Wisconsin Gov. Tony Evers (D) introduced his $91 billion state budget this week, a largely political document that would increase state spending by more than 9% this year, and impose about $1 billion in numerous tax increases. Right before Evers was elected in 2018, he claimed he would raise no taxes.
Evers’ budget proposal raises taxes in the following ways:
— Limits the amount that manufacturers can claim for an existing tax credit to $300,000 a year. That will raise taxes by about $485 million over the next two years.
— Eliminates the 30% percent long-term capital gains exclusion for single filers earning more than $400,000 and joint filers earning more than $533,000. This move will increase taxes by about $350 million.
— Raises taxes roughly $540 million by conforming to the base broadening and revenue-generating provisions of the 2017 Tax Cuts & Jobs Act (TCJA). Such conformity with the TCJA would raise state taxes by $548 million dollars over the next two years.
Gov. Evers is also proposing a half-cent local sales increase that, along with the other tax hikes included in his budget, has been met with strong opposition from the Badger State’s business community.
“Hard-working Wisconsin families and small businesses have had to make tough decisions about their own budgets this past year,” Scott Manley, executive vice president for Wisconsin Manufacturers & Commerce, said of Gov. Evers’ budget proposal. “Instead of having similar discussions about how to make government more efficient, this plan just takes more money from taxpayers at a time when they can least afford it.”
A Wisconsin Policy Forum report forecasted in December that the state could possibly be facing the largest budget shortfall since 2011. Governor Scott Walker and Wisconsin legislators closed that 2011 shortfall with no tax hikes thanks to the help of Act 10, the landmark entitlement reform, key parts of which Governor Evers is proposing to repeal as part of his new budget that will serve as a door stopper for Republican legislators. The state will have roughly $2 billion in reserves by June 30th, and that is before the billions of additional federal cash that the new Democratic-run Congress is getting ready to send to Madison. Aside from the harm Governor Evers’ proposed tax hikes would do to individuals, families, and employers across Wisconsin, the fact is that they’re simply not needed.