The Legislature’s budget committee passed an income tax cut this week that could hurt Wisconsin’s ability to support a high-quality public education system, while doing very little to create jobs.

The proposed tax cut would take resources away from public services – like our neighborhood schools – that are crucial to building the foundation for future economic growth. The tax cut is expected to reduce state income tax revenue by $651 million over two years, and doesn’t count a tax deduction for private school tuition that would reduce tax revenue by another $30 million a year, starting in the second year of the budget period.

Wisconsin schools have already been hard-pressed to continue to provide the excellent public education that Wisconsin students deserve. Wisconsin’s school funding cuts have been among the nation’s largest, and the number of teachers in Wisconsin classrooms has dropped by more than 3,000 over the last three years. More than half of districts have increased classroom size in order to compensate for reductions in state support. If the full Legislature approves the income tax cut, there will be fewer resources for Wisconsin’s schools, and the trend of fewer teachers and larger classrooms is likely to continue.

Another concerning aspect of the proposed income tax cut is that the highest earners receive most of the benefit, while many low-income taxpayers receive no benefit at all. There is a whole post on this topic at the Wisconsin Budget Project blog, but here are some of the highlights:

• More than three-quarter of a million low-income taxpayers would receive no benefit from the tax cut. If the legislators wanted to provide a tax cut to the taxpayers with the lowest incomes, they could reverse cuts made to the state’s tax credit for working families with children, or a tax credit that helps keep property taxes low for low-income people.
• 55% of the benefit of the tax cut would go to people earning more than $100,000 a year.
• The proposal collapses two tax brackets together, so that couples earning $29,000 would be in the same tax bracket as couples earning $315,000.

Unfortunately, the proposed tax cut is unlikely to create jobs in Wisconsin. History has shown that states that cut income taxes lag the rest of the country in economic growth. The proposed income tax cut won’t create the good jobs Wisconsin needs, but it will undermine the state’s future by making it harder to invest in public education and other services that contribute to a strong economy.

Tamarine Cornelius