Assembly advances $2.1 billion tax cut targeting middle income and retired filers

MADISON — The state Assembly voted Tuesday to advance a $2.1 billion package that would lower taxes for middle-income earners, parents, married couples and retirees, but Democratic Gov. Tony Evers is noncommital on supporting it.

The four Republican bills would significantly expand the state's second-lowest tax bracket to include more than 1 million Wisconsin residents earning between $19,000 and $150,000 per year, exempt up to $75,000 of retirees' income and expand tax credits for married filers and filers with children.

The Assembly voted 62-34, on party lines, to pass the tax bracket adjustment and the credit expansion for married filers. The credit expansion for filers with children passed with a 92-4 vote.

Reps. LaKeshia Myers, D-Milwaukee, and Katrina Shankand, D-Stevens Point, joined Republicans in voting for the retirement income tax exemption. Shankland is running to represent the state's 3rd Congressional District and Myers is running to fill the recently vacated 4th state Senate District.

The Senate has not yet scheduled a vote, but Senate Majority Leader Devin LeMahieu, R-Oostburg, told reporters last week he expects the chamber to act on the bills soon.

"We have talked about using the surplus for literally almost a year, making sure we give it back to the taxpayers of Wisconsin," Assembly Speaker Robin Vos, R-Rochester, told reporters ahead of the vote. "We all know this is not money that's to be spent expanding government; it's overpayments by the citizens of Wisconsin. And the plan that we have today is going to send the vast majority of that back."

In a Sunday appearance on WISN-TV's "Upfront," Evers indicated he might be willing to sign some of the bills into law.

"I've been through all of them. I'm going to go through them again. I'm sure there's some we'd agree on," Evers said.

Democratic lawmakers had mixed reactions to the bills passed Tuesday. Several of the bills "miss the mark," said Assembly Minority Leader Greta Neubauer, D-Racine.

But Neubauer praised legislation that would expand the state's child and dependent tax credit as "a start," adding that more work is needed to address challenges looming over the child care industry. Lawmakers should fund aid for child care providers and pass a paid family and medical leave plan, she said.

"One thing I know that we can all agree on is that Wisconsintes deserve to keep a little more of their hard-earned money in their pockets, and people and communities across the state that are having a hard time making ends meet deserve our serious consideration," Neubauer said.

Rep. Tip McGuire, D-Kenosha, voiced concerns that the package would set the state up for a budget deficit in the future.

The proposals' Republican authors have said the bills are designed to make Wisconsin a more attractive place to live for families, low- and middle-income earners and retirees. Democratic lawmakers have questioned whether the bills are the best way to accomplish those goals.

Altogether, the measures would cost $2.1 billion in the 2024-25 fiscal year and $1.4 billion every year afterward, according to a nonpartisan analysis from the Legislative Fiscal Bureau. The measures would reduce the state's total income tax revenue by $2 billion per year in fiscal 2024-25 and $1.4 billion per year after that, according to the Legislative Fiscal Bureau.

Wisconsin is projected to end the 2023-25 budget with a $4 billion surplus and $2 billion in its rainy day fund.

Evers in 2021 signed a $2 billion tax cut in the state budget, but he and Republican lawmakers have largely failed to find consensus on how to cut income taxes in the state since.

Twice last year, Evers vetoed a GOP proposal to cut the income tax rate for the state's third tax bracket, which applies to joint filers earning up to $405,000 per year. Evers said at the time he would not sign into law a tax cut for wealthy earners. Republicans have said the new proposals were crafted with Evers' previous veto messages in consideration.

Jessie Opoien can be reached at jessie.opoien@jrn.com.

This article originally appeared on Milwaukee Journal Sentinel: Assembly advances $2.1B tax cut targeting middle income, retirees