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Will taxpayers get relief or will they get Tonied?

By M.D. Kittle

MADISON — Wisconsin’s state budget is projected to end the current fiscal year with a $2.6 billion balance (surplus), $816 million more than originally projected, according to a memo released Tuesday from the nonpartisan Legislative Fiscal Bureau.

In total, LFB’s re-estimates show an increase of $4.4 billion above January estimates, with a projected ending balance in the 2021-23 budget of $5.7 billion.

That flood of projected cash raises a critical question: Will taxpayers get that money back or will they get Tonied?

The Republican-controlled Legislature is eying significant tax relief.

“This is a once-in-a-generation opportunity to fundamentally reform our tax code and provide transformational tax relief for Wisconsinites,” said Senate Majority Leader Devin LeMahieu (R-Oostburg). “Hard-working taxpayers gave the state a massive surplus. We will take this moment to consider ways to significantly reduce the tax burden on workers and main street businesses and pay off state debt to save taxpayers long into the future.”

Sources say Senate proposals include eliminating as many as two tax brackets, cutting the antiquated personal property tax on businesses, and other tax reforms.

Assembly Republicans say the robust revenue picture allows room for both cutting taxes and investing in the state’s priorities. That could mean bolstering the K-12 education budget beyond the $128 million in new state funding the Republican-led Joint Finance Committee has already committed to.

Gov. Tony Evers wants more than $1 billion more in state ed spending despite the fact schools are already getting more than $2.4 billion in federal COVID relief. He has called the Republicans’ education spending proposal “paltry,” indicating he doesn’t understand the definition of the word as the total K-12 budget is poised for a 17 percent increase from the current record education spending levels.

Assembly Speaker Robin Vos (R-Rochester) said his caucus would be discussing the state’s priorities, including lowering the income and property tax burden on businesses and families.

The better-than-expected revenue now more than ever appears to make tax increases a non-starter for Republicans. Despite the billions of dollars in federal aid and state tax collections, Evers has yet to give up his call for north of $1 billion in tax hikes.

Sen. Duey Stroebel (R-Cedarburg), a member of the Joint Finance Committee, predicted “knee-jerk reactions from many to spend this new state revenue on growing government.”

His prediction came true quickly after the release of the LRB memo to lawmakers.

Evers announced he would reverse the $300 million in budget cuts — or lapses — he had ordered at the state’s largest government agencies. He called for the lapses when things looked really bad in the throes of the pandemic, after his lockdowns shut down businesses and tossed tens of thousands of Wisconsinites out of work.

The governor applauded himself for making “tough decisions,” even as he has, with a straight face, proposed a record-shattering $91 billion biennial budget loaded with pork and presents for his radical left allies.

Sen. Howard Marklein (R-Spring Green), co-chair of the Joint Finance Committee, urged continued sober budgeting in a time of unprecedented surplus.

“These numbers show Republican reforms and responsible budgeting have further solidified the health of our budget,” Marklein said. “However, the fact that our state experienced such an unpredictable contraction and rebound in such quick succession underscores the need to be cautious with this budget. If we recklessly spend this new money and grow taxpayer obligations in an unsustainable way, we risk future fiscal stability – a stability Republicans have spent a decade cultivating.”

The radical left wasn’t about to listen to rational savings advice.

“We must keep our foot on the gas, fund the priorities and investments in Gov. Evers’ Badger Bounceback Budget, and continue moving Wisconsin’s economic recovery forward,” said Assembly Minority Leader Gordon Hintz (R-Oshkosh)

The hefty projected closing balances in the current fiscal year are fueled by $1.448 billion in better-than-expected tax collections, according to LFB.

State Sen. Dale Kooyenga (R-Brookfield), a member of the Joint Finance Committee, said the surplus affords an opportunity to “set the stage for even more long-term economic growth, and continue showing that lower taxes means higher revenues.”

Republicans control the Legislature. Evers holds the veto pen.

So will taxpayers get tax relief or Tonied?

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