Walk-O-Meter

Continue to reduce the tax burden on working families and seniors every year he is in office

Continue to reduce the tax burden on working families and seniors every year he is in office.

 


Sources:

Wisconsin’s Comeback Plan, Walker campaign, July 2014

Subjects: Taxes

Updates

Promise Kept: Reducing the tax burden

Our rating was In the Works when we first examined this pledge, in January 2017, halfway into Walker's second term.

All our Tony Evers and Scott Walker fact checks in the governor's race.

 

"Working families" is not a precise term, and the leading authorities on taxes in Wisconsin told us they had not done analyses on taxes on senior citizens. But there had been a series of tax cuts to that point in Walker's second term, albeit fewer than in his first term.

At that point, the second-term cuts included an income tax deduction worth $20.9 million, starting in the 2016-'17 budget year, resulting from an increase in the standard deduction for married filers. And there was property tax relief worth $213 million, starting the same time, through a reduction in property taxes that were the result of increases in school aids and school levy tax credits.

Property taxes are particularly important to senior citizens on fixed incomes and they clearly are a big bite for working families, including renters who arguably pay them indirectly.

So, what about the second half of Walker's second term?

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Under Walker's 2017-'19 state budget, property taxes on the median value home worth $160,600 would remain at roughly $2,851 in the first year, and then would drop $22 the next year, according to the nonpartisan state Legislative Fiscal Bureau.

It's worth noting that the budget also helps more well-to-do folks. It reduces property taxes on business machinery by $74 million and eliminates the state's $8.5 million alternative minimum tax, which is mostly paid by upper-income taxpayers.

Overall, according to the fiscal bureau, there are some tax increases as well as decreases. But the net change in taxes for the 2017-'19 budget is a drop of $147.4 million during the two-year period. That far exceeds a net increase in fees of $10.6 million.

Tax increases: One of the larger tax increases — $20.3 million over the two years — results from limiting a tax credit that individuals can claim for paying taxes to other states. Also, there is a tax increase of $10.2 million by limiting which people can claim the homestead tax credit.

Tax decreases: The largest tax cut  — $180.9 million over two years  — comes from eliminating what is known as the forestry tax, which amounted to a state property tax.  Another $10 million is cut by repealing what is known as the ambulatory surgical center assessment.

Separately, there are a couple of actions outside of the budget to consider:

Walker and the Republican-led Legislature adopted in April 2018 a tax bill that included a one-time $100 per child tax rebate to parents and a one-time weekend sales tax holiday for all consumers.

In July 2018, Walker said his administration would begin collecting online sales taxes. It's estimated that will bring in $90 million in the first year. But Walker has said that whatever the amount, income tax rates would be reduced so that there is no net increase in tax revenue to the state.

Finally, another way to think about it: General fund taxes  — which includes primarily income and sales taxes, along with miscellaneous taxes  — were a total of $133.9 million less during Walker's second term as a result of tax law changes made under Walker, fiscal bureau director Bob Lang told us.

Our rating

In sum, Walker generally continued to reduce the tax burden during his second term. We rate this pledge Promise Kept.

Sources:

Email, Gov. Scott Walker press secretary Amy Hasenberg, Oct. 3, 2018

Interview, Wisconsin Policy Forum research director Jason Stein, Oct. 3, 2018

Wisconsin Legislative Fiscal Bureau, tax memo, Dec. 29, 2017

Interview, Wisconsin Legislative Fiscal Bureau director Bob Lang, Oct. 4, 2018

Milwaukee Journal Sentinel, "Gov. Scott Walker signs $76B Wisconsin budget with money for schools, fees for hybrids," Sept. 21, 2017

Associated Press, "Walker signs state budget in advance of re-election run," Sept. 21, 2017

PolitiFact Wisconsin, "Return budget surpluses to taxpayers," Sept. 28, 2018

At mid-point of term, progress has been made on taxes

Announcing his run for the 2016 Republican presidential nomination, Wisconsin Gov. Scott Walker pledged to lower the tax burden for Americans if he was elected.

