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| Political Tidbits | Compiled by The Hamilton Consulting Group July 11, 2007 |
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On Tuesday, July 10, the State Assembly debated and passed its version of the 2007-09 biennial budget bill on a 51-44 vote. The Republican crafted budget differs substantially from the Senate passed version - setting up a lengthy and contentious list of issues that will have to be addressed in conference committee. The primary points of difference continue to center on tax policy. The Assembly budget contains no new tax increases and did not contain the Senate universal health care plan (and associated $15.2 billion in payroll taxes). The Governor’s proposed oil gross receipts tax, hospital gross receipts tax, cigarette and tobacco products tax increase, all contained in the Senate budget, are deleted by the Assembly. The Assembly version contains a number of tax reductions - such as federal treatment of Health Savings Accounts (HSA’s), exclusions for retirement income, angel investment credits and workplace wellness tax credits - further widening the gap between the two houses on tax policy. In Health Care, the Assembly version sets up a major battle with the Administration by deleting the Governor’s expansion of medical assistance to cover all children and certain farmers and childless adults known as BadgerCare plus. In this area of the budget the Assembly Republicans are flanked by the Senate Democrat universal health care plan. Funding the base MA program represents another substantial difference with the Governor and the Senate, relying on new taxes (hospital tax, tobacco taxes and Patients Comp Fund Transfer) to replace roughly $700 million in base GPR pulled out of the program and the Assembly restoring that base GPR in lieu of new tax revenue. In Transportation, the Senate budget provides more funding for DOT programs but uses oil gross receipts tax and, indirectly, combined reporting to fund their plan. The Assembly version contains neither new tax. The Senate eliminates $90 million of the $165 million in GPR shifts to the segregated transportation fund, (first year only with zero the 2nd year) while the Assembly deletes the transfers altogether. Both houses incorporated a heavy truck registration fee increase with the Senate at 10 percent and the Assembly at 15 percent. Conference committee negotiations in this area will continue to focus on the level of funding increase and the mix of various revenue sources to support that funding level. In Education and Property Taxes, the Assembly reduced funding for general school aides, shared revenue and the UW system compared to the Senate. In addition, the Assembly deleted JFC provisions relating to a new first-dollar school levy credit and instead increased the current school levy credit distribution. Other major points of contention include Assembly levy limit provisions (limiting levy limit increases to the growth in value of new construction), deletion of the Governor’s proposed Wisconsin Covenant and maintaining the Qualified Economic Offer (QEO) per current law with regard to teacher compensation. In addition to major differences, both houses have armed themselves with a number of separate policy items to leverage negotiations in conference committee. Many of these items have already been introduced in one house or the other as separate legislation and include issues ranging from insurance coverage mandates, to the timing of MA payments, to extending the timeline for implementing Smart Growth, to manufacturer’s product liability provisions and more. Both the degree of difference and the number of differences point to a long summer of conference committee deliberations. The appointment of the conference committee members and the start of those deliberations are pending. Following action on the state budget, the Assembly passed AJR 59, establishing a conference committee of three majority and one minority member from each house. The Senate is expected to schedule that resolution soon.
Budget Amendment Documents
CTCW Political Tidbits is a weekly newsletter on
Wisconsin political and policy developments prepared for CTCW members by The Hamilton
Consulting Group. Employees of CTCW member organizations can subscribe
at: http://www.ctcw.org/form-subscribe-tidbits.html. © 2007 The Hamilton Consulting Group |
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