Governor Tony Evers has delivered his expected veto of the tax cut sent him by the GOP Legislature.
This is good.
Using one-time revenue to make permanent tax cuts is not sound. It rekindles, and in this case increases, the structural deficit the state already confronts as it heads into 2019-21. That would be the same deficit the state eliminated in the 2011-13 budget only to bring it back in more recent years.
If Republicans really wanted to “return the surplus” they should have approved a one-time rebate.
The governor also is correct in his objection to a tax cut before the state begins consideration of his upcoming budget plan.
What’s good about gridlock is that Evers also is likely to fail in his effort to offset an income tax cut by raising business taxes.
The Badger Institute recently issued a serious report on what actually would constitute real tax reform for Wisconsin. It highlighted, among other things, the significant competitive disadvantage Wisconsin faces because of its high marginal rates for individuals and businesses.
A logical sequence for the state to follow is straightforward. Determine what spending is needed and then compromise on how to raise that revenue. Using the Badger Institute document as a starting point for tax reform would produce a result far superior to the competing “middle class tax cuts” of Evers and Wisconsin Republicans.
The governor’s veto is a reminder that on many issues he holds the biggest bat. Time will tell as to whether he and Republican legislators are willing to play ball together. In the short term, continuing political theater likely will be the new normal.