The Senate has given preliminary approval to a budget balancing bill that erases the state's debt for the current biennium and tackles a portion of the debt in the next two year budget. The bill uses accounting shifts and several tax increases to cover the projected $439 million remaining in the deficit.
On a 38-28 vote, the Senate moved one step closer to passing its budget-balancing bill. Final approval will have to wait until Wednesday because Republicans rejected a move by the DFL majority to suspend the rules for quick approval.
Last month, the Legislature erased $2 billion of the projected deficit for the current two-year cycle. The Senate plan uses accounting shifts and several tax increases to fix the remaining shortfall. The bill also begins to replenish the budget reserves that were drawn down in last month's budget balancing bill.
The Senate plan would increase the cigarette tax an additional 60 cents a pack by Jan. 1. It would also require Wisconsin residents who work in Minnesota to start paying Minnesota income tax in 2003.
Sen. Doug Johnson, DFL-Tower, says Senate DFLers were forced to raise taxes because they didn't want to make any more cuts to state government. He criticized House Republicans for passing a plan that would cut $60 million to state programs for the poor.
"What are we seeing in the other bodies? Cuts in general assistance to those that are mentally ill, those that have chemical dependency problems. Cuts in general assistance medical care to the poorest of our citizens. And as Democrats in the Senate, we will not stand by and let cruelness be put onto the most vulnerable people in our state," he said.
In an unusual procedural move, the bill bypassed the Senate Taxes Committee after opponents of legal abortions attached an amendment to the bill last week. The amendment would've required a 24-hour waiting period for anyone seeking an abortion.
Several Senators complained the bill wasn't approved through the traditional committee process. Abortion opponents attempted to bring up the same amendment on the Senate floor but failed by one vote.
Republican Sen. Bill Belanger and other fiscal conservatives did succeed in stripping the bill of language that would increase property taxes on businesses.
"It starts to undue the property tax reform that we enacted last year," he said.
DFLers had hoped to use the increase to fund a 2.5-percent inflation increase for K-12 education in the next biennium. Senate DFLers say the bill still has some money left for education in 2004-2005.
The plan now must be reconciled with a very different House plan. House Republican Majority Leader Tim Pawlenty said his colleagues continue to believe that they can fix the current budget shortfall without raising taxes. Their plan relies on spending cuts and a portion of the state's tobacco endowment.
"That's the basic philosophical difference between the Democrats and us. We believe that we can solve this budget deficit without raising taxes. They continue their push to raise taxes and that's why we have this two-, maybe three-party system where we can have this clash of ideas to get them aired out and resolved. And that's what's going to happen over the next couple of days," according to Pawlenty.
Pawlenty says the two sides aren't that far apart when it comes to fixing the budget problems in the current two-year cycle. He says it will be more difficult when they consider the budget problems in the next cycle.
Gov. Ventura's spokesman, John Wodele, said the Senate plan does begin to address the long term problems of the budget deficit but says the governor is still concerned about the state's budget reserves. Wodele said Ventura will take a wait and see approach to any proposed tax increases, even though Ventura said on Friday that he might veto any tax increases.
Wodele says he's concerned lawmakers are hastily putting together a budget package so they can adjourn and begin campaigning for the November election.
"We continue to hope that they would see that the responsible thing to do is to fix this budget and fix it permanently and not take the risk that they seem to be taking. But I think that hope is passed us and they are leaning heavily on using reserves and other gimmicky-type stuff," Wodele said.
The Senate will take up the bill again on Wednesday, but changes aren't likely since it will take a unanimous vote to adopt any amendments. If the bill passes, House Republicans and Senate DFLers will begin negotiating in conference committee.More from MPR