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Walker open to ‘tweaks’ to tax cut plan (UPDATE)

Associated Press

Gov. Scott Walker says he is open to making tweaks to his property and income tax cut plan on Wednesday, Feb. 5, 2014, in Madison, Wis. Senate Republicans are discussing possible changes to the tax cuts, while the Assembly is moving ahead with a vote on Walker's proposal as introduced. (AP Photo/Scott Bauer)

Gov. Scott Walker says he is open to making tweaks to his property and income tax cut plan on Wednesday. Senate Republicans are discussing possible changes to the tax cuts, while the Assembly is moving ahead with a vote on Walker’s proposal as introduced. (AP Photo/Scott Bauer)

MADISON, Wis. (AP) — Gov. Scott Walker said Wednesday he is open to making “tweaks” to his half-billion dollar tax cut proposal as Senate Republicans continue closed-door discussions about changes they want to see to the plan.

The negotiations between Walker and Senate Republicans are happening even as the Assembly, also controlled by Republicans, pushes ahead with the $504 million tax cut bill as introduced. An Assembly committee held a hearing on it Wednesday, with a vote scheduled for Thursday, setting the stage for the full Assembly to take it up next week.

But Republican Senate Majority Leader Scott Fitzgerald said he wouldn’t be pressured by the Assembly moving ahead while some of his members push for changes. And he disagreed with Assembly Speaker Robin Vos’s decision to hold hearings on the bills before there’s an agreement in the Senate that can be taken to the Legislature’s budget committee.

Typically, the Joint Finance Committee would hold a hearing and vote on the bill before either the Assembly or Senate would take it up. But Vos was so anxious for the package to move forward, he scheduled public hearings this week so the full Assembly could take it up on Tuesday.

“We want to pass the governor’s plan as soon as possible so as to return these dollars to the taxpayers,” Vos said in a statement. “We’re not going to wait for the Senate when tax cuts are a top priority for Assembly Republicans.”

Walker met with both Vos and Fitzgerald on Wednesday to discuss the tax cut. His spokesman Tom Evenson said Walker remained confident after the meeting that the majority of a new $912 million surplus would be devoted to tax cuts.

Walker, speaking to reporters before the meeting, didn’t go into specifics about what changes to his tax cut proposal he might support.

“I haven’t had any negotiations in terms of numbers,” he said.

Fitzgerald said Republican senators discussed the plan at length on Tuesday night and there are still concerns about increasing the size of the state’s structural deficit by $100 million. Several ideas were floated, including reducing the $406 million property tax cut and increasing the $98 million income tax cut, but no consensus emerged, Fitzgerald said.

“There’s a million different ways to squeeze a balloon,” Fitzgerald said. “That’s kind of where we are now.”

Senators were largely on board with the property tax cut and were debating the size of the income tax cut and how much money to set aside in the state’s rainy day fund, Fitzgerald said.

The tax cut is made possible by a budget surplus that’s $912 million more than originally estimated.

Democrats on the Assembly’s Committee on Jobs, Economy and Mining that heard the tax cut bill Wednesday questioned whether more of the money should be saved in case positive economic forecasts don’t pan out.

Democrats also questioned why some of the surplus wasn’t used to fill areas that have been cut in recent years, including Medicaid.

Revenue Department Secretary Rick Chandler defended the governor’s plan, saying the cuts were targeted to help all homeowners and anyone with an income tax liability.

The owner of a median-valued $151,000 home would save $131 in property taxes under Walker’s plan. The governor also proposed cutting the lowest income tax bracket from 4.4 percent to 4 percent. The effect would be an average savings of $46 for all tax filers, or $55 for a married couple filing jointly.

Walker also is updating income tax withholding tables to put more money into paychecks starting in April, rather than having more it come back as a refund next year. The typical family of four is estimated to see $58 more in their paychecks starting in April, based on estimates by the state Department of Revenue.

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