Senate Republicans' plan would borrow for Wisconsin roads and eliminate a business tax

Hoping to move past a budget stalemate, Republicans in the state Senate on Tuesday proposed a spending plan that would rely on borrowing for roads and eliminate a property tax paid by businesses. 

But talks on the budget remained as stuck as ever because GOP senators are at odds with Republicans who control the Assembly over transportation and other issues. 

Senate Majority Leader Scott Fitzgerald (R-Juneau) and seven of his colleagues unveiled their proposed budget at a Capitol news conference, but Fitzgerald also acknowledged he did not know if he had enough votes to pass it in his own house. 

"The reason I’ll say that I’m not sure where the votes are is because of the smaller items that are somewhat parochial that I’ve talked to members about," he said. "So I’m not going to make that prediction that I have the votes right now."

Assembly Speaker Robin Vos (R-Rochester) and other leaders in his house issued a statement saying they would give the Senate proposal "fair consideration" and hoped to approve a budget "in the coming weeks."

Democrats blasted Republicans for their inability to pass a budget, saying GOP Gov. Scott Walker was to blame.

Walker, Fitzgerald and Vos are slated to meet Wednesday, but on Tuesday the Senate plan appeared unlikely to gain much traction in the Assembly.

A new budget was supposed to be in place by July 1. Funding will continue at the levels set in the last budget until a new spending plan is approved. If the stalemate continues, some road work could be delayed as early as Aug. 8. 

FULL COVERAGE:Wisconsin state budget updates

Last week, Vos gave up on his hope of finding more revenue for transportation, but said he would not accept any borrowing for highways over the next two years. 

That would likely mean severe delays for rebuilding the north leg of the Zoo Interchange in Milwaukee County and reconstructing I-94 south of Milwaukee. 

Senate Republicans want to borrow $712 million over two years for roads, with nearly half of it being paid back from the fund that pays for schools and health care programs for the poor. Usually, bonds for highways are repaid with collections from the gas tax and vehicle fees. 

The Senate plan would also approve rebuilding the section of I-94 between the Marquette and Zoo interchanges. That work would eventually cost $852 million, but the state would have to fund only about $30 million of that over the next two years.

In addition, the Senate plan would eliminate the prevailing wage law that sets minimum salaries for workers who perform road work and construct publicly funded buildings and cut 200 jobs at the state Department of Transportation.

Tax cut

The Senate plan would eliminate the personal property tax, which is levied mainly on businesses for their equipment and furnishings. The state would reimburse local governments $239 million a year to cover their lost tax collections.

The Senate GOP plan would also get rid of the state's alternative minimum tax, which typically is paid by those who earn $200,000 to $500,000 a year.

To help fund their proposal, Senate Republicans would toss aside Walker's plans to trim the income tax by $203 million over two years. In addition, they would drop his plans to expand a tax credit program for the working poor and get rid of his proposed sales tax holiday each August.

Schools increase

Senate Republicans recommended keeping intact the general school aid and per-pupil increases of $200 in 2017-'18 and $204 in 2018-'19 that Walker proposed.  But they shaved off some of the extra aid the governor had proposed to rural and sparsely populated school districts.

They also included a provision that would create a disincentive for districts to go to referendum to exceed revenue limits for spending, something that has happened with increasing frequency in recent years as districts seek additional money for operations.

Their plan would also require school districts to report the details of their employee health insurance plans to the Department of Administration each year.

GOP senators also proposed offering an additional $3.7 million to help Milwaukee schools that receive failing grades on their report cards. Walker's proposal took the opposite approach, asking for $5.6 million to reward high-performing or rapidly improving public, voucher and charter schools in Milwaukee.

Republican senators recommended lifting the income cap on the statewide program to 220% of the federal poverty level, up from a current limit of 185%. That would mean students from families of four making up to $53,826 annually could participate in the program, up from the current limit of $45,263.

Assembly Republicans want to raise the limit further, to 300% of the federal poverty level, or almost $73,000 for a family of four.

The Senate GOP proposal would also expand special-needs vouchers at private schools, and allow private voucher schools to establish and enroll students in virtual education programs.

Sen. Jon Erpenbach (D-Middleton) blamed Walker for the budget delays.

"It's the governor's fault," Erpenbach told reporters. "Every other governor when there's been an impasse, that governor stepped in and brought both sides together. I think it's incumbent upon Gov. Walker, no matter where he is in the state or the country, to come back to Madison, sit down with the speaker and majority leader and stay there until we have a state budget."

Walker spokesman Tom Evenson said he was pleased senators were backing a proposal that is largely in line with the governor's proposals on education, transportation and property tax relief. 

Lillian Price of the Journal Sentinel staff contributed to this report.