On Wednesday, AB-386 was recommended for passage in a 7-3 vote and lawmakers also recommended in a 6-4 vote approval of a constitutional amendment proposal. (Screenshot from Wiseye)
The Assembly Ways and Means committee recommended passage of Republicans’ almost $3 billion tax cut plan and a proposed constitutional amendment that would require a two-thirds majority in the Senate and Assembly to pass any tax increases during an executive session on Wednesday.
The proposals were introduced by Republican lawmakers last week in a rejection of Gov. Tony Evers’ calls to allocate additional funds to child care and education priorities during a special session scheduled for later this month. Wisconsin still has a projected $4 billion surplus after Evers vetoed a similar tax proposal by Republicans during the budget process. Republicans’ new tax plan quickly received a public hearing.
On Wednesday, AB-386 was recommended for passage in a 7-3 vote. Rep. Tod Ohnstad (D-Kenosha) joined Republicans on the committee in favor.
The bill would lower the state’s third income tax bracket — which includes single filers making between $27,630 and $304,170 and joint filers making between $36,840 to $405,550— from 5.3% to 4.4%. It would also eliminate the state income tax for retirees in Wisconsin for single filers with up to $150,000 for joint filers and $100,000 for single filers.
According to a Legislative Fiscal Bureau memo, the bill would reduce income tax collections in Wisconsin by $1.5 billion in 2023-24 fiscal year and $1.4 billion in 2024-25.
Rep. Sue Conley (D-Janesville), who voted against recommending passage, raised concerns about how the tax cuts could affect the financial stability of Wisconsin in the future.
“This came before us very quickly. I still have a lot of questions,” Conley said. “We have the money today, but I don’t have the confidence that we’re going to have the money in three years.”
Gov. Tony Evers said on Wednesday that he would veto the Republican tax plan if it makes it to his desk.
“I’m not going to sign an irresponsible Republican tax cut that jeopardizes our state’s financial stability well into the future and the investments we need to be making today to address the real, pressing challenges facing our state,” Evers wrote on Twitter.
Republicans lawmakers also recommended in a 6-4 vote approval of a constitutional amendment proposal that would require a supermajority vote from both chambers of the Legislature to approve any future tax increases.
Ohnstad, who voted for the tax cut bill but against the proposed constitutional amendment, said the latter resolution could give him pause in supporting AB 386 when it gets to the floor of the Assembly.
“If in fact, some time in the future, we find ourselves with the structural deficit that we may indeed have as a result of [AB] 386, it’s going to make it very much harder or impossible to perhaps rectify that,” Ohnstad said. “It’ll also be part of my consideration as we move forward on Tuesday. ”
If passed by the Legislature, the proposed constitutional amendment would need to be approved a second time in the next legislative session and then ratified by voters in a statewide election to become law.
The Assembly is expected to be in session next week.
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