 million to technical colleges to reduce their property tax hit and cut income taxes by $98.6 million. The changes would translate to a $131 reduction on a median-valued home’s property tax bill this December and save the average worker $46 in annual income taxes.

The Assembly passed the bill in February but the measure bogged down in the Senate. Rob Cowles, R-Green Bay, balked at the plan out of concerns it would increase a projected shortfall in the next state budget to $807 million.

Republicans hold an 18-15 edge in the Senate, but moderate Dale Schultz, R-Richland Center, doesn’t support the bill because it would enlarge the deficit. That made Cowles the key vote.

Republicans on the Legislature’s budget committee came up with a compromise to placate him, putting $118 million into the state’s general fund rather than its rainy day account, requiring state agencies to return $38 million to the general fund and dropping language creating $7.5 million in sales tax exemptions for construction companies.

The revisions shrunk the budget shortfall by $156 million and won Cowles’ vote. Senate Democrats railed against the bill for three hours during debate in that chamber, ripping the bill as an election-year gimmick. Walker faces re-election in November; cutting taxes would give him a powerful talking point on the campaign trail and win points with conservatives.

But with Cowles on board Senate Republicans passed the measure 17-15 and sent it back to the Assembly to approve the revisions. Both chambers must pass identical legislation before it can go to Walker’s desk.

Debate in the Assembly was surprisingly brief. Vos and Rep. Jim Steineke, R-Kaukauna, were the only two Republicans who spoke out about the bill. Steineke acknowledged that the cuts won’t save people hundreds of dollars, but “it does start us back in the right direction of lowering property taxes.”

Democrats shook their heads.

“To say $100, a few cents, is enough, is ludicrous, honestly,” said Rep. Brett Hulsey, D-Madison.

They offered the same alternative plan that they did in February, calling for putting more money into the rainy day fund, increasing the property tax cut to up the average savings per homeowner to $231 and nearly tripling money for job training.

Republicans rejected the option and ultimately passed the bill on a 61-35 vote. Three Democrats – Stephen Smith of Shell Lake, Nick Milroy of South Range and Amy Sue Vruwink of Milladore – joined with Republicans in supporting the bill.

Walker this week signed a Republican bill that would spend more than $35 million from the surplus on worker training grants for technical colleges. That measure had broad bipartisan support.

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