The Wisconsin state Senate passed legislation Friday that will patch the state’s $1.1 billion budget deficit by using money from the state’s tobacco settlement.
The plan also includes cuts in state spending, a reduction of cuts to the UW System as passed in the Assembly and saving shared revenue aid for local governments.
Using tobacco settlement money means drawing the $5.9 billion that is left of the $794 million from the legal settlement Wisconsin reached with the tobacco companies to help pay for the health costs caused by smoking.
Gov. Scott McCallum originally proposed using the tobacco settlement money to repair the deficit, but certain lawmakers said it would be a mistake to drain the fund as a budget shortfall quick-fix.
Senate Democrats also differed from the governor’s plan by maintaining the $1 billion in funding to shared revenue which funds cities, counties, villages, and towns. Democrats said without shared revenue, critical services like police, fire, libraries, and garbage removal would be cut.
Assembly Republicans have criticized the Senate’s plan, saying it will not permanently fix the budget and will instead create a deficit in the budget beginning on July 1, 2003.
Sen. Judy Robson, D-Beloit, said the tobacco settlement money is for establishing a strong tobacco prevention program and using the funds is a mistake.
“The $25 million is a strong base with which to establish an effective tobacco prevention program,” Robson said. “The Tobacco Control Board needs sustained funding in order to do its job, which is to discourage youths from starting to smoke and to encourage smokers to quit.”
McCallum praised both Houses for not increasing taxes to deal with the budget deficit.
“It is important to recognize that we are all in this together, and that we must act quickly,” McCallum said in a release.
But some, like Sen. Mary Panzer, R-West Bend, said the Senate’s budget bill is essentially a $1.26 billion credit card budget.
“I hope you have done your homework, because if you haven’t, this is not correctable,” Panzer said to [Sen. Chuck] Chvala [D-Madison]. “You are talking about a tax increase. You may not see it today, but it will be there. The only question is what it will look like.”
But Chvala said the state’s economy would grow and there was no reason for concern.
“Stop sucking lemons,” Chvala said to Panzer. “Let’s be optimistic about the future of Wisconsin.”
Chvala said the plan offers real solutions for the state’s budget deficit.
“Senate Democrats took the steps we needed to make state government more efficient,” Chvala said. “But we also preserve the programs that make Wisconsin a great place to live and work.”
Before the governor can sign a bill, the two Houses must pass the same version of the bill. A committee will hammer out differences between the Assembly and Senate bills.
