Walker Talks Tax Cuts In State Of The State Address

With an election nearly a year away, Gov. Scott Walker used his State of the State address before the Legislature on Wednesday night to burnish his first-term achievements and outline his priorities over the next few months, including what to do with a projected multi-million-dollar budget surplus.

The governor’s remarks, which went on for nearly an hour, touched on a variety of topics — from health care, entitlement reform, a tuition freeze at the University of Wisconsin System and how to expand employment rolls in the state.

Walker said that he believes Wisconsin’s economy and the state government are now on the right path.

“We are turning things around. We are heading in the right direction. We are moving Wisconsin forward,” he said.

Several times during the speech, Walker sought to draw a contrast between his first term and that of his predecessor, Democratic Gov. Jim Doyle. Early in his speech, he said his administration had replaced “double-digit tax increases, billion-dollar deficits and major job loss” and replaced them with massive tax cuts, growing budget surpluses and significant job growth.”

“The economy is dramatically better and our finances are in great shape. Still, there is more work to be done,” he said.

The anticipated budget surplus and talk of tax cuts featured prominently in the governor’s address. Walker said that Legislative Fiscal Bureau confirmed that the state will have a projected $911 million budget surplus. He attributed this to state’s economic recovery and “good stewardship of the taxpayers’ money.”

He suggested that a portion of the new revenue go into the state’s rainy-day fund, but the remainder provide tax relief.

“What do you do with a surplus? Give it back to the people who earned it. It’s your money,” he said.

To give the money back, the governor is proposing cuts in property taxes, income taxes and changes in some paycheck withholdings. He said he wanted to lower property taxes by $406 million, which he said will mean typical homeowners will see a $101 reduction in their tax bill. He would also slash income taxes by $98.6 million, which he said will target relief to help the lowest income tax bracket. He said a family of four making $40,000 a year would see a savings of $58. He is also directing the state Department of Revenue to adjust withholdings for state incomes taxes by $322.6 million. He said that beginning in April, a family of four will see $57.90 more in their checks each month.

“As it has over the past few years, lowering the tax burden will contribute to a stronger economy and a better fiscal situation in the future,” he said.

Walker also outlined his economic vision, which he called a “blueprint for prosperity,” with a goal of “preserving our strong fiscal standing.” The plan includes a mix of tax cuts, changes in laws and regulations to help those starting businesses or seeking employment and investments in worker training.

He said that the state’s unemployment rate is now the lowest it has been since 2008, house sales are up nearly 11 percent and more than 100,000 jobs have been created over the past three years. Walker also said the state has been successful in luring new businesses to Wisconsin.

Wednesday’s speech was the fourth and final State of the State speech in Walker’s first term. The governor is widely expected to run for reelection later this year. His only announced challenger thus far is Democrat Mary Burke, a former Trek Bicycle executive.

Stay tuned to WPR for continuing coverage.