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Highlights, reaction to Walker's State of State

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Associated Press
January 23, 2014

MADISON — Gov. Scott Walker made the case for $504 million in property and income tax cuts in his hourlong State of the State speech Wednesday. Highlights from the speech, and reaction, include:

TAX CUTS: Walker is proposing a $406 million property tax cut and a $98.6 million income tax reduction, part of what he calls a "Blueprint for Prosperity." The property tax cut would be made by reducing the technical college levy and would show up on the tax bill mailed in December. The income tax cut would be done by reducing the lowest rate from 4.4 percent to 4 percent. That is applied to the first $10,910 in income for single filers and the first $14,540 for married couples.

INCOME TAX WITHHOLDING: Walker ordered the Department of Revenue to update income tax withholding tables to return about $322 million to taxpayers in their paychecks, instead of it coming back through their tax return. Walker said that equates to about $58 a month for a typical family of four.

OTHER TAX CUTS: Walker's plan doesn't include a sales tax holiday, exempting aviation companies from paying sales taxes on aircraft maintenance parts and labor or other tax cut ideas that have been floating around the Legislature. Lawmakers are sure to feel pressure to work those into whatever package is passed, but for now there's no consensus on what may get added.

DEFICIT: Walker's tax cuts would increase the state's projected deficit heading into the two-year budget that begins in mid-2015 by $100 million. The shortfall already stands at $725 million without any changes. However, that doesn't take into account revenue growth. Some Republican senators have said they want to reduce that shortfall in addition to cutting taxes.

WORKER TRAINING: Walker proposed adding $35 million to the Wisconsin Fast Forward program to be used on eliminating waiting lists for high demand fields at technical colleges, help high school students get trained for high-demand jobs through dual enrollment programs and support programs that help people with disabilities find work.

PEOPLE WITH DISABILITIES: Walker announced a yearlong initiative designed to help people with disabilities find work. Walker said he will spend the year highlighting employers who hire people with disabilities as well as groups that work to help them get trained and find work. "Filling all the positions available in the state, now and in the future, also requires us to think and act in new ways," Walker said.

CHEERS FOR WALKER: The head of the state chamber of commerce praised Walker's tax cut plan.

"As those dollars are kept in the hands of our citizens, we will encourage job creation as people spend that money rather than sending it to state government," said Wisconsin Manufacturers & Commerce president Kurt Bauer.

Sen. Mary Lazich, R-New Berlin, also backed Walker's tax cut proposal saying, "Wisconsin residents have been living in a tax hell far too long."

JEERS FOR WALKER: Democrats said Walker's tax cut proposal was misguided and wouldn't help the middle class. Rep. Mandy Wright, D-Wausau, said the money should go toward public schools, health care workers, public transit, worker training initiatives and local governments.

"While property tax relief for families and seniors is a good start, we need a more comprehensive and balanced approach that also invests in our future," said Sen. Jen Shilling, D-La Crosse. "In 2014, we need to focus on supporting middle class families, prioritizing investments in small business development, improving access to affordable health care, and restoring the funding that was cut from our local community schools."



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