June 13, 3:30p
(WPR)---Republicans on the Legislature’s Joint Finance Committee voted along party lines Thursday to pass a two-year state budget that rejected many of Gov. Tony Evers' top priorities, saying their plan lives within the state's means while increasing funds for schools and roads.
Republicans also voted Thursday for plans that would cut taxes on the average taxpayer by about $75 in the 2019 tax year and $136 in 2020, which would amount to a $457.6 million income tax cut overall.
The GOP plan is substantially smaller than Evers' $833.6 million income tax cut, which the Legislative Fiscal Bureau estimated would have cut taxes for the average taxpayer by about $216 per year.
But Evers would have increased taxes on manufacturers and capital gains for the wealthiest residents to offset his plan, a move Republicans have said repeatedly they won't support.
"We can do the tax cut without losing our priorities," said Sen. Alberta Darling, R-River Hills. "I think that’s really important."
The GOP income tax cut was based not only on changes to the budget but also on a separate bill that changes the way the state collects taxes from online retailers. If the bill becomes law, the state would collect sales taxes from more online retailers than it does currently. That sales tax revenue would be used to reduce income taxes.
The combined effect of all the GOP income tax changes would be aimed most directly at the lowest two income tax brackets.
Right now, the lowest income tax bracket pays a 4 percent tax rate, which would drop to 3.76 percent in the 2020 tax year. The second lowest tax rate, which is currently 5.84 percent, would drop to 5.21 percent in 2020.
The GOP plan would also use the Lottery Tax Credit to reduce property taxes by about $59 million.
But Democrats said Republicans were protecting Wisconsin's "privileged elite" by blocking other parts of Evers' budget.
One provision of Evers' budget would have scaled back a tax credit for manufacturers while another would have scaled back a state tax break for capital gains. The moves would have generated more than $1 billion in new revenue combined.
"(Evers') priority is fair taxation. His priority is targeting tax relief to the low- and middle-income people who need it the most," said Rep. Chris Taylor, D-Madison.
"He doesn't give it to the people who don't need it and you do," Taylor said. "You favor the people who don't need it."
The GOP tax motion also rejected Evers' plan to create a new child care tax credit, which would have saved parents roughly $10 million per year.
Republicans did vote to increase taxes on e-cigarettes by $0.05 per milliliter of liquid, a tax increase that is $5.5 million larger than current law but $29.2 million smaller than Evers wanted.
The tax cut plan still needs to pass the Assembly and the Senate before it heads to the governor's desk.
Editor's note: This story will be updated.
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