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Evers Proposes $600 Million in Tax Cuts; Suggests Projected Budget Surplus Has Grown to Over $5 Billion
By Wisconsin School Administrators Alliance staff | August 23, 2022
From WisPolitics.com . . .
Gov. Tony Evers, two months out from his reelection bid, called for using a portion of the state’s projected $5 billion surplus to cut taxes by $600 million a year.
The plan also includes a call to repeal the minimum markup on fuel and cap at $35 the co-pay an insurer could charge for insulin.
Evers said the state Department of Revenue will release a new projection in the coming days that will put the state’s budget surplus by mid-2023 at more than $5 billion, up from previous projections of $3.8 billion. (emphasis added)
The new tax cut call comes after Republicans earlier this year rejected Evers’ proposal to give tax rebates of $150 per person, calling it an election year gimmick. GOP leaders have said they want to use the projected surplus for a tax package in the 2023-25 budget.
At an event in Milwaukee, Evers argued there was no reason for the state to continue holding onto the money rather than returning it to taxpayers.
“I know leaders on the other side of the aisle say that they want to give taxpayers money back for tax breaks, but I have yet to see it,” Evers said.
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.
The plan also calls for:
- 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.
Evers’ proposal to repeal the state’s minimum markup law on fuel comes as Republicans have hit the guv for a past proposal to couple ending the Depression-era law with an increase in the gas tax. The law requires stations to set their prices at least 9.18 percent over what they pay for it wholesale.
Evers in January proposed a $1.7 billion package that included the $150 per-person rebates and other proposals such as the income tax credit for caregivers that the guv called for today.
That package included $749 million for education to keep the state in compliance with federal rules to qualify for COVID-19 aid directed to K-12 schools. Those rules require states to maintain the proportion of their spending on K-12 and higher ed to qualify for the aid.
Today’s proposal doesn’t include any additional funding for education. The guv’s office said that’s because the package of tax cuts wouldn’t impact the maintenance of effort requirements imposed by the federal government.
See the release here.
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