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Walker’s Tax Cut Plan Squeaks By In State Senate

Governor Offered Plan Earlier This Year

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State Senate chambers in the Wisconsin Capitol
State Senate chambers in the Wisconsin Capitol. Photo: jimmywayne (CC-BY-NC-ND)

Gov. Scott Walker’s proposed tax cuts cleared their biggest legislative hurdle on Tuesday, passing the state Senate with just one vote to spare.

It was the Senate that slowed the passage of Walker’s tax cuts, but the bill Republicans passed on Tuesday is pretty close to what the governor proposed more than a month ago, with a $400-million property tax cut, a $100-million income tax cut and a tax cut for manufacturers and farmers that will grow over the next several years. Senators made a small change that would divert money headed for Wisconsin’s rainy day fund to its general fund instead.

Republican Senate Majority Leader Scott Fitzgerald said he was pleased with the final product.

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“The bill before us that’s going to pass in the Senate is the best that I think we can do and sends the right message to Wisconsin citizens,” Fitzgerald said, “that the majority right now is doing a good job managing the state’s finances.”

These tax cuts are based on projections showing that tax revenues will increase by about $900 million over the next couple years. Democratic state Sen. Fred Risser said it was reminiscent of what happened in the late ’70s and early ’80s under former Republican Gov. Lee Dreyfus. The state had a surplus, Dreyfus cut taxes, and when the economy tanked, the state faced a major budget deficit.

“This projected increase is wonderful,” Risser said. “But, let’s not cement it into a revenue decrease.”

Democrats offered their own alternative that would have saved more of the surplus, in part by rescinding the governor’s changes to the income tax withholding tables.

The governor’s tax cut passed 17-15, with Sen. Dale Schultz the only Republican to oppose it.