Projected surplus tapped for sales tax holiday, child tax credit
Gov. Scott Walker said during the 2014 campaign: "Every year we have a surplus, which we've had the last couple years, we're going to continue to put that right back into the hands of the people who earned it, the hard-working taxpayers of this state."
When we most recently rated this promise, in 2016, our rating was In the Works. In the 2013-'15 state budget, Walker and the Republican-majority Legislature suspended a state law requiring the state to put half its surplus into the state's rainy-day fund. That allowed them to provide additional tax cuts. But there was no such surplus with the 2015-'17 state budget -- thus, nothing to return to taxpayers.
The state budget for 2017-'19 budget, which runs through June 30, 2019, should run a $385 million surplus, according to a January 2018 estimate by nonpartisan Legislative Fiscal Bureau. So, we won't know until sometime after that date whether a surplus is actually realized, but the estimate is considered solid.
In response, Walker and the Republican-led Legislature adopted in April 2018 a tax bill that included a one-time $100 per child tax rebate to parents and a one-time weekend sales tax holiday for all consumers.
Walker's move was criticized as taking some $172 million away from what could have been spent on education and infrastructure.
Noting that the $385 million is about eight days' worth of state spending, Jon Peacock, director of the nonprofit Wisconsin Budget Project, questioned whether it's wise to return the money rather than saving it for when revenue slows. Historically, he told us, the governor and the Legislature "often find themselves in the position of having to make very difficult tax and spending choices as they tackle the next biennial budget."
In sum, Walker returned to taxpayers funds from one budget surplus and has returned money from what is an expected surplus. We rate this Promise Kept.
Interview, Gov. Scott Walker spokesman Tom Evenson, Sept. 27, 2018
Email, Tony Evers campaign spokeswoman Britt Cudaback, Sept. 27, 2018
Interview, Wiscon Policy Forum research director Jason Stein, Sept. 28, 2018
Email, Wisconsin Budget Project director Jon Peacock, Sept. 28, 2018
Milwaukee Journal Sentinel, "Lawmakers pass Kimberly-Clark aid, $100 child tax credit rebate and sales tax holiday," Feb. 23, 2018
Final rating will depend on what final budget brings
This held for first budget in second term. Second budget to come.
Before Gov. Scott Walker reiterated promises to cut taxes during his 2014 reelection campaign, he was already doing just that.
Between 2015 and 2017, the impact of cuts by Walker and Legislative Republicans to sales, franchise, property and other taxes are expected to total $2.8 billion, based on a document from the Legislative Fiscal Bureau.
That's based on cuts instituted since Walker took office in January 2011, not strictly those in the current budget.
It is worth noting that well-over $500 million of tax credits in 2015-'17 are headed toward agriculture and manufacturing. But the largest cuts in terms of raw dollars are for income and property taxes.
Under an existing law, the state is required to put half its surplus into the state's rainy-day fund. Walker and Legislative Republicans suspended that the 2013-'15 budget, so that more could go to tax cuts.
Walker is on track to meet his promise, but his second term has just started -- and he still has another two-year budget to come -- so it is too early to rule this a Promise Kept.
We rate this In the Works.
A letter from Bob Lang, director of the Wisconsin Legislative Fiscal Bureau , to Sen. Scott Fitzgerald, "Tax Law Changes Since January 2011," dated August 5, 2015.
Tom Kertscher, "Scott Walker says Wisconsin reserve fund 165 times larger under his leadership," PolitiFact Wisconsin, August 7, 2015.