By TODD RICHMOND, Associated Press

MADISON, Wisconsin (AP) – The Republican-controlled budget committee of the Legislature on Wednesday approved a bill that would cut taxes by $ 540 million by mid-2023, largely by eliminating taxes on federal loans to businesses to help them weather the pandemic.

The entire Legislature could vote to pass it as early as Tuesday. Democrats on the Budget Committee argued the bill was too expensive and was another giveaway to businesses that took out the loans but still thrived during the pandemic.

“We are punching a big hole in the budget,” said Rep. Evan Goyke. “We can direct our relief in a more targeted and efficient way. “

Republicans countered that the bill aligns the state’s tax code with the federal code.

“This is not the tax bill that everyone dreams of,” said Representative Mark Born, co-chair of the committee. “This bill corresponds to federal law. Of course, it’s not perfect.

Gov. Tony Evers, a Democrat, is expected to sign the bill for the tax cut to take effect. When asked if Evers would veto the measure, his spokesperson, Britt Cudaback, responded with a statement from the governor saying he would continue to do everything possible to support small businesses during the pandemic.

The federal government launched an economic stimulus project called the Paycheck Protection Program last year to help small businesses stay afloat amid the COVID-19 pandemic. The program offers low interest business loans. Companies generally must have fewer than 500 workers to be eligible. The popcorn business of Assembly President Robin Vos in Burlington received between $ 150,000 and $ 350,000 through the program last year.

The loans are tax deductible under the federal code, but not under the state code. The bill would align the two codes, resulting in a loss of revenue of $ 419 million for the state over the next three fiscal years, according to the non-partisan Tax Legislative Office.

The bill creates other deductions that would result in an additional loss of income of $ 121 million over that period, including deductions for medical insurance costs for the self-employed and economic disaster loans.

Despite warnings from Democrats that the bill would create a huge hole in the budget, the loss of revenue would hardly be a big blow to the grand scheme of state finances. The 2019-21 state budget was $ 83.5 billion; $ 540 million is less than 1%.

The loss of revenue is not a huge blow to the state. The 2019-21 state budget was $ 83.5 billion; $ 540 million is less than 1%.

Wisconsin Manufacturers and Commerce, the state’s largest business group and a staunch Republican supporter, issued a statement praising the finance committee for approving the bill.

“WMC and our members urge lawmakers and Governor Evers to support this legislation, which is critical to delivering on the promise that these funds would be available tax-free to all beneficiaries,” said WMC attorney Cory Fish. , in the press release.

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