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Capital City Sunday: Republicans pass $3.4B tax cut; Dems say cuts skewed away from working class

MADISON (WKOW) -- GOP members of the Joint Finance Committee cut taxes by $3.4 billion in its final votes on the upcoming two-year budget during the committee's final votes Thursday.

The budget now goes before the full legislature; both houses are expected to take their votes around the end of the month.

The state had more than $5.3 billion to play with coming into Thursday's votes following an unprecedented increase in projected tax collections and federal coronavirus relief.

Republicans made a series of cuts to the state's income, property, and personal property taxes. The bulk of the proposed tax cuts come to the state's income tax collections.

People in the third tax bracket, earning between $24,000 and $263,500 per year if they're a single filer, would have their rates reduced from 6.3 percent to 5.3 percent.

The cuts also amounted to about $600 million in property taxes and $200 million in personal property taxes.

"With that kind of surplus, it means we overtaxed you so it's time to give it back to the families of the state of Wisconsin," said Sen. Mary Felzkowski (R-Tomahawk) "They know how to spend their money much better than Madison knows how to spend their money."

Joint Finance Democrats said the budget failed to send enough relief to local governments. They also said much of the state's surplus would've been better spent on massive one-time infrastructure projects.

"You can cut taxes but you can also give some of that money back to local units of government," Erpenbach said. "Whether it be school districts, counties, cities, villages, whatever. They have a lot of infrastructure needs."

JFC Dem expects some colleagues to support budget

Erpenbach said Friday he expected some Democrats to vote in favor of the state budget set by Republican legislators this week.

He described the bill as "not bad," which is high praise in a legislature marked by significant splits on budget priorities. Erpenbach said he wasn't yet sure how he'll vote when full Senate votes on the bill, which is expected to happen before the end of this month.

"I don't know [how I'm voting]," Erpenbach said. "I would not be surprised at all if some Democrats vote for the budget. The budget overall, compared to previous budgets, really, is not bad."

Erpenbach said it was both a blessing and a burden to have the budget-writing finance committee go into the last night of deliberations Thursday with more than $5 billion at its discretion.

Felzkowski acknowledged the wide income disparities in the group Republicans are branding as 'middle class.' She added GOP lawmakers were being consistent with a belief tax rates should be flat as possible, adding they had lowered tax rates for the two lower-income brackets in recent budgets.

"Republican, conservative philosophy is moving us toward that flatter tax rate," she said. "And in our last two budgets, we did our tax cuts in the lower rates."

Counties Weigh In

The Assembly on Wednesday passed a bill delaying redistricting for county and municipal districts.

Critics of the measure said they worried the move could allow state Republicans to hold onto the 2011 legislative maps during the 2022 elections.

"The idea that we would get behind something that we feel is unnecessary, that many of us hadn't heard anything from our locals on, that, you know, sets the table for perhaps delaying our own maps is simply not something we're going to support," said Assembly Minority Leader Gordon Hintz (D-Oshkosh).

Mark O'Connell, Executive Director of the Wisconsin Counties Association, said he believed such concerns were overblown.

"This piece of legislation affects local elections only, the spring elections only," O'Connell said. "It has nothing to do with State Senate or Assembly boundaries, nothing to do with congressional boundaries, nothing. I know some people would like it to mean that because they may be fundraising off of that or making political hay."

O'Connell said he was also closely watching a bill that would regulate how the state receives money from a potential opioid abuse settlement.

"It gets Wisconsin ready so that when a settlement is offered, we can receive those dollars quickly, put them to use on mitigation and abatement of the misuse and abuse of opioids," O'Connell said.

The issue of how funds are dispersed from any opioid settlements could further ignite the legal battle between Democratic Attorney General Josh Kaul and a Republican legislature that weakened his power during the lame duck session following Gov. Evers' election in 2018.

The bill maintains, as the 2018 legislation did, any settlements Kaul's DOJ reaches would need the approval of the Joint Finance Committee, something Kaul is fighting in court.

O'Connell said he just wanted to ensure the bill passes to establish a clear path for settlement money to quickly reach counties. It's unclear whether Evers would sign it.

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A. J. Bayatpour

Capitol Bureau Chief

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