Yesterday Governor Evers signed the 2023-2025 Wisconsin State Budget – but not without significant use of his line-item veto pen. As mentioned in an earlier blog, the Wisconsin Governor has the most powerful veto pen in the country. Not only can he veto entire bills, when tax dollars are appropriated, the Governor can veto digits, words, or full sections of the budget.
In this case, Evers used his pen to slash the income tax cut approved by the legislature and massively increase property taxes. As the result of his veto of the income tax cut, the projected overall tax reduction goes from $3.5 billion to $175 million. Additionally, he vetoed the requirement that DOR update the withholding tables to reflect the tax cut in paychecks.
On property taxes, the original budget allowed school districts to raise property taxes through the 2024-2025 school year. By vetoing a few digits in the years, school districts can now raise property taxes by $325 per pupil every year through 2425.
Expect the legislature to attempt to override some of the vetoes, but Republicans are a few votes short in the Assembly of the required two-thirds vote, and Democrats will not vote to embarrass their fellow partisan in the Governor’s office.
The veto of the income tax cut leaves over $3 billion in the state’s general fund unappropriated and sets up another large surplus going into the next budget. That number will change as the economy contracts or grows over the next two years, but places the state on solid financial footing should we enter a deeper recession.
