(The Center Square) – While the Republican-backed income tax and retirement income tax cuts got most of the attention in the Wisconsin budget passed last week, a sales tax cut on household electricity and natural gas bills was also included in the budget.
Sen. Howard Marklein, R-Spring Green, called it effectively a 5% cut on electricity rates.
The cut, however, didn’t come from the same Republicans who pushed the income tax cuts.
Instead, it was part of Gov. Tony Evers’ budget proposal that Republicans ended up agreeing to retain in the final budget.
“In that spirit of compromise and bipartisanship, Gov. Evers actually had in his budget a reduction in the sales tax for electricity and natural gas and that will be gone,” Assembly Speaker Robin Vos, R-Burlington, said as the budget passed. “That saves about $170 million over the next two years.”
Republicans pushed hard for the $1.4 billion tax cut throughout negotiations.
That included expanding Wisconsin’s second income tax bracket of 4.4% for all filers and exempting the first $24,000 of retirement income for those who are at least 67 before the end of a tax year with a maximum exemption of $48,000 for married couples.
But the sales tax cut on energy bills comes as experts across the country are predicting increased electricity rates as states look to adjust their electrical capabilities to help even the supply and demand as large data centers begin to pop up across Wisconsin.
The state recently passed a pair of nuclear energy bills related to a siting study and nuclear power summit and included $2 million for the siting study in the budget.
A recent poll showed that those across the U.S. are not in favor of having data centers built in their community and even more are against it when tax incentives are involved.
The average American’s energy bill could increase from 25% to 70% in the next 10 years without intervention from policymakers, according to Washington, D.C.-based think tank the Jack Kemp Foundation.
“Hey, we recognize the inflationary times we’ve been through,” co-chair Rep. Mark Born, R-Beaver Dam, told the Wisconsin Joint Finance Committee. “Family budgets are still strapped. We’re going to take the tax off of your utility bill and save you a little bit of money and help you out there with the family budget.”
Beaver Dam is one of three Wisconsin sites, along with Port Washington and Pleasant Prairie, where large-scale data centers are being built that will have large energy needs while also receiving a data center exception for sales tax on construction materials along with an expected state-wide exception to caps on property tax.
