The decision by Governor Tony Evers to veto three Republican-backed tax cut bills this past summer has reignited debate over Wisconsin’s fiscal policy. Despite a sizable state surplus, taxpayers, particularly the middle class and seniors, are paying higher taxes while grappling with rising inflation. Evers’ vetoes, which targeted measures designed to reduce the tax burden on middle-income earners, retirees, and married couples, have been met with strong criticism from Republican lawmakers.

Wisconsin’s financial situation stands in stark contrast to the struggles faced by its residents. According to the Department of Administration, the state will end the 2024 fiscal year with a $4.6 billion surplus, and projections for 2025 estimate another $3.13 billion surplus. Yet, as the state celebrates its strong fiscal position, many Wisconsinites are seeing their incomes eroded by inflation and higher taxes. Seniors in particular are finding their retirement incomes increasingly strained, with Evers rejecting a proposal to exempt up to $150,000 in retirement income from state taxes.

Evers defended his vetoes, arguing that the tax cuts would jeopardize the state’s ability to fund critical services, including education and public safety. He warned that the proposed reductions could lead to significant budget shortfalls in the future, forcing the state to dip into its rainy-day fund. However, opponents of the vetoes, like Republican Senator Rachael Cabral-Guevara, argue that Wisconsin’s retirees and middle-class families need immediate relief, especially in the current economic climate.

The vetoed bills included measures that would have lowered the state income tax for individuals earning between $28,640 and $112,500, provided tax breaks for retirees, and expanded the marriage tax credit. These cuts were designed to ease the tax burden on those earning less than $150,000 annually, a group Evers himself has previously defined as middle class. Despite these efforts, Evers dismissed the bills as fiscally irresponsible.

The tension between maintaining a healthy surplus and offering tax relief highlights a growing divide in Wisconsin’s fiscal policy. While the state’s rainy-day fund reaches a record high of $1.9 billion, taxpayers continue to face high inflation, with everyday costs for food, housing, and healthcare rising steadily. For many middle-class families, the lack of tax cuts means less disposable income at a time when every dollar counts.

The governor’s veto messages are available below.

Veto Message for Assembly Bill 1020

Veto Message for Assembly Bill 1021

Veto Message for Assembly Bill 1022