What to do with Wisconsin's $3 billion surplus? One senator wants to give everyone nearly $1,000

 

KENOSHA, Wis. (CBS 58) -- Wisconsin has a surplus of more than $3 billion, and the state's top leaders can't agree on what to do with it. One state senator insists he's come up with the perfect compromise: Send every taxpayer a check.

State Sen. Robert Wirch (D-Somers) put a bill into circulation this week that would divide the surplus among each of the state's income tax filers. Under Wirch's proposal, individual taxpayers would get a one-time rebate of $982 while married joint filers would get $1,964.

Wirch said in an interview Thursday he came up with the idea on his own.

"I drove through the McDonald's line, and the lady that gave me my coffee and a Egg McMuffin, I thought, 'My God, if this woman could get $1,000, that would be great!'" Wirch said.

State Sen. Robert Wirch (D-Somers) believes one-time checks for all taxpaying residents is the best use of Wisconsin's surplus.

Wirch's district includes Kenosha, and as one might expect, people here were on board with the idea of the state sending them a check.

"We got lucky somehow. Business was better and more tax receipts, and we got a surplus," Bob Baruskok said. "But at the end of the day, it's our money. I think everybody should get one-thousands bucks."

For others, the one-time payouts would help them close in on some of their savings goals.

"Pay my bills, a couple of my bills that I need to pay off," Gabriel Nunnery said. "Put something together to try to get me a car with some of the money that I have."

Under the proposal, part-time and out-of-state residents would not qualify for the rebate checks, even if they pay some income taxes in Wisconsin.

Wirch's bill is unlikely to become law. Republicans in charge of the Legislature have pursued a series of tax cuts. This week, the Assembly sent a series of proposed cuts to the desk of Democratic Gov. Tony Evers.

Those bills include an income tax cut targeted toward people making less than $150,000 per year. The GOP bills also included exemptions on retirement income and increased tax credits for child care and married couples.

At the same time, Evers has pushed for the Legislature to put much of the surplus toward guaranteeing long-term state aid for child care providers and launching a paid family leave program.

Wirch said he believes the rebate plan is a fair compromise.

"I respect the governor's plan, but we have a history of the two sides not working together," he said. "And I'm hopeful that I can get the public involved in this 'give the money back' [proposal] to force both sides to adopt a plan."

However, Wirch said his proposal for one-time payouts hasn't gotten a warm reception from his colleagues on either side of the aisle.

"Candidly, they've kind of looked at me like I'm from another planet because they're not used to giving money back to the taxpayers," Wirch said. "Democrats and Republicans are kind of looking at me in a strange way on this proposal."

Are rebates the best use of a surplus?

UW-Milwaukee Associate Economics Professor Scott Drewianka said he doubted one-time payouts would be the most effective way to use the state's surplus.

"A $1,000 check for many people is almost no real difference," Drewianka said. "They're gonna put it in the bank or they're paying off a credit card. That's good, but it's just kind of where it ends."

Drewianka said the proposal would undoubtedly make a difference for people scraping by, but added the majority of taxpayers would likely save much of their rebate, limiting the impact on local economies.

"It would certainly help if it stops somebody from declaring bankruptcy," he said. "But for most people, that's probably not what's happening."

Drewianka said it might be wiser to leave at least some of the surplus in place as additional cushion should a future economic downturn put the state in a bind. 

Wirch instead pointed to Wisconsin's separate 'rainy day' fund, which currently has about $1.8 billion. He said that amount was a perfectly good protection plan, and Wirch also insisted his rebate proposal was the fairest way to use up the $3.2 billion surplus.

"And it's the simplest way, too," he said. "Where's the cutoff point? We [would] have to argue about that. Where's the cutoff point, and who gets it and who doesn't get it? This is the simplest way, I think."