Budget deal derails KRMOct. 20, 2007State plan would raise taxes on cigarettes, not hospitals
KENOSHA NEWS STAFF and THE ASSOCIATED PRESS MADISON - Gov. Jim Doyle and legislative leaders
ended the nation's longest budget impasse on Friday by reaching a deal that will increase taxes on smokers, rejects proposed
taxes on hospitals and oil companies, and drops a funding mechanism to expand rail service from Kenosha to Milwaukee.
The
agreement uses a $1 per pack increase in the cigarette tax to help pay for health care programs. They include plans to make
all children and thousands of low-income adults eligible for state-subsidized health insurance and to spend $30 million in
smoking prevention programs.
Assembly Speaker Mike Huebsch and Senate Majority Leader Judy Robson both said they expected
the new two-year, $58 billion budget to pass in their chambers on Tuesday. Doyle will then have a chance to rewrite the budget
with his veto pen but he pledged to make few changes.
Jim Kreuser, D-Kenosha, the Assembly minority leader, said many
items of concern to Kenosha County survived the negotiations, including building projects at UW-Parkside, an additional judge
and two additional assistant district attorneys - but the budget does not include the authority for a tax to help fund the
proposed Kenosha-Racine-Milwaukee commuter rail line.
"That makes it bittersweet," he said.
The Southeastern
Wisconsin Regional Transportion Authority had proposed a $13 increase in the tax on rental cars in Kenosha, Racine and Milwaukee
counties to generate local funds needed for the rail line.
Kreuser, a member of the budget conference committee, said
he would attempt to amend the budget to include the authority for the KRM funds at Monday's conference committee meeting.
Karl
Ostby, the president of Kenosha-based Southport Bank and the chairman of the Regional Transit Authority, said he was disappointed
that the KRM project wasn't included.
"I'm disappointed at the lack of pro-activity when it comes to economic development
in Wisconsin," said Ostby.
The proposed rail line would have connected the Chicago-to-Kenosha Metra line with a new
Kenosha-to-Milwaukee line.
"Here in Kenosha, we're fine, we have commuter rail," said Ostby. "I feel especially bad
for the people in Racine and Milwaukee."
Ostby said he's not sure if there will be another chance for KRM funding if
the car-rental tax isn't included in the budget.
"It's certainly a setback. I wouldn't say it's dead," Ostby said.
After
the budget impass was broken late Friday night, Republicans and Democrats both claimed victory. Democrats said the plan delivers
on priorities such as funding for health care, the University of Wisconsin System and public schools. Huebsch said it holds
down taxes and spending to levels closer to Republicans' liking.
The agreement ends a budget impasse that was well
into its fourth month. Wisconsin had been the only state with a July 1 deadline not to have a budget in place.
"For
the first time in a long time Wisconsin has a budget," Doyle said at a news conference late Friday. "Today, the Legislature
has done the right thing for our schools; for the safety of our neighborhoods; for the health of our kids and the health of
our economy."
Each side said they made significant concessions after months of stalemate. Doyle said the plan cuts
spending at state agencies, which could require hiring freezes and other cost-saving measures. He also said the plan does
not include as much money as he wanted for local police and fire services.
The deal also includes:
- Doyle's
Wisconsin Covenant plan to promise college financial aid to eighth graders who pledge to meet certain requirements during
high school.
- Increases in financial aid for low-income students and funding to pay for part of a program that gives
free tuition to veterans who attend Wisconsin colleges.
- Plans to expand enrollments and research programs at some
UW System campuses.
- A limit on property tax increases to 2 percent for each of the next two years. The deal averts
a $80 million property tax increase that was looming without a budget.
Republicans who lead the Assembly and Democrats
who control the Senate and the governor's office spent months bickering over spending and taxes. The biggest sticking points
had been Doyle's plan to increase the state's 77 cent per pack cigarette tax by $1.25 and impose a 0.8 percent tax on hospitals.
A
$1 tax increase for cigarettes amounts to a compromise between Doyle and Huebsch, who had offered 75 cents.
Removing
the hospital tax is a victory for Republicans, who had fought the plan since February. The tax would have been used for health
care programs and to increase reimbursement rates for Medicaid providers but Republicans warned it would increase the cost
of health care.
The deal also kills Doyle's plan to fund transportation needs using a new tax on oil companies. Doyle
said major transportation projects would not be delayed. Huebsch said borrowing to pay for them would increase.
The
breakthrough came after several days of intense negotiations between aides to Doyle and legislative leaders. The talks started
in earnest after the Republican-controlled Assembly on Monday met in a special session to reject Doyle's latest offer, which
they said still had too much spending and taxes.
The cigarette tax will anger smokers but advocates say it will deter
children and adults from lighting up. The cost of a pack of Camels or Marlboros would go up to about $5.
Doyle's BadgerCare
Plus plan will allow all families to buy health insurance for their children through a state program, with a sliding scale
based on income. An additional 70,000 low-income adults will have the same option under the deal.
But Doyle said removing
the hospital tax means hospitals will not get an increase in reimbursements from the state for treating low-income patients.
The tax would have generated matching federal money and many hospitals were lobbying hard for the measure, which Republicans
called a tax on the sick.
The deal will also transfer $200 million from a fund used to compensate medical malpractice
victims to the general fund. That move will likely be challenged in court by medical groups, who contend the money belongs
to patients.
The increase in the cigarette tax and the fund transfer will anger conservatives in the Assembly but Huebsch
said the plan would get a majority of votes in the chamber, which is controlled 52-47 by Republicans.
During the impasse,
funding for state agencies continued at the same levels as the budget year that ended June 30. But without a new budget, the
property tax hike was looming to pay for public schools, thousands of low-income college students were on a waiting list for
financial aid and numerous other programs were in limbo.
Doyle warned this week he would have to partially shut down
some government services without a new budget in coming months.
