MADISON, WI (WTAQ) – The state of Wisconsin has a projected $3.8 billion budget surplus heading towards the end of the fiscal year of ’23. But what should the state do with that money?
“Right now this is good news for the taxpayers and certainly suggests we’re in a strong position,” MacIver Institute President Brett Healy told the WTAQ Morning News with Matt and Earl. “Taxpayers in Wisconsin are going to see real money, more money in their pockets in 2022 and beyond.”
You can listen to the entire interview with Healy here:
The current surplus is $2.88 billion higher than initially anticipated.
Tax collections are up $2.5 billion, or 6.7% with corporate tax collections set to increase by nearly $1 billion, individual income tax collections up $823 million, and sales taxes raking in another $671 million.
“The federal government sent a whopping $58 billion in federal support aid to to Wisconsin businesses and individuals, institutions, government. $58 billion is unprecedented in federal aid,” Healy said. “Because that federal aid, I think you can say that the economy has done better than what we expected at the start of the pandemic. I think if you combine those two, it suggests that were in a pretty strong position economically and financially…The only question here in 2022 is if we have any storm clouds on the horizon with higher interest rates, inflations, or if the stock market is going to settle down.”
To give perspective, one year of the Wisconsin state budget typically spends about $45 billion.
But Healy also expects the heavy surplus to get political – and fast. He says the most dangerous place to be, is between a surplus and a politician.
“Legislative republicans are going to point to fact that they cut taxes in this past budget with the largest tax cut in the state’s history at $3.4 billion total,” Healy said. “Governor Evers is going to try and take credit because he signed that tax cut into law. The Republicans are quick to point out that the governor wasn’t a big fan of their tax cut proposal when it was introduced.”
Governor Evers held a press conference already Thursday afternoon announcing his ideas:
BREAKING: I just announced my plan to use part of our $3.8 billion surplus to send every Wisconsinite a $150 surplus refund to help address rising costs at the gas pump and checkout lines while reducing barriers to work by making caregiving and childcare more affordable. pic.twitter.com/7GK7EiXNV7
— Governor Tony Evers (@GovEvers) January 27, 2022
Especially with the back-and-forth of an election year, Healy expects one of the classic debates between Democrats and Republicans to be a major point in the campaigns.
“We’re likely to see nothing happening with this, again because we’re in an election year. Republicans made clear after this news that they want to keep cutting taxes, they want to be fiscally responsible, they don’t want to add more spending,” Healy said. “Because it’s an election year, I would not be surprised if Governor Evers and the Democrats come out with a massive proposal to spend most of the surplus, knowing full well that the Republicans will reject any effort to do that…I do think this is going to become part of the politics in the capitol, however in the end, nothing will get done.”
Healy says the two parties can fight all they want over who’s responsible, but we can all celebrate the fact that we have more money.
This also comes as some legislative Republicans have begun making their pitches. State Senator Roger Roth of Appleton, for example, pushed for eliminating the state’s income tax. Republican legislative leaders said Tuesday that the money would go toward tax cuts in the next budget to be written in 2023.
