Governor Scott Walker called a special session of the Legislature this week to focus on a handful of proposals related to cutting taxes and reducing regulation. Governor Walker said that Wisconsin is in an “economic emergency” and that he seeks to “create a new, healthy, and vibrant climate for private sector job creation.”
Governor Walker’s proposals include:
• A tax cut for small businesses with less than $500,000 in annual gross receipts. Walker spokesman Cullen Werwie estimates the revenue effects to be about $40 million per year. The bill draft is here.
• A statutory requirement that a two-thirds majority of the Legislature be needed to increase the sales tax, income tax, or corporate income tax rates, unless the increase was also approved by a statewide referendum. The bill draft is here.
• An individual income tax credit for health savings accounts (HSAs). Wisconsin is one of four states that does not provide a tax break for tax health savings accounts. In 2009, the Legislative Fiscal Bureau estimated that eliminating state income taxes on HSAs would reduce state revenue by about $20 million in fiscal year 2012. The bill draft is here.
• A two-year waiver of corporate or individual income taxes for businesses that move to Wisconsin. The bill draft is here. We have not heard any cost estimate yet for this proposal. ***Updated on 1/10/11: According to the Legislative Fiscal Bureau, this proposal would reduce state revenue by an estimated $280,000 per year.
Walker also released proposals relating to regulatory reform, tort reform, increasing the amount of credits available under the economic development tax program, and replacing the Department of Commerce with a hybrid public-private corporation.
Wisconsin Council on Children and Families issued a press release today raising concerns about the special session tax bills. In the statement, WCCF advocated for responsible budget practices and called on the Governor and the Legislature to stop digging Wisconsin’s budget hole deeper.