Wisconsin Taxpayers Set to Receive Over $1 Billion in State and Local Tax Relief

Thursday, July 20th, 2023 -- 10:01 AM

(Tyler Katzenberger, Milwaukee Journal Sentinel) Wisconsin taxpayers are set to receive over $1 billion in state and local tax relief over the next two years from the latest state budget, according to a new report from the Wisconsin Policy Forum.

According to Tyler Katzenberger with the Milwaukee Journal Sentinel, the report, released early Thursday morning, found the $99 billion two-year state budget signed into law by Gov. Tony Evers earlier this month delivered historic aid increases to local governments and raised state spending by the highest rate this century while simultaneously cutting state and local taxes and preserving much of the state's rainy day reserves.

"State officials used an unprecedented nearly $7 billion surplus to do in the 2023-25 budget what once would have seemed impossible: combine the largest increase in funding for public services in three decades with a relatively substantial package of tax cuts," researchers wrote in the report.

Total state spending over the next two years rose 11.7%, approximately twice the size of spending increases approved in the past two state budgets under Evers. The state at the same time retained $5.9 billion in reserves, including $1.8 billion in the state's rainy day fund and just over $4 billion in funds from a record-high budget surplus of nearly $7 million heading into the latest budget cycle.

In all, spending will exceed tax revenues by about $2.8 billion over the next two years. It's the state's first spending deficit after several years of substantial surpluses, though the increase is less than half of the funding increases projected under the budget plan from Republicans on the state's budget-writing committee and Evers' original executive budget from February.

Much of the surplus money retained in the final budget came from Evers' decision to veto a GOP-proposed tax cut for Wisconsin's second-highest tax bracket, which covers married filers who earn between $36,840 and $405,550. Evers' partial veto reduced the average tax cut per filer from $405 to $25 for a 95% reduction in overall tax spending.

The move slashed tax relief for middle and especially upper-class Wisconsinities but retained over $3 billion in surplus funds, the report found.

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