The Special Session Budget Repair Bill moved to the Democrat-controlled State Senate this past week.  On Wednesday, the Senate Finance Committee held a public hearing on the Governor's and Assembly Republicans' budget repair proposals at the campus of the University of Wisconsin-Milwaukee (UWM). 

Since the hearing was held in Milwaukee, several Milwaukee area politicians and public figures spoke at the public hearing, including Milwaukee Mayor Tom Barrett, Milwaukee County Board Chairman Lee Holloway and Milwaukee Superintendent of Public Schools Bill Andrekopolous.  The 150 seat auditorium where the hearing was held was largely filled with three groups of interested parties; a large contingency from the Operating Engineers Local #139 supporting a fully-funded transportation program, members of the State AFL-CIO, Milwaukee, Kenosha and Racine business development groups and other organizatons supporting the provisions of the Senate Democrat Economic Development plan, Senate Bill 510, which would implement combined reporting for corporations, start planning on the Kenosha-Racine-Milwaukee commuter rail system, increase funding for the renewable energy grant programs and other provisions, and representatives of the Hospital Association speaking in favor of the hospital assessment/tax.

The Democrat-controlled State Senate on Thursday announced its amendment to the State Assembly's version of the budget repair bill.

Provisions in the Senate Democrat plan included;

• Combined reporting;  Require that, beginning with tax year 2008, corporations that are subject to the state corporate income and franchise tax, and that are engaged in a unitary business, would file a combined report for state income and franchise taxes.  ($130,000,000 increase in GPR)
• Corporate Income/Franchise tax rate reduction; Reduce the corporate income/franchise tax rate from 7.9% to 7.8% starting with tax years that begin on or after January 1, 2009. (-$5,200,000 GPR)
• Hospital Assessment/Tax;  The Department of Health and Family Services would assess all hospitals, other than critical access hospitals (CAHs) and institutions for mental diseases (IMDs), that conduct business in the state, an annual amount, based on each hospital's gross patient revenue. The amendment would direct DHFS to develop a methodology for calculating rate increases for inpatient and outpatient hospital services in connection with the hospital assessment. The methodology would incorporate encounter data provided by HMOs and information that DHFS uses to calculate the capitated rates that DHFS pays HMOs for providing services to MA recipients.  ($416,259,300 in SEG and $408,339,200 FED increases).
• Kenosha-Racine-Milwaukee (KRM) Commuter Rail;  The Senate amendment includes a proposal to start developing a Kenosha-Racine-Milwaukee commuter rail line. The amendment raises the $2 car-rental fee in Kenosha, Racine and Milwaukee counties to $15 to help pay for planning the system.  (Rental fee increase will bring in around $5 million a year)

 (Legislative Fiscal Bureau Summary of all the provisions can be found at:

http://www.legis.state.wi.us/lfb/2007-09Bills/2008_03_19SA1toEngrossedSSAB1.pdf

The Senate Committee on Finance voted the amended bill out of committee on a party-line 6 Democrats to 2 Republicans vote.  The entire State Senate will take the bill up on Tuesday, March 25^th.

Reaction to the Senate Democrat Plan;

• "The Senate Democrats' plan is a responsible, fair compromise. We tighten the state's belt while maintaining essential services for Wisconsin's hardworking families and businesses and reducing the structural deficit.  We protect funding for our Technical Colleges, Shared Revenue, General and Categorical School Aids, Transportation, Compensation Reserves and the Department of Revenue.  There are no raids on segregated funds in our plan."  
  Senate Finance Chairman Mark Miller (D-Monona)
• "The budget repair plan approved today by the Senate Finance Committee shows the differences between Republicans and Democrats in solving the state budget deficit.  Where the GOP budget plan protects taxpayers by cutting government spending, the democrats instead raise taxes on sick people, employers and consumers.  Their plan turns a blind eye to the reality that everything families need to live from food to gas to health care is going up in price. Instead of seizing the budget repair bill as an opportunity to cut spending and put the size of state government more in line with the ability of taxpayers to pay, legislative democrats are using it as an excuse to extract even more money from already over-taxed Wisconsin families."
  Assembly Speaker Mike Huebsch (R-West Salem)

• [Governor Jim] Doyle doesn't like the Senate Democrats' ideas of pushing $125 million in school aid into the next budget cycle and wiping out the budget surplus, spokesman Jessica Erickson said.
  (Milwaukee Journal Sentinel- March 21, 2008)

Next Step in the Process;

According to an interview Assembly Speaker Huebsch did with the Wheeler Report on Thursday, informal negotiations between the Senate and Assembly on a compromise bill could begin almost immediately since both sides now know each others' positions.  In the interview Speaker Huebsch noted that he thought given the experience of the last conference committee resolution to the three sides' differences could be resolved quicker in private negotiations.