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Senate Democrats pitch budget shortfall repair plan

A vote by the full Senate Tuesday will set in motion the second round of the battle over the state budget.

The Senate should likely pass its version of a plan to fill in a budget shortfall of about $652 million that was caused by an economic slowdown yielding lower-than-expected tax revenues.

Three plans from three government powerhouses � Democratic Gov. Jim Doyle, the Democratic Senate leadership and the Republican Assembly leadership � will face off with different strategies for filling the hole.

Should negotiations among them fail, some expect a stalemate in a special committee to rival the last budget battle.

The Senate�s plan, passed Thursday out of the Senate Finance Committee on a 6-2 vote, addresses the problem with a plan that incorporates tax increases for businesses and hospitals.

�The Senate budget repair bill is a good compromise to move our state forward during this challenging time,� said Senate Majority Leader Russ Decker, D-Weston, in a statement.

According to Decker, the plan lowers taxes on Wisconsin businesses by closing a loophole that gives a break to businesses that have their headquarters outside Wisconsin.

�Closing loopholes that large, profitable businesses use to shove their tax bill onto the backs of small business owners in Wisconsin means we can lower taxes for those who play by the rules and make the tax code fairer for everyone,� Decker added.

Proponents lauded the Senate plan as a compromise because it includes the hospital tax championed by Doyle and includes a delay for a school aid payment proposed by the Assembly Republicans.

However, the Democrats� plan does include significant tax increases, though Doyle has said he hoped not to raise taxes and Assembly leaders have vowed to fight any plan that would raise taxes.

�The Senate plan seems to rely on massive tax increases to fill in a deficit, and I don�t support taxing people or businesses for fixing what is a state government problem,� said Rep. Scott Suder, R-Abbottsford.

Suder called the tax increases a �nonstarter� and said the Assembly plan focused instead on reducing state government.

�Clearly the Senate would prefer to raise taxes, call it a day and go home,� Suder said. �We�re not about to do that.�

The Democrats, however, said their plan would prevent cuts to vital services and help stimulate the struggling economy.

The next step, provided the full Senate passes their plan, will be continued negotiations among leaders from both houses and the governor. Should those negotiations fail, a conference committee made up of members of both houses would be called to iron out the final plan.

The conference committee was last used in the drawn-out process creating the biennial budget the first time around, which was finished more than four months late.

�The last budget process was not easy, painful at times, and I don�t think many of us on either side of the aisle want to go back to that kind of process,� Suder said.

He added tax increases would be the sticking point for the negotiations.

�If the state Senate continues to demand tax increases, it may become a long, protracted process,� Suder said. �We�re prepared to fight the battle on tax increases as long as it takes.�

The Senate plan seeks to stimulate the economy by bringing back a proposal to build a commuter rail line connecting Milwaukee, Kenosha and Racine.

They would pay for the development by raising the current fee of $2 for car rentals in those areas to $15.

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