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MADISON - Wisconsin lawmakers may decide in the next few days how much taxes you
pay every time you fill up your car with gas, whether you have to buy
car insurance and how your business investments are taxed.
Leaders of the Assembly and Senate are
working to reconcile hundreds of differences in the budgets they
passed.
The questions facing Assembly Speaker
Mike Sheridan, Senate Majority Leader Russ Decker and their colleagues
range from the major to the mundane. Whether the state should impose a
new tax on oil companies? Make sure illegal immigrants are qualified
to drive? Create a new income tax checkoff to benefit military
families?
If agreement is reached, both houses of
the Legislature could approve identical versions of the budget this
week to send to Gov. Jim Doyle, who could use his veto power to make a
final round of tweaks.
Legislative leaders are under pressure
to come to terms quickly. The state could lose millions of dollars in
federal money if the plan is not passed by July 1. Lawmakers also want
to quickly enact spending cuts and tax and fee hikes to close a
record-high $6.6 billion budget hole.
Here's a look at some of the issues
negotiators must resolve. Action could come as early as Tuesday, when
the Senate is scheduled to reconvene. Assembly leaders have likewise
told members to be available all week to pass the budget.
TAXES: The biggest question facing
lawmakers is how to make the budget balance through targeted tax
increases.
The Assembly has approved a new
assessment on oil companies, but would allow them to pass the cost on
to consumers at the pump up to 4.4 cents per gallon. The plan is
legally sound but politically risky because many drivers would be
angered at having to pay higher gas taxes in a recession. It would
raise about $224 million.
Doyle made a similar proposal, but
barred the companies from passing the tax on to customers. The
problem: many legal analysts believe the oil companies would have a
strong chance at winning a lawsuit claiming that tax is illegal.
The Senate didn't approve any tax on
oil companies. Instead, its budget would remove all exemptions from
taxes on capital gains, which would tax business investors an
additional $485 million over the next two years. Doyle and the
Assembly only want to lower the current 60 percent exemption to 40
percent, which would raise $170 million.
Leaders of the Wisconsin Technology
Council, which advises the governor and Legislature on policy, say the
Senate plan would lead to less investment in all sectors of the
economy and hurt startup businesses.
IMMIGRATION: Negotiators are weighing
two hot-button issues related to immigration policy: whether to create
a new driver's card for illegal immigrants and whether to allow them
to qualify for in-state tuition at Wisconsin universities and
technical colleges.
The Assembly approved both plans. The
Senate rejected them.
The driver's cards would be given to
illegal immigrants who pass the required tests to show they are
qualified to drive. The cards would look different from driver's
licenses and say in bold letters they could not be used for other
official purposes. Only one other state, Utah, offers a similar card.
The in-state tuition measure would
apply to illegal immigrants who graduate from Wisconsin high schools
and have lived in the state three years. Right now they must pay
out-of-state rates, which creates an insurmountable barrier for many
low-income immigrants to higher education.
AUTO INSURANCE: The Senate would
require all motorists in Wisconsin to have car insurance. The Assembly
would keep current law, which makes Wisconsin the only state other
than New Hampshire not to mandate car insurance.
DOJ FUNDING. The Assembly agreed to
restore $5.4 million in funding for the Wisconsin Department of
Justice after Attorney General J.B. Van Hollen mounted a public
relations blitz warning cuts would cripple the agency. The Senate kept
the deeper cuts in place and Decker has said they do not unfairly
target the agency.
MILWAUKEE COUNTY SALES TAX: The
Assembly budget would allow the Milwaukee County Board to increase
sales taxes by 0.5 percentage points to fund transit and an additional
0.15 percentage point for local police and fire services. The Senate
would go even further, allowing an increase of 1 percentage point for
those and other purposes.
REGIONAL TRANSIT AUTHORITIES: The
Assembly voted to allow regional transit authorities to be created in
the Chippewa Valley and the Fox Valley pending local approval. The
agencies could impose a sales tax up to 0.5 percentage points to fund
transportation. The Senate did not approve either one, but added one
of its own for far northern Wisconsin.
TAX CHECK-OFFS: The Assembly voted to
allow Wisconsin residents the option to donate to Second Harvest Food
Banks and a new relief fund for military families when they pay their
income taxes. The Senate did not include either plan.
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