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6/22/2009
WisPolitics: Let the final bargaining begin

From WisPolitics 6/19/09, a summary of what’s in store for Wisconsin this week. JE

Even though Dem leggie leaders have yet to formally construct the conference committee, budget observers say the horse trading to get to a final 2009-11 budget agreement has already begun.

Most are expecting the white smoke to rise fairly quickly. Observers say it could happen even as soon as this weekend, so a conference report can be finalized and moved through the Legislature as early as Tuesday, when floor sessions are scheduled.

But spokeswomen for legislative leaders and the governor said today that no formal or informal meetings are planned, and that legislators are still looking over the Senate document to weigh the changes made this week.

"By Monday everyone will have had enough time to have gone through it and we'll move from there," said Carrie Lynch, spokeswoman for Senate Majority Leader Russ Decker. "We want to get it done quickly, but this is the last stop so everyone needs a few days to go through the document and digest it."

While a conference committee is the most likely vehicle for the final agreement because its report would be unamendable on the floor of both houses, some observers say there could be alternatives. The bill remains in the Senate, which didn’t message their budget to the Assembly after its passage Wednesday and remains in recess until Tuesday. Some observers say one option would be to have the Senate introduce the agreement as an amendment, pass it, then move it to the Assembly.

But whatever route it takes, observers see stumbling blocks along the path -- from road funding to immigration issues.

Most obvious is the disagreement between the houses on the Assembly-approved “oil profits tax" without a provision barring the tax to be passed onto consumers and Senate-approved elimination of capital gains tax breaks. See more on that below.

Also frequently mentioned is the “Columbus Park” fix, so-called for a Supreme Court case that set rules for property taxes on nonprofit housing, including facilities like nursing homes and senior living centers.

The issue has been boiling for a couple of sessions but became even more of a hot button when the city of Madison decided last year to challenge the exempt status of some dwellings. A deal was forged during the Joint Finance Committee deliberations this spring that made both sides -- the nonprofits and municipalities -- somewhat content. But the deal was turned aside in the Assembly, and the Senate this week passed a provision that makes many on the non-profit side unhappy because it lowers thresholds on what could be considered taxable.

Decker is expected to take a hard line on Columbus Park, especially after the JFC deal was broken. There are Dems in the Assembly who feel just as strongly about the issue but want a different solution than Decker.

But some think Decker has merely ratcheted up the fix as a bargaining chip.

"He set himself up very well for negotiations,” said one observer.

Here are more of the specific issues that could be addressed:

-- A sticking point could be provisions to allow undocumented immigrants to get a driver’s card, and to give them resident tuition to UW System and state tech schools. The provisions, championed by Dem Rep. Pedro Colon of Milwaukee, were carefully negotiated in the JFC and, to the surprise of some observers, passed through the Assembly during a rigorous caucus process.

But the Senate ripped them from their budget, angering Colón and sparking a backlash against Dem Sen. Tim Carpenter, whose Milwaukee district includes a sizable Latino population.

The uproar against Carpenter was touched off by a late-night e-mail he sent to a constituent that was leaked to the press. In the e-mail, Carpenter took credit for removing joint and several liability and the immigrant initiatives, saying he was “able to convince” his caucus to jettison the provisions.

Colón was widely speculated to be named to the conference committee, given that Assembly Dems would want his JFC experience and would want a Milwaukee representative on the panel. If there is indeed a conference committee, and if Colon is a member, it's clear to observers he would fight hard to get the provisions in the final package.

-- Another tricky issue could be the Milwaukee School Choice enrollment cap, which the Assembly reduced by 1,000 students but the Senate didn’t alter.

The issue is divisive even among Milwaukee legislative Democrats.

-- Observers also look at budget cuts to the Department of Justice as a potential wrench in the works. The JFC cut more than 5 percent from the DOJ budget, but the Assembly, perhaps sensitive to the public campaign Republican AG J.B. Van Hollen waged against the reductions, made the department’s budget whole.

