By TODD RICHMOND
MADISON, Wis. (AP) — The Legislature’s Republican-controlled finance committee finished revising Democratic Gov. Tony Evers’ state budget Thursday, wrapping up its work by inserting a $321 million income tax cut plan into the spending plan.
Evers had included an $833.6 million income tax cut in the budget, funded partly by all-but eliminating a tax credit program for manufacturers. Committee Republicans erased it in favor of their own proposal, frustrating Democrats on the panel.
“Gov. Evers tax proposal per year is more than twice the size of the Republican proposal,” Democratic state Rep. Evan Goyke said. “It’s smaller than the governor’s.”
Republican Rep. John Nygren, the committee’s co-chair, responded that the GOP is making cuts without raising taxes on manufacturers. They would cover the reductions through expected increases in state revenue.
The Republican plan calls for reducing the second-lowest income tax bracket by .63%, resulting in a $321.5 million cut. Taxpayers would see an average cut of $75 in tax year 2019 and $77 in tax year 2020.
Filers who make between $125,000 and $300,000 would see a $95 reduction, the biggest cut for any filers.
Republicans had floated plans for a $400 million tax cut earlier this week. The proposal they ultimately adopted Thursday is about $80 million short of that total.
But the plan also shifts about $60 million from the state’s general fund to increase property tax credits offered through the state lottery. The committee also was poised Thursday to adopt a separate bill that would require online vendors like Amazon to collect and remit sales taxes from third-party sellers in perpetuity and use the revenue to cover more reductions in the two lowest income tax brackets.
All told, Republicans said their actions Thursday will provide $536 million in total tax relief. The online vendor bill must pass the full Legislature and Evers must sign it into law before it can take effect, however.
Republicans also dumped an Evers proposal to prohibit businesses from using Wisconsin Economic Development Corp. tax credits, grants and loans to reduce net employment in Wisconsin or move jobs out of the state.
WEDC is in charge of job creation for Wisconsin and this year approved more than $3.1 billion a year in tax credits, grants, loans and bonds. Its handling of those awards, especially its tracking of companies in default, has been under scrutiny for years.
A state audit last month revealed that Madison-based medical diagnostics firm Exact Sciences Corp. received about $61,000 in tax credits for jobs created outside of Wisconsin. The audit also found that national retail chain Walgreens received $462,000 in tax credits even though it lost 17 jobs.
The budget goes next to the full Senate and Assembly. Both houses must pass an identical version of the spending plan before it can go back to Evers’ desk. The governor can sign the document into law as-is, veto the entire thing or use his partial veto powers to rewrite the document.
Other key provisions in the finance committee’s version of the budget include:
- $5 million to buy land and begin the bidding process for a new prison to replace the aging Green Bay Correctional Institution.
- $58 million in new money for the University of Wisconsin System. Lawmakers would have to approve how the system spends $45 million of that. Evers had proposed $150 million. The system would get about $1 billion for building projects. Evers wanted to give the system $1.1 billion.
- An additional $484 million for roadwork, generated through a mixture of cash from the state’s general fund, borrowing and higher fees for car titles and registration. Evers wanted to spend an additional $624 million on roads and raise the state’s gas tax by 8 cents a gallon to generate more long-term revenue for transportation needs. Republicans scrapped that idea.