Here & Now

Loudenbeck: Income Tax Compromise Could Mend Budget Battle

Frederica Freyberg:

Amy Loudenbeck is a state representative from Clinton, Wisconsin and she sits on the Joint Finance Committee. She joins us this week with the perspective of Assembly Republicans to the Senate proposal and the start of a budget break-through this week. Thanks for being here.

Amy Loudenbeck:

Thanks for having me.

Frederica Freyberg:

We hope it’s a break through. The governor’s approval of putting the $200 million income tax revenue toward roads, did that break the impasse between the Senate and the Assembly?

Amy Loudenbeck:

It doesn’t appear it has with the Senate. But I will tell you that Assembly Republicans are on board with what the governor proposed. We think it could break the impasse and be a real win for both of our caucuses and the governor and the taxpayers and help to meet the transportation and infrastructure needs that we know are all across Wisconsin.

Frederica Freyberg:

How does the $200 million offset $712 million in bonding? Where’s the rest of that revenue?

Amy Loudenbeck:

It's going to be a leaner transportation budget. For Assembly Republicans, as you know, we had contemplated even going to base if we had to because we recognized the trajectory of debt payments and debt ratio to revenues was becoming unsustainable. This impasse would actually free up an additional $200 million we could use to pay cash for our road projects. I’m sure we’re willing to accept some additional bonding, but it will be a leaner, overall transportation dollar amount versus what the Senate has proposed.

Frederica Freyberg:

Any idea how much bonding the Assembly would be willing to accept?

Amy Loudenbeck:

I believe if we did an offset of the $200, maybe we would do the $300 million to basically have the same commitment that the governor had put forward. I also know we have talked in our caucus that we would be willing to go forward with additional bonding if we could put additional revenues in place to pay for the debt service associated with that bonding.

Frederica Freyberg:

Where would that revenue source come from?

Amy Loudenbeck:

There are several revenue options. For example in the Fiscal Bureau papers. If any of those were acceptable to both caucuses, I think that we would — even if we could do $20 million in additional revenue that we put into the segregated transportation fund that would give us the leverage we needed for an additional $100 or $200 million worth of additional bonding.

Frederica Freyberg:

As we’ve discussed, Senator Fitzgerald as of today is saying there isn’t a deal. What’s your message to him?

Amy Loudenbeck:

Our message is hopefully we can come together. Hopefully we can take advantage of an opportunity that has been presented that we know the governor supports and we know the Assembly supports. And maybe reconsider their position or really look at what other options might be available because we know that if it’s down to transportation — and I think we agree on so many areas, and it’s a good budget. We have property tax reductions. We’re investing significant dollars into K-12 education. Meeting our MA obligations to say there’s always going to be work that we need to do next session. So the priorities of the Senate are also priorities for our caucus, but what can we do in this budget and let’s sit down and hammer this out.

Frederica Freyberg:

Meanwhile, describe the role of having to prepare for an incentive package to Foxconn has in all of this.

Amy Loudenbeck:

I think the flexibility of what the governor proposed is going to be key to give us some breathing room not only in this budget. But if incentives needed to be put forward in the next biennium that were not locked into any sort of structural commitment. If you look at what the governor proposed initially and Senate proposed initially, the tax cuts or the personal property tax cuts would have been in place over the next biennium as well. Where if we’re using one-time money of $200 million to basically backfill the gap that we have in transportation, that’s going to reduce our structural deficit by about $200 million. We have that built-in flexibility, and I think that’s smart for a lot of reasons. But Foxconn being one of them.

Frederica Freyberg:

Are you ready to take the budget to Joint Finance next week?

Amy Loudenbeck:

I'm ready. We have tried to be really flexible and tried to make ourselves available whenever the time was to meet. We have met as our Assembly finance team and made our decisions on DNR and DATCP and some of the other remaining issue areas. Education, I think we’re really close. I think we can start to make progress on the things were we do have agreement and just hopefully keep that momentum going. And if transportation is the last thing that we vote on, I think we still have at least two days of work, if not three, and so we could continue to meet and vote and close out different issue areas so that we’re close. But yes, I'm ready.

Frederica Freyberg:

Representative Loudenbeck, thanks very much.

Amy Loudenbeck:

Thank you.