MADISON — An attempt to end the budget impasse that has left Wisconsin as the only state without a new spending plan failed Monday night when the Republican-led Assembly rejected the so-called compromise offered by Democratic Gov. Jim Doyle.

The Democratic-controlled Senate passed the bill earlier Monday on a partisan vote. But opponents in the Assembly said the bill had about $1 billion in new taxes and was unacceptable.
The budget must clear both chambers and be signed by Doyle to become law. Current tax and funding levels continue while the Legislature tries to reach a deal.

The state is in a “fiscal nightmare” and nearing an emergency because the Legislature has failed by not passing a budget, Doyle said in a statement.

Essential services to protect the health and safety of Wisconsin residents will not be able to be paid for, Doyle said, because expenses are rising faster than the state can pay for them under current funding.

Republicans called Doyle’s warnings “Chicken Little” politics meant to scare people into passing his tax increases.

Legislative leaders who had been meeting to reach a compromise on the 107-day late budget had no new talks planned yet for this week.

“Senators, we need to compromise. Wisconsin needs a budget,” said Senate Majority Leader Judy Robson, D-Beloit, before pulling out a reference to a Kenny Rogers song. “You just have to know when to hold ’em and when to fold ’em.”

Sen. Mike Ellis, R-Neenah, said lawmakers still had a way to go to reach a deal that both sides could support.

“This budget is not even close to a compromise,” he said.

Republicans sounded a similar theme in the Assembly, saying they disagreed most strongly with higher cigarette taxes, a new tax on hospitals and a transfer of $175 million from a fund used to pay malpractice claims.

The bill passed the Senate with all 18 Democrats in favor and 14 Republicans against with one absent. By the same vote, the Senate also passed a transportation funding bill, which includes a new tax on oil companies, even though Doyle wanted to keep that issue off the table until later. The Assembly did not take that issue up, making the Senate’s action largely symbolic.

At least three Republicans were needed to switch sides in order for the budget to clear the Assembly. But 51 Republicans voted against it, one voted for it, and two Democrats broke ranks and voted against it.

Robson spokesman Josh Wescott assailed the Assembly’s vote, saying Republicans had decided to prolong “this national embarrassment” of not having a budget.

Assembly Minority Leader Jim Kreuser, D-Kenosha, said it was no surprise that people were calling it a do-nothing Legislature.

“We should be embarrassed we’re here today like this,” Kreuser said during Assembly debate. “Your side should be ashamed to not be able to compromise and work together.”

Lawmakers couldn’t agree on the first budget Doyle introduced in February, so after months of talks the governor proposed another one that includes many of the major ideas he put forth eight months ago.

Rep. Dean Kaufert, R-Neenah, said Doyle knew that because of the tax increase proposals his budget “didn’t have a chance in hell of passing.”

“This budget was set up to fail,” Kaufert said.

The bill includes a $1.25 per-pack cigarette tax increase even though the latest offer from Assembly Speaker Mike Huebsch, R-West Salem, was for a 75-cent cigarette tax rise. He had earlier supported the full increase.

Republicans also have refused to accept a 0.8 percent tax on hospitals designed to generate $285 million more a year in federal money to help pay for treating Medicaid patients.

The GOP opposition continues even though the Wisconsin Hospital Association, which had fiercely fought the tax since Doyle introduced it, said earlier this month it was no longer against the idea.

Also in Doyle’s proposal is a $175 million transfer from a fund used to pay medical malpractice claims, a move the Wisconsin Medical Society said would put the fund at dangerously low levels and may trigger a lawsuit to block it.

Republicans said it was impossible to know everything that was in the 1,625-page document since it wasn’t printed until late Monday morning, just hours before the votes.

Also on Monday, schools were being told by the state Department of Public Instruction how much aid they should expect for the coming year. Because there is no new budget, the amount of aid available to schools is unchanged despite both Republicans and Democrats agreeing to increase it nearly $80 million.

Without the additional money, schools could turn to property tax payers to meet expenses. The estimated impact could be an average of $27 on the owner of a $170,000 home.

Lawmakers have said that once they reach a budget deal, they can alter deadlines and other provisions in state law to ensure that the additional money gets to schools to avoid the tax increase.

There are many other implications of not having a new budget, including keeping thousands of University of Wisconsin students in the dark as to how much aid they will get from the state and delaying implementation of a new sex offender tracking law.

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