Democratic Gov. Tony Evers said he is "hopeful" he can reach an agreement with Republicans in the Legislature's majority on how to pay for a proposed middle-class tax cut, but Assembly Speaker Robin Vos, R-Rochester, said it's up to Evers to determine whether that can happen.
Republicans in the Assembly voted Tuesday on party lines, 61-33 to send their version of the tax cut to the Senate, which is expected to take it up Wednesday. Evers, talking to reporters before the vote, would not say whether he would veto the Republican plan, but he was sharply critical of it in a series of tweets.
Evers campaigned on cutting taxes for middle-income earners by 10 percent, a move he pledged to fund by capping a tax credit that effectively eliminates the state income tax for manufacturers and agricultural producers. A newly-proposed Democratic plan would cap the credit only for manufacturers.
Democrats have criticized the manufacturing and agriculture tax credit as a giveaway to millionaires, but supporters of the credit have argued it has allowed businesses to invest in workers and equipment.
Arguing Evers' plan would amount to a tax increase on manufacturers and farmers, Assembly Republicans introduced a middle-class tax cut proposal of their own last month, which would be funded entirely by the state's budget reserves.
Evers and Democratic lawmakers don't support the Republican plan because they say it doesn't have a sustainable, long-term funding source.
"Of course we always look for common ground, but we believe our proposal is the best one," Evers told reporters Tuesday before the Assembly convened.
Rep. John Nygren, R-Marinette, who co-chairs the Legislature's budget committee, said he was disappointed to see Evers "drawing a line in the sand" on the issue.
The Democratic proposal would draw $348.2 million from budget reserves over its first two years. The Republican plan would draw $495.6 million from that same pot of money over the same period, a difference of $147.4 million, according to a preliminary analysis by the nonpartisan Legislative Fiscal Bureau.
As of June 30, the state's primary spending account had a positive balance of $588.5 million, according to the LFB. That surplus is projected to grow to $691.5 million by the end of this fiscal year, based on cash accounting.
The Democratic proposal would also expand the state's Earned Income Tax Credit for low-income individuals.
Evers did not say whether he would veto the Republican proposal if it lands on his desk in its current form, but said he couldn't see "how we can possibly use all the surplus for this and then essentially ignore the rest of the budget."
Republican lawmakers noted Tuesday that the Democratic proposal is also not fully funded, and reiterated that any proposal that increases the tax burden on farmers or manufacturers would be a non-starter for them.
If the Senate approves the legislation, it would be the first bill to land on Evers' desk.
Vos said it will be up to Evers to decide whether to "keep a campaign promise" or act politically.