Assembly Speaker Robin Vos Thursday praised a deal he reached with Scott Walker to overhaul the guv’s child tax credit and add a sales tax holiday, saying it was a creative way to boost the economy.
But Senate Majority Leader Scott Fitzgerald, who was not part of the agreement announced this morning, was non-committal about its prospects with his caucus. GOP senators meet next week to discuss priorities for the remainder of the session.
The Juneau Republican acknowledged some Senate Republicans had an issue with the sales tax holiday Walker originally included in the 2017-19 budget, but lawmakers nixed it. Fitzgerald said that dynamic may have changed now that there’s a $385 million surplus projected by mid-2019.
“I don’t want to discount it outright and say we’re not going to get there,” Fitzgerald said.
The Vos-Walker agreement calls for making the $100-per-child credit a one-time rebate with checks going out in July. It would be accompanied by a one-time sales tax holiday on the first weekend of August and apply to most purchases of $100 or less.
Walker originally called for a $100 per-child credit that would be a sales tax rebate in 2018. It would then be an income tax credit in future years. Some Republicans, though, have questioned that approach, noting the original proposal would create an income tax credit even for those with no liability. Critics also worried about using $122 million for a credit that would impact 672,000 households out of 3.2 million in the state.
The revision adds $50 million for the sales tax holiday to the $122 million price tag for the per-child credit.
The guv’s office said the exemption would not apply to: the sale of taxable services, prepared food, motor vehicles, motor vehicle parts, tangible or intangible property used to access telecommunications services, tangible or intangible property provided by a utility, or alcohol and tobacco products.
Dems slammed the proposal as a gimmick to curry favor with voters, and Senate Minority Leader Jennifer Shilling, D-La Crosse, questioned if it would clear the Legislature since Senate Republicans weren’t part of the deal.
Assembly Minority Leader Gordon Hintz, D-Oshkosh, said Walker was trying to prop up his re-election prospects with a one-time “kickback.”
“This is an election-year bribe,” Hintz said. “The governor might as well save money on postage and just hand these checks out at polling places in November.”
Some Republicans have dismissed past sales tax holiday proposals as gimmicks. But Vos defended pairing a sales tax holiday with the rebate checks. He said the combined proposal would mean all Wisconsinites would see a benefit rather than just those with minor children. What’s more, the checks arriving right before the holiday would maximize the impact of not charging the sales tax before families buy back-to-school supplies.
“Frankly, I am OK with any opportunity we that have to reduce the taxes that people pay in Wisconsin because we are overtaxed, period,” Vos said. “I think this is a creative way to stimulate the economy.”
Fitzgerald said part of Tuesday’s caucus discussion will include what items his members believe the state can afford to commit to from the $385 million surplus.
Along with the $172 million price tag for the sales tax rebate and holiday, Walker wants to direct $50 million to a new rural economic development fund, among other priorities.
Fitzgerald said as a fallback, his caucus is drafting the child credit in a bill that would not include the sales tax holiday.
The deal Vos and Walker announced Thursday will be co-authored in the Assembly by GOP Reps. Kevin Petersen, of Waupaca, and John Macco, of Ledgeview.
Fitzgerald also said his caucus is looking at other changes to the package of bills Walker has laid out in recent weeks. That includes a sunset on the reinsurance program the guv has proposed to stabilize premium increases in the individual market through the Affordable Care Act.
Listen to his comments: