Evers promises a tax cut, compromise to increase funding

Gov. Tony Evers laid out his plans for a tax cut during his 2023 State of the Union address.
Published: Jan. 24, 2023 at 3:22 PM CST|Updated: Jan. 24, 2023 at 10:36 PM CST
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MADISON, Wis. (AP) — Democratic Gov. Tony Evers announced Tuesday he wants to work with Republicans to divert as much as 20% of the state’s sales tax revenue to help fund local communities, including police and emergency services, while he also promised to cut taxes for the middle class and fight a GOP effort to impose a flat income tax rate.

Evers, in his fifth State of the State speech and the first of his second term, pledged to compromise with Republicans who control the Wisconsin Legislature in order to increase funding for schools and local governments. All of the spending proposals Evers announced will be in competition for a state budget surplus that is projected to be near $7 billion.

The Legislature will spend the next five months dissecting Evers’ proposals before passing their own version of the state budget. Evers releases his full spending plan in three weeks, but he highlighted priority areas in his State of the State speech delivered at a joint meeting of the Senate and Assembly.

“Let’s find common ground,” Evers said in announcing his willingness to get behind diverting sales tax revenue for counties, cities, towns and villages. It marked the first time Evers had publicly gotten behind the idea that Republican legislative leaders have been talking about publicly for weeks.

One theme of the governor’s speech centered around the Badger State’s youngest residents.

“Doing what’s best for our kids has always been what’s best for our state,” Evers said. “And, today, we can afford to do more.”

Evers pledged to target $20 million to increasing literacy-related programs and creating evidence-based reading practices statewide. He also said he plans to put $20 million into teacher recruitment and retainment.

The governor also vowed to invest $30 million in tax relief to expand the child and dependent care credit, plus setting $22 million aside into the Partner Up program to expand collaborations between employers and child care providers. This is a wish list item State Sen. and mom of four Melissa Agard (D-Madison) said could unite both sides of the aisle.

“That’s not a mom thing or a dad thing, not a Republican thing or a Democratic thing, that’s just who we are,” Agard said.

2023 State of the State Address Wisconsin
2023 State of the State Address Wisconsin(NBC15)

Evers said changing how local governments are funded by tying so-called shared revenue to sales tax revenue will ensure payments increase after decades of little growth or cuts. Evers said his plan would direct more than $500 million per year to local governments.

Evers previously called for a 4% increase in shared revenue funding for each of the next two years, a total of about $91 million. Evers appeared to be supportive of a plan Republican legislative leaders have discussed that would use 1% of the state’s 5% sales tax for shared revenue.

“The bottom line for me has always been making sure our communities have the resources they need to meet basic and unique needs alike,” Evers said. “But there are a lot of different ways we can find compromise to achieve that goal, and together we will.”

Evers has met with Republican Assembly Speaker Robin Vos and Senate Majority Leader Devin LeMahieu privately since his reelection win in November, a noticeable thawing of their icy relationship from his first term when they rarely spoke. Both sides have shown some signs of being willing to compromise on some issues, like local government funding.

Speaker of the Assembly Robin Vos watches as Wisconsin Gov. Tony Evers speaks during the annual...
Speaker of the Assembly Robin Vos watches as Wisconsin Gov. Tony Evers speaks during the annual State of the State address Tuesday, Jan. 24, 2023, in Madison, Wis. (AP Photo/Morry Gash)(Morry Gash | AP)

They’ve been farther apart on others, like abortion and tax cuts.

Following Evers’ speech, the major concern from Republican leadership was over spending. Going into the evening, Republican leaders asked for tax cuts and a plan that offered common ground.

In an interview with WisconsinEye Tuesday afternoon ahead of the speech, Vos and LeMahieu said they hoped Evers would offer more room for bipartisan compromise than he did in his inaugural address.

“He talks out of one side that he wants to work together but continues to push a lot of ideas that are non-starters for us,” LeMahieu said.

Evers, in his speech, reiterated his support for targeting tax cuts to the middle class. Republicans are backing a flat tax plan that would reduce rates for the state’s wealthiest filers and move to a flat 3.25% rate in four years. Evers called that plan “reckless.”

“One side wants to increase the size of government, the other side wants to make targeted smart investments but doing it in a way that maximizes returning money to the taxpayers so that will be the topic that we discuss over the next six months,” Vos said.

Republican officials called the surplus and impermanent resource that the governor wants to constantly draw from, creating issues down the road.

“The surplus we have is one-time money and it seems the governor tonight is planning on spending that one-time money on ongoing expenses which is going to put us in a massive deficit, which frankly is what his first two budgets would have done if we hadn’t fixed them the first time around,” said Rep. Tyler August (R- Lake Geneva)

Gov. Tony Evers delivers his 2023 State of the State address, on Tues., Jan. 25, 2023.

Evers also declared 2023 the “Year of Mental Health,” saying the state’s new suicide and crisis lifeline received 6,000 calls in its first month in July. He will propose spending about $500 million to expand access to mental and behavioral health services across the state, including efforts to reduce suicides and other mental health-related issues.

Evers also called for spending $100 million to combat pollution from so-called forever chemicals known as PFAS. He said the money will be used to increase PFAS testing, sampling, and monitoring statewide.

The pollutants are man-made chemicals that don’t easily break down in nature. They’re found in a wide range of products, including cookware, firefighting foam and stain-resistant clothing. The chemicals have been linked to health problems including low birth weight, cancer and liver disease, and have been shown to make vaccines less effective.

Evers also announced an array of grant programs and other initiatives targeting small businesses; workforce development, with a focus on healthcare workers; child care tax credits; and clean energy.

Evers won a second term in November and has vowed to push issues that polls have shown a majority of Wisconsin residents support, like increasing funding for schools, legalizing marijuana, repealing the state’s 1849 law banning abortion and expanding the state’s Medicaid program. Those issues have historically been backed by Democrats, but largely opposed by Republicans who have held the majority in the Legislature since 2011.