Governor Tony Evers recently delivered his fifth State of the State address before a Joint Session of the Legislature. As the Governor declared Wisconsin has never been in a better fiscal position than it is today, he outlined a few of the budget/spending priorities he is planning to include in the 2023-25 State budget.
Tax reform, and especially reducing the individual income tax will be included in the Governor’s budget proposal “when we deliver tax relief – and we will deliver tax relief – we’re going to do it responsibly by ensuring we can keep taxes low now and into the future…” During the 2022 election, the Governor indicated he would propose a 10 percent tax cut for single filers earning $100,000 or less, and also joint tax filers with incomes of $150,000 or less.
Meanwhile, Senator Devin LeMahieu, Senate Majority Leader, has introduced legislation that would establish a flat tax rate of 3.35 percent for all taxpayers by 2026. Senator LeMahieu said his “goal is to give everybody a tax cut,” using a share of the state’s estimated $7.1 billion revenue surplus. The Governor, however, called a flat tax a “non-starter,” saying “we prefer a progressive tax system that we have now.”
The Wisconsin Policy Forum recently reported state and local tax revenues fell to their lowest level in 50 years, as a result of the legislature’s tax reductions of $22 billion over the past 12 years.
The individual income tax generates nearly 50 percent of the state’s total revenue followed by the sales tax which is responsible for about 31 percent of revenue.
The Governor will introduce his budget during a budget address to the Joint Session of the Legislature on February 15, 2023.
