Tax relief fairly certain, says Harsdorf
Wisconsin senators are committed to providing tax relief so while the Legislature’s finance committee hasn’t yet analyzed bills adopted last week by the Assembly, relief will come, promised Sen. Sheila Harsdorf.
“There’s just minor tweaks that have to be made,” said Harsdorf (R-River Falls) Monday morning, adding that the Senate wants to be sure its actions are fiscally sound. She is a member of the Joint Committee on Finance, and the tax bill is on that committee’s agenda for this week.
Harsdorf added, “There’s a consensus to pass (tax relief). It’s just a matter of working out some of the details.”
The $505 million tax-cut package proposed by Gov. Scott Walker and passed by the Assembly Feb. 11 would “buy down” property tax levies by providing $400 million to technical colleges, said Harsdorf. That will save an estimated $131 on a typical home.
Harsdorf said she has regularly heard from district residents complaining about growing technical college property tax levies, and in past legislative sessions she has offered bills for the state to provide more funding to those programs.
The bill adopted by the Assembly would use another $100,000 to change the lowest income-tax bracket from 4.4 percent to 4 percent, saving an average of $46 per taxpayer.
Harsdorf said the governor has already directed the Department of Revenue to change the income tax withholding rates, effective in April, so workers have less taken out of each paycheck. That will leave about $520 annually in the pockets of a married couple making a total of $80,000 a year.
A separate bill proposed by Walker and adopted by the Assembly will allocate $35 million to train workers for high-demand occupations and to allow high school students to take classes at technical colleges.
That money, said Harsdorf, will be administered by the Department of Workforce Development, and the education will be employer-driven, giving workers training in areas where they are needed.
“This program is designed to be fluid and meet the employers’ needs,” she said.
The Assembly has also voted to deposit $117 million in the rainy-day fund rather than keeping it in the state’s year-end balance.
Some senators are reluctant to tie up the money in the rainy-day fund, fearing that would increase the structural deficit.
While that still has to be considered, Harsdorf said structural deficit compares committed spending to static revenues.
“We have never had no change in revenue growth,” she said. Over the past 10 years, the average growth has been 3 percent, and the average over the last 20 years has been 3.9 percent, she said.
That the state had a $911 million budget surplus and is able to cut taxes is a result of actions taken earlier by lawmakers, said Harsdorf.
“It’s indicative of the reforms that we’ve passed over the last several years and our focus on getting our fiscal house in order,” she said.
A proposed constitutional amendment to require that increases in state income and sales taxes be approved by a two-thirds vote of the Legislature cleared the Assembly on a 60-39 vote. That proposal, which would also need approval by voters, hasn’t reached the Senate yet and must be studied carefully, said Harsdorf.
The provision wouldn’t apply to tax cuts but could make it more difficult to implement tax shifts, including an idea floated by Walker to eliminate the state income tax — partially by increasing the state sales tax.
“Would that limit our ability to enact broad tax reforms in the future?” wondered Harsdorf, saying that’s a question that must be addressed.