The legislature’s budget committee has approved a tax deduction for Health Savings Accounts. It’s part of Governor Scott Walker’s package of special session bills designed to create jobs and kick start the economy, but Democrats on the Joint Finance Committee questioned the exemption’s impact on jobs creation, and how widely used it would be, by average state residents. “Unemployed citizens in northern Wisconsin don’t have HSAs, because they can barely afford to pay their bills, they don’t have any extra money,” said state Senator Bob Jauch (D-Poplar). “Small businesses in northern Wisconsin don’t have any extra money.”
“Everyone in Wisconsin has the ability to benefit from an HSA,” said Representative Robin Vos (R-Burlington), the budget panel’s co-chair. “Some employers choose to use an HSA in spite of the fact that we are one of the few states in the country that does not allow this tax deductibility.”
“This is an empty, symbolic, token gesture to appease the Wisconsin Manufacturers and Commerce and big business on tax bill that has been on their agenda for years,” said Jauch, adding that proponents could cite no specific examples that the incentive will create jobs. Democrats also noted the exemption will mean a $49.2 million dollar reduction in state revenues as Walker and the legislature work to reduce the state’s deficit. But at least one Republican member asked whether that’s a bad thing. Representative Dan Meyer (R-Eagle River) questioned Legislative Fiscal Bureau staff on that point and was told that’s the correct fiscal estimate on the bill. “The other side of that coin is that we’re allowing tax paying individuals to keep $49.2 million of their own money,” Meyer said.