- Associated Press - Wednesday, January 15, 2014

MADISON, Wis. (AP) - Gov. Scott Walker plans to propose “significant” tax cuts in his State of the State address next week, reductions made possible by tax collections that far exceed earlier estimates, his spokeswoman said Wednesday.

Walker won’t reveal details until his speech on Jan. 22, but he is looking at property tax cuts and changing income tax withholding tables to immediately put more money into workers’ paychecks, his spokeswoman Jocelyn Webster said.

“This is great news for the hardworking taxpayers of the state,” she said.

Walker and Republicans who control the Legislature have been discussing details of the proposal, Webster said.

“I want all taxpayers to benefit from these surplus dollars,” Assembly Speaker Robin Vos said in a statement. He did not specify what Walker may propose.

Senate Majority Leader Scott Fitzgerald said in a statement that lawmakers would work with Walker to cut taxes as well as save some of the surplus. While Vos has been vocal in his support for using any surplus to cut taxes, Fitzgerald has been more cautious, saying some members of his caucus may want to put the money in savings or use it to address infrastructure needs such as road and bridge repairs.

Just how large the state’s surplus will be won’t be clear until Thursday when the nonpartisan Legislative Fiscal Bureau releases its updated estimate.

Based on Department of Revenue figures, the surplus in tax collections between now and mid-2015 will likely be in the range of hundreds of millions of dollars, Webster said.

Income tax withholding tables haven’t been changed since 2009. They could be adjusted by Walker’s administration without legislative approval. Changing the tables would have the effect of giving workers more money immediately in their paychecks instead of getting a larger tax refund months later.

Walker chose not to change the withholding tables after the Legislature approved a $650 million income tax cut last year. That means the average taxpayer will get an additional $158 refunded this year.

In addition to last year’s income tax cut, Walker proposed and the Legislature approved a $100 million property tax reduction. The impact of that varies widely across the state, but for the typical homeowner it reduced the amount the homeowner owed by $13 last year and $20 next year.

The timing for large tax cuts couldn’t be better for Walker and Republican lawmakers as they face re-election in November. Walker is being challenged by Democrat Mary Burke, a former state Commerce Department secretary and executive with Trek Bicycle Corp.

Burke said in a statement that she needs to see the actual proposal and amount of the surplus, but that “everywhere I go people’s top concern is jobs and the economy. Tax cuts geared towards those at the top don’t create jobs.”

Other Democratic critics echoed Burke and said Walker should be focused on creating jobs, not just cutting taxes.

“I think we’ll be on the right track when people can get back to work and paid a decent wage when they’re at work and actually have a chance to make it in the middle class,” said Democratic Rep. Cory Mason, of Racine, a member of the Legislature’s budget committee.

Wisconsin cannot cut its way into prosperity, said Democratic Senate Minority Leader Chris Larson.

“Wisconsin should commit itself to long-term solutions instead of short-sighted gimmicks,” he said in a statement. “Wisconsin citizens want us to again prioritize Wisconsin’s future by reinvesting in the areas that have been ignored the last three years, including K-12 education, technical colleges and making higher education affordable.”

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