Evers signs GOP-written state budget with $2B tax cut
Democratic Wisconsin Gov. Tony Evers signs the Republican-written state budget that includes a $2 billion income tax cut at Cumberland Elementary School, Thursday, July 8, 2021, in Whitefish Bay, Wis.
Democratic Wisconsin Gov. Tony Evers speaks before he signs the Republican-written state budget that includes a $2 billion income tax cut at Cumberland Elementary School, Thursday, July 8, 2021, in Whitefish Bay, Wis.
WHITEFISH BAY, Wis. (AP) — Gov. Tony Evers signed the Republican-written state budget Thursday, enacting a two-year spending plan that includes a $2 billion income tax cut while making 50 largely minor partial vetoes, saying unfinished business still needs to be addressed.
The budget will also cut property taxes for the owner of an average home by $100 next year, ends a University of Wisconsin tuition freeze in place for eight years, increases salaries for state employees and basically holds K-12 funding flat.
Evers also announced that schools will be receiving $100 million more in federal funds to use as they wish.
Both Evers, who signed the budget, and the Republicans who wrote and passed it took credit for the tax cut made possible by a revenue surplus.
Evers, a Democrat who is running for reelection next year, cast it as a bipartisan effort even though the tax cut was added to the budget by Republican lawmakers. Only seven Democrats out of 49 voted for the budget. Evers’ original budget would have raised taxes, primarily on manufacturers and the wealthy, by more than $1 billion.
“I could have vetoed that,” Evers said of the GOP tax cut proposal. “I made a promise to the taxpayers, to the state, we would reduce middle class taxes by 10% and we did 15%. It is a bipartisan effort.”
Republicans reacted angrily to Evers taking credit for the tax cut, with the GOP co-chairs of the budget committee calling it “laughable.”
“Gov. Tony Evers deserves NO credit for signing our budget,” Republican Senate Majority Leader Devin LeMahieu said in a statement. “This was not a bipartisan process of colleagues sharing ideas. He got boxed into a corner and rather than fight for his unpopular budget and risk a political knockout, he and his team threw in the towel and signed our responsible budget.”
The average person earning $61,000 a year will see an income tax cut of $488 this tax year and $975 over the next two years, state Revenue Secretary Peter Barca said at the bill signing ceremony at a suburban Milwaukee elementary school.
Evers opted to sign the budget rather than take the unprecedented move of vetoing the entire plan. Evers said he didn’t veto it because that would have jeopardized $2.3 billion in federal coronavirus relief funding for K-12 schools. That money only comes to the state if funding for schools increases enough to meet federal requirements, which the budget as signed would do.
Evers also vetoed a bipartisan bill to eliminate a property tax paid by businesses, saying the measure as proposed would have unintended negative consequences. Evers kept money in the budget to pay for it, saying he hoped the Legislature would pass a better bill to eliminate that tax.
Two years ago, Evers issued 78 partial vetoes and four of them were challenged in court. The Wisconsin Supreme Court struck down three of them, but its ruling did not directly address a governor’s veto authority going forward.
Evers said that court ruling “absolutely” limited his ability to make more sweeping vetoes this year.
“This budget isn’t good enough for our kids,” Evers said, surrounded by elementary school children. “Republicans could have and should have done more.”
Evers wanted to spend more on schools, but Republicans essentially held funding flat. Evers was able to tap $100 million in federal COVID-19 funds for schools outside of the state budget.
Republicans also directed about $650 million to schools but did it in a way that the money must be used to reduce property taxes, rather than go toward new spending by the schools.
Republicans stripped hundreds of Evers’ proposals from the $87.5 billion spending plan, which takes effect immediately and runs through the middle of 2023. The budget Evers signed does not expand Medicaid, legalize marijuana, reinstate collective bargaining rights for public workers, raise taxes on the wealthy, increase the minimum wage cap enrollment in private voucher schools or enact gun control measures as Evers had proposed.
The budget ends an eight-year tuition freeze on University of Wisconsin System undergraduate resident tuition. But even with the new freedom to raise tuition, the UW Board of Regents on Thursday voted against doing so in the next academic year.
The budget cuts income taxes by $2 billion over two years, mostly by lowering one tax bracket from 6.27% to 5.3%. It would apply to individuals making between $23,930 to $263,480 and married couples filing taxes jointly who earn between $31,910 and $351,310.
Evers did veto changes to the income tax withholding tables, meaning that the state won’t reduce how much is taken out of each paycheck but instead will square up after a person files their taxes. That amounts to $700 million the state will collect and ultimately return.