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Oil tax, driver's card for illegals out of budget

MADISON, Wis. (AP) — A new tax that threatened to increase gas prices would be eliminated and illegal immigrants would not be issued special cards so they could drive legally on Wisconsin roads under a budget deal passed by the Democratic-controlled Senate early Friday.

The deal was released just four hours earlier Thursday night following more than 12 hours of closed-door discussions.

Under the agreement, Wisconsin drivers also would have to buy car insurance, leaving New Hampshire as the only state without the requirement.

The deal attempted to resolve major differences between the two versions of the roughly $62 billion state budget passed by the Senate and Assembly earlier this month. There is urgency to get the budget enacted by the start of the new fiscal year Wednesday to solve the state's projected $6.6 billion shortfall, the highest ever.

The Senate passed it 17-15, with Democratic Sen. Jim Sullivan of Wauwatosa joining 14 Republicans in voting no. One Republican, Sen. Alan Lasee of DePere, was absent.

The Assembly was expected to vote Friday. Once both chambers pass the budget, it heads to Democratic Gov. Jim Doyle for his consideration.

Doyle spokesman Lee Sensenbrenner had no immediate comment on the deal.

Republicans blasted Democrats for reaching the deal in secret before presenting it to the conference committee that passed it 4-2 along party lines to send it to the full Senate.

"This is the deepest, darkest budget I've ever seen negotiated in this building," said Senate Minority Leader Scott Fitzgerald, R-Juneau. "We had no input into this. ... It's just terrible."

Senate Majority Leader Russ Decker, D-Weston, defended the plan, noting that there are no general sales or income tax increases or higher payroll taxes. He said it also holds the line on property taxes. Under the budget, the average-priced home would see a $90 property tax increase this year, according to the nonpartisan Legislative Fiscal Bureau.

The budget includes more than $2 billion in tax and fee increases, cuts most state agency spending by 6 percent, will result in all state employees being furloughed for 16 days over the next two years, force about 1,400 to be laid off and rescinds 2 percent pay increases for state workers.

Under other previously agreed-to parts of the budget, fees on phones would increase 75 cents a month, cigarette taxes would go up 75 cents a pack and there is an income tax increase on households making more than $300,000 a year.

Overall state spending, including about $3 billion in federal stimulus money, would increase about 6.8 percent, the Fiscal Bureau said.

"I don't think family budgets at home are getting to do an increase of 6.8 percent," said Assembly Minority Leader Jeff Fitzgerald, R-Horicon. "This does nothing to protect the middle class."

Under the deal, taxes would be raised on capital gains, though not as much as wanted by Senate Democrats, whose budget would have no exemptions. The deal allows a 30 percent capital gains exemption instead of the current 60 percent.

Doyle had proposed lowering the exemption to 40 percent.

The oil tax was one of the most contentious parts of the budget, with Doyle wanting to ban companies from passing along the cost of the tax to customers at the pump. The Assembly removed that ban under concerns it was unconstitutional. Their plan would have allowed gas prices to go up 4.4 cents a gallon.

The Senate rejected the tax outright and the agreement also does not include it.

The driver's card for illegal immigrants also was divisive. Police and immigrant rights groups lobbied for the cards, arguing they would make the roads safer by ensuring even those who aren't citizens have identification and can buy insurance. But Doyle didn't propose the idea and the Senate rejected it in its budget. Only Utah has a similar card.

The agreement also would immediately repeal a 16-year-old state law that effectively places a cap on teacher pay increases. Doyle and the state teachers union have long advocated for doing away with the so-called qualified economic offer. But Republicans in control in the Legislature have blocked it.