Wisconsin panel approves tax cut

MADISON, Wis. (AP) - Income taxes would be cut across the board, private school vouchers would expand statewide and public school spending would be allowed to increase under provisions added to the state budget in the early morning hours Wednesday.

The Joint Finance Committee approved the provisions during a marathon session that began Tuesday morning, included a 10-hour break while the deal was cut. It ended shortly after 6 a.m. Wednesday with a 12-4 vote to pass the budget. All Republicans supported it, and all Democrats voted against it.

The budget now heads to the Assembly for debate, likely in two weeks, and then to the Senate and finally Walker for his signature. Walker has the power to veto individual items.

The centerpiece of the plan is the near-doubling of the $343 million income tax cut Gov. Scott Walker proposed in February. The majority of the cut, 54.5 percent, would benefit those earning more than $100,000 a year. A taxpayer earning $45,000 a year would save $85 annually.

The budget would cut rates in all five income tax brackets and compress them to four.

The lowest bracket, for incomes up to $14,330, would be reduced from 4.6 percent to 4.4 percent. The second, for those earning between $14,330 and $28,650, would drop from 6.15 percent to 5.84 percent.

The next two brackets would be merged, so everyone earning between $28,650 and $315,460, would be taxed at 6.27 percent. That's down from 6.5 percent and 6.75 percent, for the respective brackets currently.

Lastly, the top bracket for those earning more than $315,460 would be lowered from 7.75 percent to 7.65 percent.

"We worked hard to try and build and increase the amount of tax cuts," Republican Senate Majority Leader Scott Fitzgerald said at a news conference before the committee began considering the plan.

But Democratic opponents accused Republicans of favoring tax cuts for the rich over restoring cuts to public schools made two years ago.

"We're doing this on the backs of school children," said Rep. Cory Mason, D-Racine.

The budget also expands private school vouchers statewide and increases public school spending by $150-per student in each of the next two years. That is a major departure from Walker's original plan, which allowed for no spending increase, but it's short of the $275-per student increase that Democrats wanted.

Vouchers are currently allowed only in Milwaukee and Racine, and Walker's plan would have permitted them in nine additional cities. The budget would expand them statewide and make several other changes.

"Overnight we have supersized vouchers in this state," said Democratic Sen. Jennifer Shilling, of La Crosse. "It's vouchers on steroids."

Walker worked with lawmakers on the budget deal and he said in a statement it will give parents more choices when looking for alternatives for underperforming schools.

Democrats are against expanding school vouchers, saying it diverts money from public education into a parallel system that's not as accountable to taxpayers. Republicans support it, arguing that it provides another choice for parents dissatisfied with public school but not wealthy enough to send their child to private school.

The budget caps statewide enrollment in voucher schools, other than in Milwaukee and Racine, at 500 next year and 1,000 after that. Walker wanted it to be unlimited after the second year. No more than 1 percent of a single school district's total enrollment could participate.

Walker's proposal would allow students from families earning up to 300 percent of the federal poverty level, up to $77,947 for a family of four, to enroll. The new proposal limits it to no more than 185 percent of that level, or $43,567 for a family of four.

The higher income levels currently allowed in Milwaukee and Racine would not change.

The amount of the voucher would increase to $7,210 for students in kindergarten through eighth grade starting in 2014 and $7,856 for those in high school, as Walker proposed. After that, increases in the voucher payment would be tied to how much funding goes up for public school students.

Vouchers for special-needs students, which Walker proposed, was removed as was creating a new statewide board to authorize those that approve new charter schools. Those are expected to be introduced as separate bills.

Fitzgerald said the budget would be balanced under the deal, allying concerns of some Republicans about ongoing debt.