Evers announces tax cut proposal amid unprecedented state budget surplus

As he campaigns for reelection, Gov. Tony Evers proposed a tax cut plan Tuesday that would cut income taxes, cap the cost of insulin and provide more support for child care.

If approved, the plan would provide $600 million per year in tax relief, including a 10 percent income tax cut, amid an unprecedented state budget surplus.

But the plan would require approval from the Republican-controlled state Legislature which rejected a similar — but larger tax cut plan from Evers — just five months ago. Legislative leaders called that tax plan an election year gimmick.

On Twitter Tuesday, Republican Assembly Speaker Robin Vos blasted Evers for announcing what he called a campaign ploy. He said it meant to distract from the two-year anniversary of riots that damaged businesses in Kenosha.

But Evers called on lawmakers to consider the proposal anyway, asking them to “get money back to Wisconsinites.”

“I hear leaders on the other side of the aisle say that they want to give money back to taxpayers. But I’ve yet to see it,” Evers said at an event announcing the plan in Milwaukee. “Time and time again, I laid out plans to do just that, including some of these proposals I’m talking about today, and they’ve downright refused. So let’s put our money where our mouth is.”

Estimates from the Wisconsin Department of Revenue show the state will end the fiscal year with more than $5 billion in state coffers.

DOR Secretary Peter Barca said official projections will be released in the coming days, but estimates show the state is in “the best fiscal shape” it has been in decades.

“Our economists project that at the end of the next fiscal year — as the governor indicated — (our surplus) will be well over $5 billion. So we are in the strongest position we can be in,” Barca said Tuesday. “Therefore it’s just only right, and important in fact, to help the economy, to give this kind of help.”

Earlier this year, the nonpartisan Legislative Fiscal Bureau projected the state would end the biennium with a $3.8 billion revenue surplus. Evers’ tax cut plan would leave that balance untouched for the next biennial budget.

In total, the plan would:

• Provide a 10 percent income tax cut for single filers at or below $100,000 in annual adjusted gross income and married-joint filers at or below $150,000.
• Provide tax relief for low-income seniors on fixed incomes by increasing the income limit for the Homestead Credit and restoring indexing for inflation to preserve the credit’s value.
• Expand eligibility for the Veterans and Surviving Spouses Property Tax Credit to support veterans and their families to include those with a disability rating of at least 70 percent instead of the current law of 100 percent.
• Repeal the state’s minimum markup law for motor fuel, which requires gas to be marked up from cost. With changes under the governor’s plan, gas stations could immediately drop prices by removing this markup, which the latest estimates put at nearly 30 cents.
• Cap the cost-sharing of insulin at $35.
• Create a caregiver tax credit for qualified expenses incurred by a family caregiver while caring for their loved one.
• Expand the newly created Child and Dependent Care Credit from 50 percent of the federal credit to 100 percent.