GOP eyeing tax cut as they prepare to gut Evers’ plan

A photo of the Wisconsin and American flags flying outside of the State Capitol
Photo by Logan Rude

MADISON, Wis. (AP) — Republicans who head the Legislature’s budget committee told Wisconsin’s business leaders on Wednesday that they are optimistic a tax cut will be a part of the next two-year spending plan, although they said details on what type and how much were still being discussed.

Discussion of a tax cut comes as the budget committee plans on Thursday to cut hundreds of Gov. Tony Evers’ proposals from the budget, including $1 billion in tax increases largely on capital gains and manufacturing income. Republicans also plan to turn away Medicaid expansion, which would mean the state would lose out on $1.6 billion over two years in federal money to replace what the state would pay to offer BadgerCare Plus insurance to about 90,000 more low-income people.

All told, with one vote Republicans will be cutting $3.4 billion from the Evers proposal, according to the Legislature’s nonpartisan Legislative Fiscal Bureau. The Republican spending plan will be built from the current budget, passed two years ago, rather than what Evers proposed in February.

The committee co-chairs, Sen. Howard Marklein and Rep. Mark Born, told a virtual meeting of Wisconsin Manufacturers and Commerce on Wednesday that they were optimistic given strong revenue projections that there will be room for a tax cut in the next budget.

“I expect that we’re going to be talking about some kind of a tax cut at some point,” Marklein said. “I don’t know what that looks like yet. I think that’s going to be on the table given our strong financial position.”

Born said the goal will be to pass a budget that invests in the state’s priorities and also cuts taxes.

Democratic Rep. Evan Goyke, a member of the budget-writing Joint Finance Committee, said cutting taxes would be much easier if Republicans would accept Medicaid expansion and the $1.6 billion that comes with it.

“You say no to that money and all of a sudden you make the pie a lot smaller,” Goyke said in an interview.

By not expanding Medicaid, the tax cut will have to be smaller than it could be and possibly result in cutting funding in other priority areas like the University of Wisconsin System and K-12 schools, Goyke said.

Thursday’s meeting of the budget committee will be the first where it takes votes on the two-year spending plan that runs from July through mid-2023. The full Legislature will likely vote on the budget in June or July, and then Evers can make significant changes with his broad veto power.

Other Evers proposals that Republicans planned to kill Thursday included legalizing and taxing marijuana; raising the minimum wage to $10.15 per hour by 2024; restoring public workers’ collective bargaining rights that were lost in the Act 10 law; suspending enrollment in the private school voucher program; and creating a so-called red flag law that would allow guns to be seized from people deemed to be a danger by courts.