Committee Approves Walker’s Sales Tax Holiday, Child Tax Credit

Democratic state lawmakers pushed back Wednesday on Gov. Scott Walker’s proposals for a one-time child tax credit and sales tax holiday.

“This whole thing to me seems like an election year gimmick — and I don’t even know if it’s going to pass the Senate,” said Rep. Mark Spreitzer, D-Beloit.

Lawmakers on an Assembly committee heard testimony and voted on the proposal Wednesday. It was approved on a party-line vote, with all Democrats on the committee voting against.

Republican lawmakers argued the proposals take advantage of a recently announced $137.5 million state budget surplus, which resulted from increased tax collections, and will spur economic activity in the state.

“If you can’t vote to give a surplus back when the economy is this strong, are you ever going to give money back or are you always going to just keep taking?” said Rep. Kevin Petersen, R-Waupaca.

Walker unveiled the child tax credit in his annual State of the State address last month, and announced the addition of the sales tax holiday last week alongside Assembly Republicans.

If the measure is approved by lawmakers, parents would be able to apply online for a $100 credit per child this spring. The credit would be paid out by Sept. 1.

The one-time credit is estimated to cost the state $122 million.

Rep. Melissa Sargent, D-Madison, expressed concern that the credit could only be claimed online.

“Broadband internet access is not something that we are doing well in the state of Wisconsin,” Sargent said.

Rep. Chris Taylor, D-Madison, pushed for the credit to be directed exclusively to low-income households.

“My big concern is getting more money in the hands of low- and middle-income families,” Taylor said. “I don’t think high-wage earners need more money back.”

The sales tax holiday would be held Aug. 4-5, and would apply to purchases up to $100. Some products would be excluded, including prepared food, candy, soft drinks, alcoholic beverages, cigarettes, tobacco products, and motor vehicles.

The Walker administration has estimated the sales tax holiday would cost the state about $50 million.

The bill has yet to be heard in a state Senate committee.

Senate Majority Leader Scott Fitzgerald, R-Juneau, told reporters earlier in the week that some senators are still uncertain about the sales tax holiday element of the proposal.

Walker said Wednesday he was unsure of the sales tax holiday’s future in the Legislature, but continued to call the child tax credit a high priority. Lawmakers could take up the measures individually, if they are split into separate bills.

“I think there’s a lot of appeal out in the public,” Walker said. “Whether or not we get that all through remains to be seen. But I think at a minimum our hope is that we’ll get a child tax credit so that families can get that $100 per child.”

Lawmakers have a handful of days scheduled in the upcoming weeks to vote on proposals. They are expected to complete the legislative session in March.