"Once our Blueprint for Prosperity is signed into law, we will have delivered $2 billion" in tax relief.
Scott Walker on Tuesday, March 4th, 2014 in a statement to reporters
Gov. Scott Walker says he has generated $2 billion in tax cuts
Gov. Scott Walker likes to say he "loves" taxpayers.
In early March 2014, he counted the ways and declared he’s given Wisconsin taxpayers 2 billion reasons to love him back.
"The hardworking taxpayers of Wisconsin know how to spend their money better than politicians in Madison do, so I thank members of the Senate for helping us return the state’s surplus to the people who earned it," Walker said in a statement for reporters after his latest tax-cut plan won approval in the Senate.
He added this: "Once our Blueprint for Prosperity is signed into law, we will have delivered $2 billion in much-needed tax relief for the people of Wisconsin and more than $135 million for worker training programs."
That $2 billion number is likely to be repeated quite a bit during Walker’s re-election bid this year. So we decided to check it out.
Is Walker right?
It’s clear from the statement that Walker is talking -- at the very least -- about the effect of tax changes enacted during his time in office, including in the four years covered by two budgets he’s signed. The second budget runs through June 2015, six months after Walker’s term expires.
The four-year time frame means Walker is lumping into his claim the future effect of some of the tax cuts.
But he made it obvious that he was talking about a tally of tax relief that will come come as a result of the actions of this term.
The tax-relief number
There’s more than one way to get to a bottom line, but we found that Walker’s claim is within $100 million -- high or low -- depending on various factors.
Walker’s office sent us a tally of more than 65 tax changes -- mostly cuts, and a few increases -- enacted by legislators and Walker from 2011 to present, including measures from the two budgets.
The state budget office calculated the tax relief total at $1.98 billion. Due to some methodology differences, the state Department of Revenue put the total at slightly over $2 billion, according to the spreadsheet provided by Walker’s office.
The nonpartisan Legislative Fiscal Bureau’s director, Bob Lang, and the agency’s tax policy supervisor, Rob Reinhardt, reviewed the list at our request.
They put the total at closer to $1.9 billion.
"It’s right around $2 billion," Lang told us.
So the figure holds up.
The tax relief total, we should note, is not a hard number. It can’t be, because it includes estimates of how much tax relief will flow over the course of four-plus years from various measures. And it includes various projections.
But that is a routine practice in Madison math and a reasonable way to make a tax-relief claim.
Where it came from
Most of that total came from moves that drew big headlines, including two separate cuts in income tax rates, multiple property tax relief measures, and phasing out the state tax on the production earnings of manufacturers and agricultural businesses.
Others measured were more narrowly tailored or were overshadowed by other events. They included business tax credits for job creation, various tax cuts for business and a host of technical or small-bore changes including several new sales tax exemptions.
Remember the sales tax exemption approved for manufactured homes? Or the one on the sale of oil and fat converted to motor fuel? Or the exemption for printers?
We didn’t think so.
The income tax cuts alone account for about $750 million in estimated relief, and property tax relief another $500 million. The Walker figures do not include changes in withholding rates that will make sure tax cuts show up in paychecks rather than requiring people to seek refunds to see the benefit.
How relieving is all this tax relief?
State and local taxes totaled $27.4 billion in 2013. A year’s worth of the four-year relief Walker is talking is about $500 million. So, the relief amounts to about 2 percent of total taxes, says Dale Knapp, research director at the Wisconsin Taxpayers Alliance.
Individual results would vary, of course.
Finally, Walker administration officials argued that Walker would have been justified in using $2.5 billion as his tax-relief figure. He kept in place and funded several phased-in tax-cut measures put in place during his predecessor Jim Doyle’s last term, spokesman Tom Evenson noted.
We’ll confine our ruling here, though, to the $2 billion claim.
Walker declared that once his latest tax-cut plan is signed, "we will have delivered $2 billion in much-needed tax relief for the people of Wisconsin."
Some of this is best guesswork, but estimates from multiple sources -- including the nonpartisan office used by the Legislature -- confirm the figure is right around that number.
We rate Walker’s statement True.
Note: This item was changed after publication. It originally said the Fiscal Bureau's estimate included the effect of changes to the Earned Income and Homestead tax credits.