Wisconsin budget heads to governor -- on time

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• The bugdte and you

MADISON – Democratic leaders approved a revised state budget deal last night that would drop a tax on oil companies and collect more taxes from investors to make up the difference. It would also, for the first time, require all drivers to purchase auto insurance.

The full State Senate signed off just a few hours after the agreement was made public. And when the State Assembly passed it today it closed the book on Wisconsin’s historically large budget shortfall.

Calling the state budget process an eye-opening experience, freshman State Representative Nick Milroy, D-Superior, said he was pleased that many of his proposals were included in the final budget, including saving the walk-in service at the Department of Natural Resources office in Superior and the removal of the oil tax.

“The oil tax proposal went from bad to worse,” Milroy said. “This tax would’ve had the capability of severely impacting Murphy Oil’s ability to compete and turn a profit. I’m pleased that we removed this tax from the budget. We have good jobs here that depend on a profitable operation in Superior.”

The budget approved by the legislature scales back the state’s tax break on capital gains income, but would not get rid of it. Right now, Wisconsin excludes 60-percent of long-term investment income from state taxes, giving it one of the country’s most generous exemptions. The Governor wanted to scale that back to 40-percent. This plan knocks it down to 30-percent to make up for part of the money lawmakers lost by killing any kind of oil or gas tax.

The change was negotiated by Senate Majority Leader Russ Decker, who defended it Thursday night to Republicans. He said Democrats turned state tax policy and turned it progressive again, something “that Republicans used to lead but don’t do that anymore.”

Milroy convinced colleagues that customer service representatives provide specialized services that would not be available through local vendors, online or over the phone.

“The deep cuts proposed in the budget would have eliminated funding and positions for walk-in service at 18 DNR offices statewide,” said Milroy. “The customer service representatives in Superior do great work and provide a valuable service for our community. If we lost these positions, residents and visitors of the Twin Ports would have to travel over an hour to Spooner to receive customer service from the DNR. This was one of the issues of which I was contacted most often by citizens of the 73rd Assembly District, and I’m proud that I was able to restore these positions.”

This budget would raise income taxes for people who make more than $225,000 a year. Cigarette taxes would go up $.75 per pack and every phone line would have a new $.75 monthly fee.

Some of the biggest changes in this document don’t involve state spending. The deal reached Thursday would not only require auto insurance, it would ban insurance companies from considering where someone lives when they set premiums. It would also require insurance companies to cover autism treatment.

The budget deal would also speed up the repeal of the teachers union bargaining law known as the Qualified Economic Offer (QEO). That limits teachers’ raises to 3.8-percent when negotiations break down between a union and a district. Democratic lawmakers had earlier agreed to delay that change for a year over concerns that it could drive up costs for school districts.

Decker wanted it repealed immediately, saying it had to impact on property taxes as long as levy limits are in place. He said the reason for removing the QEO was to “end the Republican assault on teachers.”

If you set aside factors like the QEO, the legislative fiscal bureau estimates property taxes statewide would go up by about $1.5-billion under this budget. Overall spending would go up roughly $4 billion, the bulk of which would come from one-time federal stimulus money.

This latest budget deal would rely more on borrowing than any of the other budget plans put forward. Assembly Minority Leader Jeff Fitzgerald said the overall package represented what people could expect when they put Democrats in charge, saying they would reach into people’s pockets to pay for increased spending and borrowing. Fitzgerald added that the deficit would be run up even further under the “good, old-fashioned Democrat budget.”

The budget deal last night included most of the same spending cuts Democrats had agreed to previously. Schools would take a hit, state employees would be furloughed and most state agencies would be cut. The exception was the state Department of Justice, which got a 5-percent cut to its budget reversed in this final deal. The state’s ethics agency would also get to hang onto all of its funding for investigations of elected officials.

Children of undocumented immigrants who go to Wisconsin high schools would qualify for in-state tuition under this compromise, but undocumented immigrants would not be allowed to get driver’s cards. While the Fox Cities area would not be allowed to levy a local sales tax to pay for bus and rail, Milwaukee and Dane Counties would. So would the Chippewa Valley and Chequamegon Bay.

“Today, Assembly Democrats rose to the challenge of solving the worst budget crisis in the history of Wisconsin,” said Speaker Mike Sheridan, D-Janesville. “We did it by making the deepest spending cuts our state has ever seen, while still preserving the most important priorities like job creation, education and health care. We did it by protecting more than 99 percent of all people in Wisconsin from income taxes, shielding everyone from gas tax, sales tax and payroll tax hikes, and holding the line on property taxes. We did on time for the first time in more than 30 years.”

The budget now goes to the governor for his signature. He tentatively plans to sign the document on Monday at which time he has the authority to use partial vetoes.

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