Lawmakers close in on Walker tax cut agreement

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By SCOTT BAUER
Associated Press

MADISON, Wis. (AP) — The Wisconsin Legislature’s budget committee has scheduled a vote for Wednesday on Gov. Scott Walker’s $504 million property and income tax cut plan, a signal that Republican senators may be nearing an agreement on the proposal.

The Assembly already passed it, but some moderate Republican senators wanted changes to reduce a projected shortfall in the next budget that would grow to about $807 million under Walker’s proposal.

Discussions have focused on moving about $100 million out of the state’s rainy day fund, which is like a savings account, into the general fund, or checking account, to reduce that projected shortfall.

Rep. John Nygren, the Republican co-chair of the Joint Finance Committee, said Tuesday that every indication he had was that the Senate was coalescing around making that change, which he likened to an “inside baseball” accounting move.

“We knew all along we were going to get there,” Nygren said. “Sometimes it takes some people a little longer.”

A spokesman for Republican Senate Majority Leader Scott Fitzgerald said the compromise would be worked out by the Joint Finance Committee on Wednesday. The meeting was scheduled “to keep the ball moving down the court on the tax cut proposal,” Fitzgerald spokesman Dan Romportl said.

Assembly Speaker Robin Vos, a Republican who has openly sparred with Fitzgerald on this issue and others in recent weeks, issued a conciliatory statement.

“I’m pleased to see the legislative process move forward,” Vos said. “I know that Sen. Fitzgerald and Senate Republicans want to pass the tax cuts, too. We look forward to working with them to get it done as quickly as possible.”

Sen. Alberta Darling, the other co-chair of the Joint Finance Committee, did not return a message.

Sen. Luther Olsen, a Republican member of the budget committee, said he didn’t know any details about any deal that may have been reached. But he confirmed that the talks had revolved around whether to reduce the projected shortfall or allow it to remain at $807 million.

That shortfall doesn’t account for any future revenue growth. Walker has argued that leaving it at $807 million, as his tax cut proposal does, is reasonable because if revenue grows at 10-year averages the state will collect $1.5 billion, more than enough to meet spending commitments.

Walker’s spokesman Tom Evenson said the governor continued to work with the Legislature on the tax cut bill.

Walker’s proposal would spend $406 million on lowering property taxes, by reducing the amount that technical colleges collect and replacing it with state money. It would save the owner of a median-valued home $131 on the bill that is mailed this December.

Walker also wants to cut income taxes by $98.6 million by reducing the lowest bracket from 4.4 percent to 4 percent. That would save the average worker $46 a year.

Another part of Walker’s plan, which his administration enacted and does not need legislative approval, updates income tax withholding brackets. 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.

Walker’s proposal also includes about $32 million in various other adjustments and income tax credits to ensure that high income earners who pay the alternative minimum tax still qualify.

Democrat Mary Burke, who is challenging Walker in the governor’s race, has criticized his tax cut proposal saying the state should do more to target tax cuts to the middle class, increase spending on worker training programs, reduce debt and address projected shortfalls in Medicaid and transportation funding.