Thursday night (June 25) the budget conference committee approved a comprehensive agreement that resolves the budget differences between the Assembly and the Senate. The conference committee’s revised budget bill was later approved by the Senate by a vote of 17-15, with all the Republicans and one Democrat voting against it. An Assembly vote is expected later today or tomorrow.

Most of the issues we have been following over the last six months are unchanged since the Joint Finance Committee (JFC) wrapped up its work on the budget about four weeks ago. But there are numerous fiscal and policy issues that have been changed since then, and a 129-page Legislative Fiscal Bureau summary explains those issues and how they were resolved.

The biggest change made by the committee is that the bill deletes the proposed oil company tax, which would have generated $260 million for transportation spending over the next two years. The Senate had proposed replacing that revenue by eliminating the current income tax break for capital gains. The conference committee didn’t go that far, but their compromise generates $72.3 million by reducing that tax break to an exclusion of 30 percent of capital gains (compared to 60 percent now, and 40 percent in the JFC budget).

The rest of the hole left in transportation financing is filled primarily by increasing bonding, but there’s also a reduction in the transfer of funding from the Transportation Fund to the General Fund. That necessitates a number of GPR spending cuts, including these two:

• An additional $7 million GPR per year (and $15 million/yr in federal matching funds) from spending for Medicaid and related program like SeniorCare and BadgerCare plus.
• An added $3 million per year cut from tobacco control grants.

On some of the other issues that were still unresolved, the committee took the following actions:

• Cuts start-up funding for 4-year-old kindergarten programs, by $1.5 million in 2010-11, although that restores half of the base funding level eliminated by the JFC.
• Deletes the provisions that would have eliminated the Learnfare program.
• Approves full indexing of the formula for calculating Homestead tax credits.
• Approves the Senate amendment increasing the county share of the costs at the mental health institutes.
• Rejects the proposed indexing of the minimum wage.

Monday morning we will post an updated version of our comprehensive comparative summary of the budget.