As Wisconsin's bank account reaches $5 billion, Evers reveals tax cut plans

With new revenue figures likely to show Wisconsin will have nearly $5 billion in the bank when the current state budget ends in 10 months, Governor Evers gave a plan today that would give back some of those funds.

With his administration projecting a more than $5 billion surplus by mid-'23, @GovEvers releases new call to cut taxes, repeal the minimum markup on gas and cap insulin copays.

See the release:https://t.co/ZGbzari4GM

See more in today's PM Update.

— JR Ross (@jrrosswrites) August 23, 2022

The biggest component of the package is a $441 million cut starting in fiscal year 2022-23. It would impact single filers with adjusted gross incomes at or below $100,000 and married joint filers at or below $150,000. It would phase out for both classes of filers, with a cutoff of $120,000 for individuals and $175,000 for married couples. Evers’ office estimated the impact at $221 per year for individuals and $375 annually for the median family of four.

In reading the Evers Administration’s press release on the plan, this is being presented as a “10% tax cut”. Based on that and the fact that it eventually phases out, I would guess it’s some kind of added standard deduction over a drop in rates.

This is geared toward upper-middle, middle and lower-class taxpayers, while those in higher income levels get nothing. That’s in contrast to the tax cut that was part of the last state budget, which didn’t even kick in until single filers made $24,250 and married joint filers made $32,330, and gave more benefits to those that made higher incomes.

I have concerns over any permanent income tax cuts, because it ties your hands if/when things get tougher at later times. But with $5 billion in the bank, there’s a whole lot of cushion to handle a $441 million decline in revenues in every year.

Evers’ plan also has a number of other targeted tax breaks for families and lower-income Wisconsinites. Here’s the summary from WisPolitics.

*increasing the income limit for the Homestead Credit to $35,000 from current law of $24,680. The call also would restore indexing income cutoffs for claimants.

*expanding eligibility for the Veterans and Surviving Spouses Property Tax Credit by including those with a disability rating of at least 70 percent instead of the current law of 100 percent. The impact would be $16 million.

*creating a caregiver tax credit for expenses incurred while caring for a loved one, with an impact of $100 million.

*expanding the Child and Dependent Care Credit to 100 percent of the federal credit from the current 50 percent, with an estimated impact of $30 million.

The expanded Homestead Credit and caregiver tax credit have been called for by Evers in past budgets, but the gerrymandered GOP Legislature has refused to sign off on them. There’s also another item that Evers wants to bring back from his first budget that would reduce prices at the pump for Wisconsinites.

The governor’s plan targets the rising cost of gas by repealing the state’s minimum markup law for motor fuel, which requires gas to be marked up from cost. Recently, the cost of this markup has been costing Wisconsin drivers an additional 18 to nearly 30 cents. With changes under the governor’s plan, gas stations could immediately drop prices by removing this markup, which latest estimates put at nearly 30 cents.

Republicans turned down an Evers plan to remove the minimum markup law when it was matched with an 8-cent-a-gallon gas tax increase in 2019. But it doesn’t look like Evers is asking for any type of change in the gas tax in this package, so that takes away one excuse GOPs might give to avoid getting rid of the 9.18% minimum markup.

I don’t see Evers calling for a special session yet, so this is likely an election-year statement to make the case to Wisconsin voters (and it’s a good stunt to pull). But it’s possible Evers could call for a special session once the revenue figures are finalized in the coming days.

And I would recommend Evers call that special session. Not just on this, but also to fund staff to speed the processing of nursing licenses and related applications at the Department of Safety and Public Services (DSPS) (I talked about that issue in this post from yesterday).

Make Robbin’ Vos and Devin LeMaheiu and the rest of the WisGOPs be seen doing their “gavel-in/gavel-out” routine in a time closer to an election when more people are watching. And point out that the GOPs aren't offering ANYTHING in response. Then reiterate that the only way a lot of these good things do get done is to elect Evers and other Democrats. It's an easy case to make.