Battle of the taxes

    Gov. Tony Evers gets sparse applause from the Republican side of the aisle during his State of the State address. Photo by Melanie Conklin
    Gov. Tony Evers gets sparse applause from the Republican side of the aisle during his State of the State address. Photo by Melanie Conklin

    Split along party lines, the state Senate and the Assembly on Thursday passed a Republican measure eliminating the personal property business tax for manufacturers and raising the standard deduction on income taxes.

    The measure, SB-821, also directs $100 million to pay down state debt.

    Voting 19-14, the Senate acted in a last-minute extended session early Thursday morning after a parliamentary maneuver had postponed the vote overnight from its Wednesday floor session, where lawmakers had debated the tax bills for 45 minutes. 

    The Assembly passed it 65-34 later on Thursday.

    Assembly speaker Robin Vos (R-Rochester) and Senate Majority Leader Scott Fitzgerald (R-Juneau) introduced the bill, along with its Assembly companion, AB-910, just one week ago.

    The bill adds manufacturers to an existing exemption from local business property taxes, with the state reimbursing local governments for lost revenue from the tax. It also increases the maximum income tax standard deduction. A Legislative Fiscal Bureau memo estimates single taxpayers and heads of households with incomes up to $120,360 would save on average $106; married couples filing jointly with incomes up to $144,669 would save on average $145. 

    The memo estimates that the standard deduction increase would reduce income tax revenues for the state by $214.5 million a year.

    The bill was prompted by a recent state projection that showed Wisconsin tax revenues were on track to take in $452 million more than budgeted. In response to that projection, Gov. Tony Evers proposed increasing general aid to local school districts by $130 million and aid for special education by $79.1 million, and in doing so, decreasing the property tax burden The Legislature’s Republican leaders never took up the Evers legislation.

    In Wednesday’s floor session, Senate Democrats criticized the Republicans for rushing the bill and ignoring the governor’s proposal to help local school districts, then forced a postponement on the vote to Thursday morning.

    Another parliamentary maneuver Thursday gave Sen. Tim Carpenter (D-Milwaukee) another shot at criticizing the Republican leaders’ handling of the bill.

    “It seems right out the Republicans are running rampant,” Carpenter said. “There’s no discussions with the governor, there’s no ability to try and compromise on things.”

    In a statement issued after the Senate adjourned Thursday, Fitzgerald said: “I am thrilled that we were able to pass both an income tax cut for hard-working Wisconsin families and a tax cut for the businesses of our state.” Crediting the Republicans with “continuing to trim the size of government while returning money to the taxpayers,” Fitzgerald added: “I am hopeful that the governor will carefully examine this tax cut, like he told me he would when we met this week.”

    Evers’ office referred reporters to a spokesperson’s Twitter feed, which stated, “The governor told @SenFitzgerald he’ll be as open to Republicans’ tax bill as Republicans have been about passing his education plan.”

    With the Assembly’s concurrence, the bill now goes to Evers for his consideration. Carpenter Thursday predicted Evers would veto the measure, and the governor has often said bipartisanship is a criterion he uses in choosing whether to sign legislation.

    Evers also signaled his displeasure with the bill on social media late Wednesday, Tweeting, “I know there are Republicans concerned about the high price tag of their own unsustainable tax bill that shortchanges our rainy day fund. My plan invests in our kids and property tax relief. There’s still time to do the right thing.”

    Erik Gunn
    Senior Reporter Erik Gunn reports and writes on work and the economy, along with related subjects, for the Wisconsin Examiner. He spent 24 years as a freelance writer for Milwaukee Magazine, Isthmus, The Progressive, BNA Inc., and other publications, winning awards for investigative reporting, feature writing, beat coverage, business writing, and commentary. An East Coast native, he previously covered labor for The Milwaukee Journal after reporting for newspapers in upstate New York and northern Illinois. He's a graduate of Beloit College (English Comp.) and the Columbia School of Journalism. Off hours he is the Examiner's resident Springsteen and Jackson Browne fanboy and model railroad nerd.