Gov. Tony Evers vetoed the Republican bill to cut taxes for Wisconsin’s middle class Wednesday afternoon. In his veto message, Evers said he opposed the tax cut because it relied upon the current budget surplus and did not have bipartisan support.
“I am vetoing the bill because I object to passing a major fiscal policy item outside of the biennial budget process, which will begin in less than ten days, especially given that this bill will be unsupported going forward as it relies simply on draining the opening balance for the upcoming biennium,” Evers wrote.
“Further, I am troubled and disappointed that this major fiscal policy was introduced and passed without bipartisan support and cooperation,” Evers added. “The people of the State of Wisconsin expect and deserve for their leaders to work together, and I plan to do my part to make sure that happens.”
Republicans had touted the bill as an effort towards reaching a bipartisan support for the middle class tax cut because of Evers’ campaign promise to cut taxes on the middle class by ten percent. However, despite the appeal to bipartisanship, even calling it the Evers’ tax cut, no legislative Democrats supported the proposal because it did not eliminate the agriculture and manufacturing tax credit as Evers also promised.
Raising taxes on manufacturers and farmers to cut taxes elsewhere was strongly opposed by Republicans and their allies. Scott Manley, the Senior Vice President of Government Relations, for Wisconsin Manufacturers and Commerce (WMC) explained in January how the tax credit helped Wisconsin’s economic growth.
“This tax credit has been a crucial to Wisconsin’s growing economy,” said Manley. “More than 10,000 employers of all different sizes took advantage of the MAC last year, and that has allowed them to invest more in their businesses, their workers and their communities.”
Legislative Republicans quickly criticized the governor’s veto decision.
“Middle-class Wisconsinites deserve a tax break – it’s unfortunate that Governor Evers is telling them to wait their turn instead of lowering their taxes,” Senate Majority Leader Scott Fitzgerald (R-Juneau) said. “With eight years of responsible budgeting and reforms, Wisconsin’s budget is running a surplus and we can afford this tax cut to help hard-working families get ahead. I am confident that Senate Republicans will redouble our efforts and fight to include a middle-class tax cut in the upcoming state budget.”
Fitzgerald also cautioned Evers about expecting the elimination of the manufacturing tax cut in the state budget.
“Let me be clear with the governor: I will not support raising taxes on our state’s job creators,” Fitzgerald said. “With our economy expanding and the state running a surplus, we shouldn’t be introducing uncertainty into the industries fueling Wisconsin’s comeback.”
Assembly Majority Leader Jim Steineke (R-Kaukauna) was equally critical of Evers’ decision to veto the proposed tax cut, accusing the governor of playing politics.
“It’s disappointing to have Governor Evers put politics above policy,” Steineke said in a statement Wednesday. “Our legislation accomplished his campaign promise of cutting taxes on the middle class, and did so without harming our small businesses and job creators.”
As for Evers’ complaint about the failure of the bill to get bipartisan support, Steineke appeared to put the blame on the governor.
“Ultimately, we put forth a good faith effort of bipartisan legislation, and it’s unfortunate to not see Governor Evers’ actions match his words,” Steineke said. “Despite this step backwards, I remain committed to continuing finding paths to common ground and compromise.”
Rep. John Nygren (R-Marinette), the co-chairman of the legislature’s Joint Finance Committee, was also sharply critical of Evers’ lack of bipartisan support for a tax cut he claims to support.
“Governor Evers preaches working together but his actions are nothing short of divisiveness,” Nygren said in a statement after the veto. “Even though he knows Republicans will never agree to it, the governor seems determined to raise taxes on our struggling agriculture industry and thousands of manufacturers. The state has $2.4 billion in funding available for the next budget which is the most in at least the last 20 years. There is no need to raise taxes.”
Nygren’s statement also pointed out that Evers’ tax cut proposal, despite raising taxes on manufacturing and agriculture by “over a half billion dollars,” falls short of being paid for by $350 million.
“The Governor’s action today sends a clear message to every Wisconsinite: the bipartisanship message he preached during his campaign was nothing more than a smokescreen,” Nygren said. “Instead of pitting employers and employees against each other, Governor Evers should be uniting Wisconsin.”
The other co-chairman of the Joint Finance Committee, Sen. Alberta Darling (R-River Hills), was equally blunt in her statement after Evers’ veto.
“Our plan took his promise and funded it. We would have loved to deliver more tax relief, but we tried to meet him halfway,” Darling said, “After he was sworn in, Governor Evers urged us to find bipartisan solutions. One month later, he’s vetoing his first big chance at compromise. He’s vetoing your tax cut because he really wants to stick it to job creators.”
The Republican middle class tax cut, unlike the Evers plan, actually had a mechanism for cutting taxes for the middle class by expanding the sliding scale standard deduction for individual income taxes starting with the 2020 tax year. Taxpayers with incomes under $100,000 would receive 87.9 percent of the decrease in taxes. The tax cut would have lowered taxes for all filers by $170 on average and lowered the tax burden for married joint filers by $231 on average.
The bill, vetoed in its entirety by Evers, now goes back to the Assembly where Republicans can attempt to override the veto if they can get two-thirds of the state representatives to agree. In the unlikely event that should occur, the Senate would have to get two-thirds of its members to vote to override the veto.