Wisconsin Gov. Evers tweaks his stance on repealing business tax

On July 8, 2021, Gov. Tony Evers vetoed a Republican-backed bill to eliminate the personal property tax, which is levied on businesses for their equipment and furniture. Businesses are against the tax because of its cost and because of the paperwork required to comply with it.

Two months after the veto, on Sept. 22, 2021, Democrat Evers endorsed a Democrat-backed bill to eliminate the very same tax.

So, the governor now backs a bill to eliminate a more than 170-year-old tax, after earlier vetoing a measure eliminating the tax. 

Republicans quickly tagged Evers as a flip-flopper, or at best being hypocritical, since he already had a prime chance to achieve the goal -- an extreme rarity in this period of headbutting with the Republican Legislature.

That prompted us to turn to the Flip-O-Meter, and with it our requisite reminder: We are examining whether a politician has been consistent over time, not whether any change is good policy or good politics.

In this case, it’s more complicated than it seems.

Evers does not have a long history with the personal property tax. For instance, he did not campaign in 2018 on eliminating it -- as he did on cutting taxes for the middle class. And Republicans did not put bills to eliminate the tax on his desk in the first years of his term. 

So, our evidence is largely the debate around this single bill, which was sent to Evers in tandem with the state budget for 2021-23. Thanks to a windfall of $4.4 billion in unexpected revenue, Republicans were able to approve a budget that included more than $2 billion in tax cuts, primarily by reducing the state income tax.

Evers, for his part, said that tax cut was not perfect -- he wanted it to be more progressive, offering more relief to lower wage earners. But he still signed the budget, he immediately touted that imperfect tax cut as fulfilling a major campaign promise.

On the business-related tax, Evers took a different approach. And that factors into our analysis here.

Getting rid of the personal property tax would save businesses — and cost the state — an estimated $245 million a year.

Unlike some other measures that have landed on Evers’ desk, this one included some back-and-forth beforehand, between Evers’ Department of Revenue and a business-focused group called the Coalition to Repeal Wisconsin’s Personal Property Tax and, notably, state Sen. Duey Strobel, R-Saukville, lead author of the bill in question.

According to Stroebel, the final bill included virtually all changes requested by the Department of Revenue, in addition to more requested changes received only hours before the bill was taken up in the Assembly. 

When Republicans sent their bill to Evers, they included in the state budget more than $200 million to provide local governments with payments to cover revenue losses that would be caused by ending the state-imposed tax. 

Evers vetoed repeal of the tax, but retained that extra money in the budget saying it could be used to buffer a future repeal of the tax.

In his veto message, Evers wrote:  "I am vetoing this bill because I object to the unusual and haphazard process by which the Legislature pursued the repeal of the personal property tax." 

He also argued that Republicans wrote the measure in a way that could have resulted in an additional tax break for utilities, and called on lawmakers to address the issue and pass a new repeal bill that addressed his concerns. 

That has not happened.

Instead, Evers lined up with Democrats to introduce their own bill. 

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Inflation-adjusted weekly wages “are lower today than they were 50 years ago.”

Stroebel said the new repeal bill was crafted without any consultation, and included "poison pill provisions to appease the left and serve as political cover for those not paying attention."

That bill is more than twice as long as the Republican bill, as Democrats are trying to spell out exactly how various businesses would be treated under a repeal.

In an email to PolitiFact Wisconsin, Patty Mayers, communications director for the revenue department, said the bill "carefully seeks to ensure that there are no unintended consequences from elimination of the personal property tax." 

Among other things, she noted it included a built-in inflationary increase for local governments, and said the new measure "seeks to ensure the Transportation Fund does not bear the cost of lost railroad personal property tax collections."

That’s fair. No one would expect the new bill to exactly match the old. But that’s not the question at hand for us: We are more interested in whether the new bill matches what Evers said he wanted in a new bill when he vetoed the first one.

In that regard, there are differences worth noting.

For instance, the repeal coalition says the new bill "singles out both recreational mobile homes and outdoor advertising signs and would require them to continue to be taxed" and exempts air carriers from real estate property taxes -- which is a different tax entirely.

Stroebel described it as "a completely unrelated, brand new special interest property tax exemption … added for air carriers."

So, what’s the bottom line?

Evers has been consistent on saying he wants the tax repealed, but much less consistent on what it would take for him to sign the measure. There were several new things added subsequent to his veto message.

And the entire approach -- especially in divided Madison -- stands in contrast to how he handled the income tax cut in the state budget, which Evers noted was not perfect in his mind, but went a long way toward achieving his goals.

Because of that inconsistency, we rate this a Half Flip.