3 minute read
GOVERNMENT AFFAIRS
GOV. EVERS CALLS FOR TAXPAYER REFUND IN ANNUAL STATE ADDRESS
Wisconsin Governor Tony Evers (D) delivered his fourth annual State of the State address this month before a joint session of the Republican controlled state Legislature. In the Governor’s address, he called on the Legislature to convene a special session to take up his plan to return a portion of the state’s $3.8 billion projected revenue surplus back to taxpayers this year. Evers’ proposal would direct about $1.7 billion of the surplus towards tax relief, as well as additional education and childcare spending. Republicans quickly pushed back labeling it an election year gimmick from the Governor.
Governor Evers’ annual address was delivered in-person in the State Assembly Chambers of the Wisconsin Capitol as has been the longstanding tradition prior to the start of the pandemic. It was the final official address of Governor Evers’ first four-year term in office as he gears up to run for a tough reelection fight this November.
In January, the nonpartisan Legislative Fiscal Bureau (LFB) announced some positive economic news that Wisconsin is looking at a projected revenue surplus of $3.8 billion at the end of the 2021-23 biennium - which is nearly $2.9 billion more than was expected just several months ago. Much of this is attributed to large increases in sales, income, and corporate tax collections. The LFB periodically conducts an analysis of the state’s general fund forecast and presents its findings to the Legislature. The additional projected revenue is welcome news for Wisconsin taxpayers despite other not-so favorable economic news of ongoing supply chain slowdowns, rising fuel prices, and inflation hitting an all-time high in more than four decades. The federal Department of Labor recently reported that consumer prices jumped 7.5 percent last month compared with a year earlier, the steepest year-over-year increase since February 1982. Notwithstanding the challenging economic conditions at home and across the nation, Wisconsin has the highest-ever positive GAAP balance in state history at more than $1.1 billion, while the state’s rainy day reserve fund sits at the highest level in history at $1.7 billion.
On the heels of the Governor’s state address, Evers wasted no time and issued Executive Order #156 calling for a special session of the Legislature to act on his plan to tap into the surplus revenues to provide immediate financial relief to Wisconsin families. As part of Evers’ plan, he is proposing using a portion of the projected surplus to:
• Allocate $815.7 million toward a surplus refund of $150 for each Wisconsin resident
• Allocate $29.3 million to increase the newly created Wisconsin nonrefundable credit match on the Child and Dependent Care Credit from 50 percent of the federal credit to 100 percent
• Invest nearly $611 million in K-12 education
According to Evers, every Wisconsin resident will be able to receive the full surplus refund, including for each of their dependents. A family of four, for example, would receive $600 under the Governor’s proposal. Most taxpayers would need to take no action to receive the refund, which would be distributed through information provided by an individual on their tax returns.
Despite the Governor’s formal executive order, the Legislature is not bound to convene a special session to act on Evers’ proposal. Already, Republican leaders in both houses have thrown cold water on the plan calling it “a reelection gimmick from the Governor.” Assembly Speaker Robin Vos and Senate Majority Leader Devin LeMahieu have indicated that their preference is to hold on to the excess revenues until after the 2022 elections when they can come up with a bigger tax plan of their own for the next state budget cycle in 2023. Republicans are increasingly supporting a broader plan that would have Wisconsin join nine other states in permanantly eliminating the state personal income tax. Meanwhile, legislative Republicans are also hoping that a Republican governor will win election in November and be more receptive to their tax relief plans.
The state Legislature is quickly winding down its regular session in preparation for the fast approaching campaign season and both houses are expected to adjourn on March 10.
> Misha Lee
IIAW Lobbyist
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