The Republican-controlled Wisconsin Senate has passed a $2 billion income tax cut. This decision is part of a broader package that also addresses child care costs. However, the package's future remains uncertain, as Democratic Governor Tony Evers is widely expected to veto it.
The tax cut proposal comes after Republicans dismantled a $1 billion package from Evers, which he had urged them to approve during a special session last month. Instead, the GOP introduced an income tax cut, a move that Evers had previously vetoed. The governor's spokesperson has criticized the Republican proposal, dismissing it as an "embarrassing response" and labeling it a "completely unserious proposal."
The ongoing tussle between Evers and the Legislature has centered on tax cuts and child care service funding for several months. On Monday, Evers announced his decision to allocate $170 million from federal pandemic relief funds to ensure the continuation of the Child Care Counts program until June 2025.
Evers' original proposal to the Legislature encompassed a $365 million increase in child care funding, a $65 million enhancement for the University of Wisconsin, $200 million for a new engineering building at UW-Madison, and $243 million to establish a new 12-week family medical leave program for Wisconsin workers. Additionally, it included substantial funds for workforce education and various grant programs.
However, Republicans rejected Evers' proposal last month. Instead, they are set to endorse an alternative plan on Tuesday, which not only comes with a heftier price tag but would also be financed from state reserves. Evers has contended that the state's current $7 billion budget surplus should be utilized to fund these initiatives.
The Senate's proposal revives a GOP-backed income tax cut, aiming to reduce taxes from 5.3% to 4.4% for individual incomes ranging between $27,630 and $304,170. For married couples, the income bracket is between $18,420 and $405,550.
Furthermore, the Republican bill proposes the creation of a state tax credit for families incurring child care expenses. It also seeks to increase income tax deductions for private school tuition, validate professional credentials granted to workers from other states in Wisconsin, and prevent state examining boards from mandating counselors, therapists, and pharmacists to undergo tests on state laws and regulations.
The Senate's plan also advocates for Wisconsin's inclusion in multistate agreements, allowing physician assistants, social workers, and counselors to operate across all participating states. The Wisconsin Economic Development Corporation might request funds from the Legislature's budget committee to assist child care providers in obtaining certification.
Lastly, the proposal stipulates that individuals claiming unemployment benefits must engage directly with potential employers, upload a resume on the state Department of Workforce Development's website, and undergo a re-employment counseling session if they have fewer than three weeks of benefits left.
