Gov. Walker signs tax cut bill which eases property tax burden
MADISON (AP) – Gov. Scott Walker on Monday signed his half-billion dollar property and income tax bill at a farm in northeast Wisconsin.
Walker, who pushed for the $541 million tax cut in light of positive economic forecasts predicting the state will have a nearly $1 billion budget surplus by the middle of next year, was to sign the measure into law at Horsens Homestead Farms northwest of Green Bay.
Republicans who control the Legislature went along with Walker’s proposal, passing it in the Assembly last week. The Senate approved it earlier this month. Three Assembly Democrats voted with all Republicans on it, while Republican Sen. Dale Schultz joined Senate Democrats in opposition.
The bill provides $406 million in property tax cuts statewide. That will be done by lowering the property tax levy that technical colleges can assess and instead replacing the money with state funds. Additionally, the bill provides nearly $99 million in income tax cuts by slicing the lowest bracket from 4.4 percent to 4 percent.
It also will lower income taxes for factory and farm owners by $128 million over the next three years. That will save about 30,000 tax filers an average of $800 next year.
For individual taxpayers, the measure amounts to a $131 reduction on a median-valued home’s tax bill this December and saves the average worker $46 in annual income taxes.
As part of a compromise reached with moderate Republicans in the Senate to help pass the bill, Walker agreed to cut state spending by $38 million to improve the state’s overall budget outlook.
Democrats who objected to the tax cuts said it wouldn’t provide any substantive relief to people and argued it was nothing more than a campaign gimmick Walker can use as he seeks re-election in November.
Democrat Mary Burke, a former state Commerce Department secretary who is running against Walker, has said about half of the surplus should be put into savings and used to reduce $2 billion in new borrowing. Burke said the remainder should be used for property tax cuts and worker training programs.
Democrats in the Legislature offered similar alternatives which targeted more of the property tax cut to lower income homeowners, but those plans were rejected.
Walker has already signed into law a separate measure tapping the surplus to increase worker training spending by $35 million.
Additionally, Walker separately used about $320 million of the surplus to overhaul income tax withholding rates, a move that will put more money into workers’ paychecks starting in April. The typical family of four is estimated to see $58 more in their paychecks starting next month, based on estimates by the state Department of Revenue.
That will result in smaller income tax returns next year since workers will be paying less in taxes each month.