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• State Dems reach budget deal; clock ticking on Monday's fed funding deadline

MADISON -- Democratic leaders approved a revised state budget deal last night (6/26) 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 meets later today (FRI) it could all but close the book on Wisconsin's historically large budget shortfall.

The budget the Senate approved would scale 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 last 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."

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 yesterday 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. Senator Decker wanted it repealed immediately, saying it had to impact on property taxes as long as levy limits are in place.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 that have been 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 drivers 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.

The Assembly now has to take an up or down vote and send this plan along to the Governor. He only has until Monday to approve this budget, or the state could lose out on millions in federal funding. (From Wisconsin Public Radio)