End to budget impasse could be near: Assembly GOP accepts Gov. Walker's offer to shift more funding to roads

MADISON -- Gov. Scott Walker's proposal to give up on $200 million in proposed income tax cuts and instead use the money to help pay for roads won approval by Assembly Republicans on Thursday, but the Senate is still not fully on board.

"There's no deal yet, that's for sure," Republican Senate Majority Leader Scott Fitzgerald said after discussing the proposal with senators.

His comments dampened enthusiasm expressed by Assembly Republican leaders that the three-week budget impasse could be nearing an end.

"We believe the leadership that you have displayed has bridged the gap between our two houses," Assembly Republican leaders wrote Walker in a hand-delivered letter.

Walker told reporters during stops in Green Bay and Sturtevant that his proposal was a reasonable compromise he hoped the Senate would accept. Fitzgerald said he planned to talk with Walker about it again Thursday night.

Republicans who control the Legislature have been unable to reach a budget deal with Walker, leading to the two-year spending plan being three weeks past due. Current spending levels continue during the impasse, which has largely turned on how to deal with a $1 billion shortfall in transportation funding.

Eliminating the personal property tax, which is primarily paid by businesses on such things as furniture and other non-residential property, has been a priority of the state chamber of commerce and others. There is still a "lot of support" to eliminate it among Senate Republicans, Fitzgerald said.

Assembly Republicans have balked at borrowing as much as $712 million, as the Senate proposed, to pay for roads. Walker initially proposed $500 million in borrowing and later lowered it to $300 million.

Under the latest Walker offer, the ultimate level of borrowing is fluid, said state Rep. John Nygren, co-chairman of the Legislature's budget committee. Walker told reporters in Green Bay that his plan would eliminate almost all new state borrowing for roads, except for borrowing contingent upon the state getting money from the federal government to pay for it.

He and other Assembly leaders told Walker in the letter that using the $200 million originally intended for an income tax cut was a "positive step forward" to finding a long-term transportation funding solution.

Assembly Speaker Robin Vos also discussed levying a new fee for electric vehicles, Fitzgerald said. Vos raised that idea during a Wednesday meeting with the governor, Fitzgerald said, despite Vos earlier saying he had conceded that the gas tax and vehicle fees would not go up in this budget given opposition from Walker and the Senate.

Using the $200 million as a one-time funding source for roads, rather than locking it in forever as part of a tax cut, could also free up the money to be tapped later for incentives to help lure Taiwanese manufacturer Foxconn to Wisconsin, Nygren said.

No money is planned to be put in the next two-year budget for Foxconn, he said, but decisions made now could affect the ability of the state to follow through on any commitments it makes to the company.

Fitzgerald said he expected any incentives for Foxconn to be separate from the budget and he doesn't have any information on what may be offered.

Also on Thursday, Nygren sent a letter to budget committee co-chair Sen. Alberta Darling saying the panel should resume its work as soon as next week. The Joint Finance Committee must vote on the final pieces of the budget before the $76 billion plan gets sent to the Senate and Assembly for final approval.

Fitzgerald said the committee could meet next week, but called that "aggressive."