Decker, meanwhile, penned a column calling out Van Hollen, saying he had to live up to his campaign promise to “do more with less.” The JFC cuts were included in the Senate budget.

-- Perhaps the biggest schism between the Assembly and Senate versions, certainly in terms of dollars, is the discrepancy in transportation funding. The Assembly kept the oil profits tax Doyle penned in their plan, but removed anti-pass-through language that many saw as constitutionally challenged. Instead, the Assembly re-worked the tax to allow oil companies to turn part of the assessment back on consumers.

Decker, who holds funding for road projects as a top priority, was clear in his disdain for the Assembly plan. In the Senate plan, the oil profits tax is eliminated, and funding for roads is derived through the elimination of the capital gains tax exclusion.

Observers say the capital gains move may stand a chance of making it to the final bill turned in to Doyle. For one, they point out, it’s an easier pill to swallow politically, because it affects far fewer people than an across-the-board gas tax increase, and it's harder to put in a 30-second sound bite come election time.

What will be the biggest hurdle as Dems negotiate with themselves under a looming June 30 deadline?

Budget observers say the issues that blow up into major stalemates sometimes are minor provisions that evolve into a test of wills.

But the observers also say that there will be pressure on the Dems, who control both houses of the Legislature and the governor's office for the first time in more than 25 years, to show they can get along and govern.

WOOD COY ON WHETHER DEMS CAN COUNT ON HIS BUDGET VOTE AT THE END
Rep. Jeff Wood has a reputation for being unpredictable, a mark cemented when he switched his party affiliation from GOP to independent the day he turned in nomination papers on the final filing day last year.

But Wood proved dependable last week, when his vote was the difference between adoption and failure of the budget bill.

“I told the Democratic leadership early on they could win my vote but they couldn’t count on it,” Wood said.

But Wood tells WisPolitics.com that doesn't necessarily mean he will be a "yes" the next time around. "Obviously things are going to be changed," Wood said. "They could keep my vote; they could lose my vote."

Democrats have slim 52-46 majority in the Assembly. Rep. Bob Ziegelbauer, D-Manitowoc, had been public about his intention to vote against the bill. And before the all-night session was done, Rep. Margaret Krusick, D-Milwaukee, would also vote against the bill. She told WisPolitics on Thursday she'd likely be a "no" vote again, saying she was following the will of her district.

The importance of Wood's vote was heightened when Dem Rep. Nick Milroy of Superior had to take leave unexpectedly to be with his wife, who was in the hospital. With Wood's help, the budget passed on a 50-48 vote. Fifty votes are needed to advance an appropriations bill from the Assembly.

Wood said he kept a running list of the “most egregious or potentially” damaging proposals in the budget as it moved through the committee process. Before it came to the floor in the Assembly, he went over his concerns with the Dem leadership, and “they accepted enough of the things that I wanted removed to win my vote,” he said.

Those troubling provisions included prevailing wage requirements for tax incremental finance districts and joint and several liability, both of which were removed in Dem caucus deliberations.

Wood, of Chippewa Falls, says he hasn't made a decision about running in 2010, when he would likely be a top target for Republicans looking to regain the seat and exact some revenge. Republicans suggest Wood may have gotten assurances from Dems that that they'll pour a lot of resources into next year's election to protect him if he runs.

Wood said he was approached by Dems about receiving some earmarks for his district, though there were no specific offers.

“I was asked if there’s anything that I wanted added or wanted to talk about, and I said no,” he said.

“I don’t like that way of doing things (through earmarks). But I don’t think this was unique. That’s pretty much how it goes unfortunately,” he said.

Wood also denied his support of the majority Dems’ budget was an attempt to wrangle for a committee chairmanship.

“I’ve got three kids at home, I kind of like not having a chairmanship,” Wood said with a laugh.

Listen to the interview with Wood.

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