MADISON, WI (WTAQ-WLUK) – An area lawmaker says the time is now to eliminate the state’s income tax.
Appleton Republican State Sen. Roger Roth says the time is right because Wisconsin is now projected to have a $3.8 billion surplus at the end of this budget cycle. That’s $2.9 billion more than expected, according to the projection released Tuesday by the Legislative Fiscal Bureau.
Roth has been working the past six months on a bill to eliminate the state’s income tax and tells FOX 11 it could be formally introduced next week.
“When you look at all the states that are growing right now, they don’t have a state income tax.”
Wisconsin would join nine other states without income taxes. Others include South Dakota, Tennessee, Florida, and Texas.
“Wisconsin has a demographic problem, people leaving the state,” said Roth. “We’ve got to do things to incentivize individuals, millennials, families to come and live and grow and expand their families and businesses in Wisconsin.”
Roth says the state collects about $17 billion in income taxes every two-year budget cycle. His bill would come with revenue triggers, meaning as the state has surpluses, the extra revenue would be put toward eliminating the income tax gradually until it is gone.
“It lets the people of Wisconsin know that we are on a path to eliminate it.”
Roth says he’d be ok putting the entire surplus toward the effort. However, he also said he’d like to make sure there’s enough money for a bill that would keep struggling restaurants from having to pay $27 million in taxes on federal grants from the Restaurant Revitalization Fund.
Roth admits he hasn’t fully roped in his party’s leadership on his proposal.
“I think that they are aware that we are working on thisbut I haven’t had conversations to see where they are on it,” said Roth.
On the budget surplus, Senate Majority Leader Devin LeMahieu says much of it is a result of a one-time influx of federal money and the money should focus on future tax relief in the next budget.
Governor Tony Evers says, “Wisconsinites need help making ends meet and can’t wait until the next biennial budget—they need relief now.”
“I don’t think it has to be one of the other,” said State Rep. Kristina Shelton, D-Green Bay.
Shelton tells FOX she’s keeping all options open right now.
However, she says $380 million of the surplus doesn’t carry federal requirements and could help fast track proposals like her bill to fix Green Bay’s Nitschke Bridge.
“I think that is a really great way that we can prioritize some low hanging fruit of areas of agreement across the bipartisan aisle.”
The save it or spend it debate is expected to continue as both sides look to sway voters ahead of the November election.
Editors Note: This story has been updated to reflect that South Dakota, another midwestern state, does not have a state income tax. A previous version incorrectly stated that if Wisconsin were to eliminate its income tax they would be the first in the midwest to do so.
