- Associated Press - Tuesday, January 21, 2014

MADISON, Wis. (AP) - Democratic legislative leaders asked Gov. Scott Walker during a private meeting Tuesday to use a $977 million budget surplus to eliminate a projected deficit and spend more on education and job training programs.

Walker didn’t reveal what he was going to propose during his State of the State speech Wednesday night, Assembly Democratic Leader Peter Barca and Senate Democratic Leader Chris Larson said during a conference call.

Walker, a Republican up for re-election in November and eyeing a 2016 presidential bid, has said he wants to tap the surplus to provide income and property tax relief. The state’s surplus surged by $912 million under new estimates released last week, setting off a frenzy in the Capitol among those hoping to get some of it.

Walker has said he won’t release his proposal until the State of the State delivered before a joint meeting of the Legislature. The meeting with Democratic leaders did not appear to change Walker’s intent to push primarily for tax cuts.

“Governor Walker believes the surplus should be returned to the hardworking taxpayers through property and income tax cuts and looks forward to working with members of both parties to make it happen,” Walker’s spokesman Tom Evenson said in an email.

Republicans control the state Senate and Assembly and can pass whatever they want without a single Democratic vote. Still, Democrats and other advocacy groups have been urging Republicans to consider using the surplus for more than just tax cuts.

Some Republicans, particularly in the Senate, also have said they want to tap some of the money to lower a projected $725 million shortfall heading into the two-year budget that the governor will submit in 2015. That projection does not account for increases in state tax collections, changes in state law or any other factors between now and then that could affect the state’s bottom line.

Before any tax cuts, Democrats want to restore cuts Walker and Republicans made to public schools and technical colleges, reduce $2 billion in additional bond spending, and lower ongoing spending commitments that create the $725 million shortfall in 2015.

“For us, we’d like to see tax cuts but we have to make sure that the essential obligations are taken care of,” Larson said.

Barca said Walker and Republicans should focus on ways to improve the lives of Wisconsin’s middle class.

“What we’re calling for is a balanced approach. Clearly Wisconsin has been struggling in jobs,” he said. According to the most recent data from the U.S. Bureau of Labor Statistics, Wisconsin ranked 37th in private sector job growth between June 2012 and June 2013.

“If we want to build a sustainable economy that will have surpluses in the future, you need to have success in this front,” Barca said of job creation.

Walker promised to create 250,000 new private sector jobs over his four years in office, but the state is on track to add only about half that.

Democrats have hammered Walker on the job creation figures, and the issue promises to be a central part of Mary Burke’s effort to defeat Walker this fall. Burke is a former Commerce Department secretary and Trek Bicycle Corp. executive.

Walker also said he wants to cut taxes every year he’s in office. Last year, Walker proposed a $100 million property tax cut and a $650 million income tax cut that the Legislature passed.

If property taxes are cut, it should be done in a way that helps average taxpayers, Barca said.

Republican Assembly Speaker Robin Vos said last week he would like to use the surplus to begin supplanting property taxes levied by technical colleges. Other ideas for spending the money include sales tax holidays for back-to-school supplies and energy efficient products, as well as lowering income tax rates.

Walker has said he will update income tax withholding tables, which will result in people getting more money back in their paychecks instead of larger income tax refunds. That is more of an accounting change that can be done without legislative approval.


Follow Scott Bauer on Twitter at https://twitter.com/sbauerAP

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