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Wis. property tax cut proposal clears committee

Scott Bauer, Associated Press

MADISON, Wis. (AP) -- Wisconsin Gov. Scott Walker's $100 million property tax cut proposal won bipartisan support in the Legislature's budget committee on Tuesday, easily clearing its first hurdle as it speeds through the process with the aim of reductions appearing on bills this December.

No one testified at the public hearing before the Joint Finance Committee, which concluded just a couple hours before the Senate was scheduled to vote on passing the bill. Republicans control the Senate 18-15, and Democratic Minority Leader Chris Larson said Monday he expects most Democrats will support it.

Democrats on the budget committee complained about the size of the tax cut, which will reduce taxes on the typical home $13 this year and $20 next year, saying it was insignificant and comes at the expense of other needs like public education and road repair.

Democrat Sen. Jennifer Shilling said the tax cut would only pay for about half a tank of gas for her drive back to La Crosse. She called it a symbolic reduction.

Still, she and the three other Democrats on the budget committee jointed with all 12 Republicans in voting for it.

"Some might mock this being a relatively modest reduction in property taxes," said Republican committee co-chair Rep. John Nygren, of Marinette. Still, he said it was better for the state to give it back to taxpayers than spend it.

"I'm going to side on the side of taxpayers every single day and give it back to them," Nygren said. "This is a prudent step."

Even under the cut, property taxes are still projected to increase by $11 — from $2,943 to $2,954 — in two years for the typical home. The actual amount people pay varies widely across the state.

Once the property tax measure passes the Senate, the proposal goes to the Assembly which was to take it up Thursday. Walker unveiled the property tax cut proposal last week, three days after Democrat Mary Burke announced her run for governor. Walker wants to sign the tax cut into law by the end of the week.

Consideration of the tax cut came a day after Walker's administration released new budget figures that showed Wisconsin ended the 2013 fiscal year in June with a $759 million surplus. That was $89 million more than expected at the time the budget passed.

That good news was tempered with an analysis from the nonpartisan Legislative Fiscal Bureau on Tuesday showing that the state's projected budget shortfall in 2015 will grow by 33 percent with passage of the property tax cut and other worker training bills Walker supports.

Even so, the projected $725 million structural deficit lawmakers would face at the beginning of the 2015 two-year budget cycle would be half or less of the shortfalls faced at the beginning of every budget going back to 1997. Last year, the budget began with a $146 million surplus but two years ago it began at $2.5 billion and grew to $3.6 billion.

Under the property tax proposal, the $100 million would be funneled through the state aid formula for schools, which are largely funded from the state and local property tax revenue. But without a requisite increase in schools' spending authority, the money would instead go toward lowering local property taxes.

A Fiscal Bureau analysis showed that taxpayers in some school districts around the state would be better off than others. The average increase in aid statewide is just under 1 percent. La Crosse would get $395,000 more, for a 1.4 percent increase, while Green Bay would see just a 0.6 percent increase, or about $829,000 more. Wausau would receive 0.8 percent, or $394,000 more, while Eau Claire would be just above the average at 1 percent or $590,000.