That run didn't last long. But the promise echoed one Walker made in 2014 during his re-election campaign.

That pledge was: "Continue to reduce the tax burden on working families" and senior citizens in Wisconsin each year he was in office.

Next to his dramatic takedown of public employee unions in 2011, tax cuts are arguably the most-lasting impact of Walker's six-year tenure as governor and a key reason he emerged as a potential presidential contender. And those reductions are likely to be highlighted on Jan. 10, 2017, when the governor gives his annual state of the state speech.

So, turning to the Walk-O-Meter, which tracks Walker's campaign promises, has the governor continued to reduce the tax burden on working families, a term that suggests people of modest or lesser means, and senior citizens?

"The answer probably depends on how you interpret the question," said Dale Knapp, research director of the nonprofit Wisconsin Taxpayers Alliance.

For one thing, "working families" is not a precise term. And the alliance, the nonprofit Wisconsin Budget Project and the nonpartisan state Legislative Fiscal Bureau all told us they had not done tallies on working families or senior citizens.

But there's no question there have been a series of tax cuts under Walker -- albeit not as much in the years since he made the promise as in his first term.

Tallying tax cuts

While campaigning for president in August 2015, Walker said he had cut taxes by $4.7 billion since becoming governor in 2011, and we rated his claim True. The amount included billions from a manufacturing and industry tax cut in 2011, and income and property tax cuts in 2013.

We rated Mostly True his presidential campaign claim in July 2015 that because of his actions, Wisconsin "property taxes today are lower than they were four years ago." The lower taxes were due in part to declines in housing values that had only partially recovered.

But Walker's promise was made in 2014. So, what's happened since then?

More tax cuts, though not as extensive as earlier in his tenure.

Here are two made in 2015, according to an August 2016 memo from the fiscal bureau:

Income tax deduction: $20.9 million in savings, starting in the 2016-'17 budget year, from an increase in the standard deduction for married filers that was approved in 2015.

Property tax relief: $213 million, starting in the 2016-'17 budget year, through a reduction in property taxes as a result of increases in school aids and school levy tax credits made in 2015.

Property taxes are particularly important to senior citizens on fixed incomes and they clearly are a big bite for working families, including renters who arguably pay them indirectly. The property tax bill has trended downward for a typical home and is lower than when Walker took office, the fiscal bureau told us.

The tax on a median-value home (roughly $153,000) for property taxes in 2015 and payable in 2016 was $2,849, according to the fiscal bureau. That's up from $2,831 from the previous year.

But before that, the median tax had dropped each year from $2,963, the year before Walker took office.

It's worth noting that Walker's first budget, for 2011-'13, contained what the fiscal bureau classified as $49 million in tax increases.

The largest change was a reduction in the state Earned Income Tax Credit, which reduces the amount of income taxes a person owes, or enables the person to get a tax refund. Walker disputed the characterization of the credit change as a tax increase, saying that decreasing a tax credit is reducing spending, not increasing taxes.

Our rating

Walker promised while running for re-election to continue to reduce the tax burden on working families and seniors every year he is in office. Halfway into his second term, he has continued to cut taxes. We rate this promise In the Works.

Sources:

Scott Walker 2014 campaign, "Continuing Wisconsin's Comeback"

Interview, Wisconsin Legislative Fiscal Bureau director Bob Lang, Jan. 4, 2017

Wisconsin Legislative Fiscal Bureau, tax law changes memo, Aug. 29, 2016

Interview, Wisconsin Taxpayers Alliance research director Dale Knapp, Jan. 6, 2017

Email, Wisconsin Budget Project analyst Tamarine Cornelius, Jan. 5, 2017

Email, Gov. Scott Walker press secretary Tom Evenson, Jan. 4, 2017