GOP says eliminating Ag Tax Credit program will hurt ailing WI farmers

Todd Richmond
Associated Press
Republican lawmakers say Gov. Tony Evers plan for cutting middle-class income taxes by capping a tax credit for manufacturers and agriculture producers will hurt the state's dairy farmers who are struggling through a fourth year in a depressed ag economy.

MADISON, Wis. (AP) — A Republican plan to cut state income taxes for the middle class in Wisconsin is in trouble, with Democratic Gov. Tony Evers saying Tuesday he can't imagine signing it into law.

A joint legislative hearing was scheduled to take public comment Tuesday. Republican Assembly Speaker Robin Vos was scheduled to speak on the measure, highlighting its priority for him and the GOP.

Both Evers and Republicans want to cut taxes for the middle class, but they disagree on how to pay for it. Republicans are moving quickly on their proposal, trying to get ahead of Evers who will unveil details of his plan in the state budget later this month.

The Republican bill calls for increasing the maximum deduction by 20.6 percent for single people making less than $127,000 and joint filers making less than $155,000. The move would cost the state about $495.6 million in lost revenue over the 2019-21 biennium, according to the nonpartisan Legislative Fiscal Bureau.

Republican leaders have promised to use the state surplus to make up for the loss. Evers objects to that, saying it doesn't guarantee funding into the future.

Instead, Evers wants to pay for cutting income taxes by capping tax breaks for manufacturers and farmers. That's a non-starter for pro-business Republicans, who created the Manufacturing and Agriculture Tax Credit program that Evers wants to all-but eliminate.

Joel Kitchens

In a news conference in Green Bay, Rep. Joel Kitchens said scaling back the corporate tax credit isn't a good way to pay for Evers' proposed tax cut because of the effect on farmers.

“Milk prices are horrible. Commodity prices are horrible. This is not a good time to be increasing taxes on farmers,” Kitchens said.

Fitzgerald in a statement said he supports the goal of lowering the state's tax burden and has asked three senators to work with Assembly Republicans on developing the plan. 

"I believe we can find a solution to provide tax relief for the middle-class without hurting Wisconsin farmers like the governor originally proposed," Sen. Alberta Darling, co-chairwoman of the Legislature's budget-writing committee, also said. 

Sen. Alberta Darling, R-River Hills

The governor told reporters Tuesday, just ahead of the Republican-called hearing, that he can't support the bill because the GOP has no plan for funding the cuts long-term. The surplus dollars the GOP wants to use is needed to cover other things and his way is "far superior," he said.

"I don't think I could possibly sign a tax cut of that type where the money going forward is not there," he said.

Associated Press writer Scott Bauer, Samantha Hernandez of the Green Bay Press-Gazette and Molly Beck of the Milwaukee Journal Sentinel contributed to this report..