Wis. Gov. Walker calls for income tax cut

Published on NewsOK Modified: February 21, 2013 at 8:03 am •  Published: February 21, 2013
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The rate cut would be permanent and not phased in over time as Walker had previously said he was considering.

The budget cuts income taxes, includes no general sales tax increases, and continues local government and school district spending limits that Walker said would hold increases on property tax bills for the median-valued home to no more than 1 percent a year.

Walker's budget keeps spending limits for schools in place, while state aid to schools will go up about 1 percent. That money will go toward keeping local property taxes down, not more spending on schools. This has angered Democrats and public school advocates, especially since it comes on the heels of an $800 million aid cut and a 5.5 percent reduction in spending authority in the last budget.

Steve McNeal, superintendent of the Beloit School District, blasted Walker's proposal as not doing enough to help districts like his that have already made millions in cuts.

"The low-hanging fruit is gone for us," he said. "We've pulled every rabbit out of the hat."

His proposal also calls for cutting income eligibility for poor adults in the state's BadgerCare program from 200 percent of the federal poverty level to 100 percent. While he's also lifting an enrollment cap for childless adults, the net effect of the changes will be a drop of about 5,400 people in the Medicaid program.

Walker estimates that about 224,600 currently uninsured people will access federally subsidized private insurance coverage through the marketplace known as an exchange, which is scheduled to begin operating in 2014. He called for those changes instead of accepting money from the federal government under President Obama's health care overhaul law to pay for expanding Medicaid eligibility to cover 175,000 additional people.

Walker's Medicaid proposal and other parts of his budget are shaped by his desire to run for president in 2016, said Scot Ross, director of the liberal advocacy group One Wisconsin Now.

"Wisconsin's middle class needs a balanced approach that targets tax relief to them and invests in long-term growth strategies and services they need like public education and health care," Ross said.

Walker also is rejecting the recommendations of a task force created in his last budget that studied ways to plug a projected $2 billion funding gap over the next decade for road maintenance, repair and other transportation projects.

That group, headed by Walker's own secretary of the state Transportation Department, recommended a gas tax increase, fee hikes and other changes to provide long-term growth and stability to pay for roads projects. None of their recommendations are in Walker's budget.

Instead, Walker said he would look into selling the state's power plants and other assets to pay off bonds for transportation projects such as the Zoo Interchange near Milwaukee. Prisons, state parks and other land that has protections in the law from being sold would not be considered for sale.

Walker's budget would end with a $43 million positive balance, but unfunded commitments would total $188 million. Using more comprehensive private-sector accounting measures, the so-called structural deficit after two years would be $2.6 billion.



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