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Senate passes governor’s tax cuts (UPDATE)

Associated Press

MADISON, Wis. (AP) — Wisconsin Republicans moved closer to making Gov. Scott Walker’s plan to use the state’s surplus to cover $504 million in tax cuts reality Tuesday, pushing the measure through the state Senate despite Democrats’ complaints the proposal is just a token election-year ploy.

The bill now heads to a final vote in the state Assembly. That chamber has already passed the measure but must agree with changes the Legislature’s budget committee made to win a key senator’s vote. Assembly Republicans have scheduled a vote for March 18. Passage is all but certain. The bill would then go to Walker.

“The hardworking taxpayers of Wisconsin know how to spend their money better than politicians in Madison do,” Walker said in a statement. “I look forward to the Assembly’s vote and to signing this property and income tax relief into law.”

Senate Republicans praised themselves as debate on the bill began, saying they led Wisconsin out of the recession and improved the state’s finances enough to enable the governor to make the cuts.

“This is a great day for taxpayers,” Senate Majority Leader Scott Fitzgerald, R-Juneau, said as debate began on the measure. “Many of us should be able to go home and talk to our constituents and say ‘I think I’ve been a good steward of the state’s finances.'”

Minority Democrats countered that the package is really just a campaign gimmick.

“In the end it’s not really going to help anybody except maybe the governor in a campaign commercial,” Sen. Jon Erpenbach, D-Middleton, said. “Middle-class people need a break. They’re not going to get it with this.”

Walker, who faces re-election in November, has proposed using the state’s projected $977 million surplus to fund property and income tax cuts. He introduced a bill in January that would send $406 million to technical colleges to reduce their property tax hit and cut income taxes by $98.6 million by slicing the lowest bracket from 4.4 percent to 4 percent. The changes would translate to a $131 reduction on a median-valued home’s property tax bill this December and $46 in annual income tax savings for the average worker.

Assembly Republicans passed the measure last month, 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 control the Senate 18-15, but they needed Cowles because moderate Sen. Dale Schultz, R-Richland Center, wouldn’t support the plan. Schultz, too, felt it would exacerbate the deficit.

Republicans on the Joint Finance Committee came up with a compromise two weeks ago to please Cowles, putting $118 million in the state’s general fund rather than the rainy day account, requiring state agencies to return $38 million to the general fund during the fiscal year that begins July 1, 2015, and dropping a provision creating $7.5 million in sales tax exemptions for construction companies. The revisions reduced the budget shortfall by $156 million.

Senate Democrats railed against the bill for three hours. They offered a number of alternative ways to spend the surplus, including eliminating the projected deficit; creating $500 million in one-time property tax relief; providing free tuition for students at technical colleges and University of Wisconsin two-year campuses; covering debt on building projects; and providing tax deductions for college expenses.

The Republicans voted down all the Democrats’ ideas. They rejected the notion that Walker’s bill is a veiled campaign strategy.

“Cutting taxes is what we do,” Sen. Glenn Grothman, R-West Bend, said.

In the end the measure passed 17-15. Cowles voted for it; Schultz voted with all 14 of the chamber’s Democrats against it.

Walker also introduced another bill that would use about $35 million from the surplus to fund new Department of Workforce Development job training grants, including grants to eliminate technical college waiting lists for high-demand fields, help high school students get job training for high-demand jobs and help the disabled find work.

The Assembly passed that bill last week. The Senate followed suit Tuesday, approving it unanimously. That measure now goes to Walker for his signature.

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