MADISON, Wis. (AP) - Gov. Scott Walker signed his half-billion dollar property and income tax bill Monday at a farm in northeast Wisconsin, then within hours sent out a re-election fundraising plea referring to the new law.
Walker, who pushed for the $541 million tax cut in light of positive economic forecasts predicting the state will have a nearly $1 billion budget surplus by the middle of next year, signed the measure into law at Horsens Homestead Farms northwest of Green Bay.
“This is a great day for the hardworking taxpayers of Wisconsin,” Walker said in an official statement sent by his office.
Minutes earlier, Walker’s campaign attempted to turn the legislative victory into a way to raise money for his re-election bid against Democrat Mary Burke, a former Trek Bicycle Corp. executive.
“Please contribute $10 today to let the big government union bosses know that you support tax relief and that you want to keep moving Wisconsin forward,” Walker said in the email sent less than two hours after he signed the tax cut bill.
The tax cut easily cleared the Republican-controlled Legislature, passing the Assembly last week and the Senate earlier in the month. Three Assembly Democrats voted with all Republicans on it, while Republican Sen. Dale Schultz joined Senate Democrats in opposition.
The new law provides $406 million in property tax cuts statewide. That will be done by lowering the property tax levy that technical colleges can assess and instead replacing the money with state funds. Additionally, the bill provides nearly $99 million in income tax cuts by slicing the lowest bracket from 4.4 percent to 4 percent.
It also will lower income taxes for factory and farm owners by $128 million over the next three years. That will save about 30,000 tax filers an average of $800 next year.
For individual taxpayers, the measure amounts to a $131 reduction on a median-valued home’s tax bill this December and saves the average worker $46 in annual income taxes.
As part of a compromise reached with moderate Republicans in the Senate to help pass the bill, Walker agreed to cut state spending by $38 million to improve the state’s overall budget outlook.
Democrats who objected to the tax cuts said it wouldn’t provide any substantive relief to people and argued it was nothing more than a campaign gimmick Walker can use as he seeks re-election in November.
Burke, a former state Commerce Department secretary, has said about half of the surplus should be put into savings and used to reduce $2 billion in new borrowing. Burke said the remainder should be used for property tax cuts and worker training programs.
“I’m all for tax cuts, but not when they’re done in a fiscally irresponsible manner that jeopardizes the state’s finances,” Burke said in a statement. “Walker’s approach to spending the projected surplus is irresponsible.”
Democrats in the Legislature offered similar alternatives which targeted more of the property tax cut to lower income homeowners, but those plans were rejected.
Walker has already signed into law a separate measure tapping the surplus to increase worker training spending by $35 million.
Additionally, Walker separately used about $320 million of the surplus to overhaul income tax withholding rates, a move that will put more money into workers’ paychecks starting in April. The typical family of four is estimated to see $58 more in their paychecks starting next month, based on estimates by the state Department of Revenue.
That will result in smaller income tax returns next year since workers will be paying less in taxes each month.
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