Wisconsin budget surplus hits $977 million
MADISON, Wis. (AP) — Wisconsin's net budget surplus grew to nearly $1 billion, money that Gov. Scott Walker and Republican legislative leaders are eyeing for income and property tax cuts.
The net total surplus of $977 million was fueled by $893 million in tax collections above earlier projections, the nonpartisan Legislative Fiscal Bureau reported Thursday.
News of the surplus, expected for weeks but larger than many anticipated, will set off a feeding frenzy in the Capitol among lobbyists, special interest groups and lawmakers all trying to spend a piece of the pie.
"The additional revenue should be returned to taxpayers because it's their money, and my administration will work with the Legislature to determine the most prudent course of action," Walker said in a statement.
Walker has been talking with Republican leaders about tax cut proposals he plans to release in his State of the State speech next Wednesday. Walker's spokeswoman Jocelyn Webster said the governor wants to adjust income tax withholding tables to put more money in taxpayers' pockets immediately and is also eyeing income and property tax reductions.
Walker's getting pressure from Republican Assembly Speaker Robin Vos to use the surplus to reduce property taxes levied and collected by technical colleges in Wisconsin.
"My hope is that property tax relief will come in the form of buying down the (technical college) levy," Vos said.
Webster said the governor was still working on his proposal and didn't comment specifically on Vos's plan.
"The governor is focused on property and income tax relief and not necessarily other broad policy decisions at this point," Webster said.
A spokesman for Republican Senate Majority Leader Scott Fitzgerald did not immediately return a message seeking comment.
The 16 technical college districts in Wisconsin cover the entire state, so supplanting property tax revenue with state money would lower property tax bills for homeowners statewide. The average property tax levy this year was $1.76 per $1,000 of assessed value.
Depending on how it's structured the amount any individual homeowner would save would vary based on the value of their home and the amount of the local technical college district levy.
Replacing a portion of the technical college property tax levy with state money is the most equitable way to provide property tax relief statewide, Vos said. Technical colleges levied about $796 million in property taxes this fiscal year. That is the fourth most behind school districts at $4.8 billion, municipalities at $2.6 billion and counties at $2 billion.
Conor Smyth, a spokesman for the Wisconsin Technical College System, had no comment on Vos's idea.
"We're looking forward to learning more about what the proposal is," Smyth said.
Vos said he did not know if Walker would be proposing an income tax rate reduction in addition to changing income tax withholding tables. Changing withholding tables would result in taxpayers getting more money back in their paychecks immediately, instead of receiving a larger income tax refund. The tables have not been updated since 2009.
"I am focused entirely on property tax relief," Vos said.
Vos said replacing money generated from the property tax levy with state dollars is a better approach to property tax relief than trying to do it through the school aid formula, which he said results in winners and losers across the state.
"I want to make sure we do something that everybody in Wisconsin feels," Vos said.
The state was originally projected to have a nearly $130 million surplus as of mid-2015. That is projected to grow by $912 million, resulting in a net surplus of $977 million after $65 million is put into savings.
Of the major taxes, sales tax collections are projected to be $350 million more than original estimates, individual income by $265 million, corporate income taxes by $214 million and cigarette taxes by $52 million.