Gov. Walker says Wisconsin will benefit from massive Illinois tax hikes

WAUWATOSA -- Tuesday, July 4th marked four days into Wisconsin's new budget year -- and the state has no budget. At least Wisconsin is not Illinois, said Gov. Scott Walker, where massive proposed tax increases are in limbo.

Before walking in Wauwatosa's Fourth of July parade, Walker said he'd return to work on Wisconsin's unfinished budget Wednesday.

"I would anticipate this would get done. I would expect sometime here in July," Walker said, noting that the previous budget was also late. Walker signed that one on July 12th, 2015, but this year's effort will almost certainly take longer.

The Republican-controlled Legislature is at an impasse over funding for road construction. Assembly Speaker Robin Vos wants to raise taxes or fees for roads, but says fellow Republicans in the Senate won't go along with that plan.

"So, I guess the next move is on their part. I'll be waiting on what revenue increases they can support, or else we're just going to stay at the same level of spending and a whole lot of these projects will be canceled or delayed," Vos said during a Monday appearance on The Joy Cardin Show on Wisconsin Public Radio.

There are no short-term consequences in Wisconsin for not having a budget because state spending simply continues at the current level. However, if the stalemate drags on for months, road projects would lose funding and school district could not plan their own budgets because they wouldn't know how much state aid they'd be getting.

 

Chronically divided Illinois lawmakers have passed a budget before Wisconsin, though it took a Fourth of July vote to approve a 32 percent individual income tax hike and a 33 percent corporate income tax increase. Republican Gov. Bruce Rauner quickly vetoed the spending plan.

Democrats in the Illinois legislature started the process of overriding Rauner's veto with a vote in the state Senate. It's unclear whether the House will have enough votes when it convenes later this week.

Illinois Democrats say the huge tax increases are necessary to prevent credit rating agencies from downgrading the state's rating to junk status.

Walker said, if Illinois implements the tax hikes, it would be Wisconsin's gain. He predicted that companies and people will flee Illinois.

"With the concerns they're seeing in Illinois right now, that makes Wisconsin -- whether it's Kenosha, Racine, Milwaukee, Walworth, Rock County -- all those areas will benefit from that," said Walker.

In his own state's budget impasse, Walker said he is willing to cut his initial proposal to borrow $500 million over the two-year budget for roads down to $300 million. The Assembly has said it wants to incur significantly less debt that the $500 million figure, while Senate Republicans have suggested $850 million in borrowing.

Walker called his proposal to cut borrowing to $300 million "a reasonable position" and said, "We can help the Assembly get there as well as the Senate, and that’s part of what we’ll be talking about this week."

Milwaukee Mayor Tom Barrett blasted the internal division among Wisconsin Republicans.

"The Republicans have an internal squabble, and I don’t want the people in the local areas to suffer from the internal fight that the Republicans are having," Barrett said.