Republicans who control the state Senate failed to muster the necessary votes Tuesday to override Democratic Gov. Jim Doyle's veto of a GOP plan to limit property taxes.
Supporters predicted a backlash against Democrats by voters tired of paying ever-rising property taxes.
But Democrats said the temporary caps, which backers refer to as a "freeze," would result in unacceptably deep cuts to schools and local services while providing little long-term relief.
Seeking to regain control over what had long been considered a liberal issue, Democrats introduced their own property tax relief plan Tuesday that would increase tax credits for homeowners.
But Democrats provided few details of how the $400 million program would be funded, especially after a painful round of budget cutting, and Republicans called the last-minute proposal a red herring.
"To be asked to be taken seriously with a plan where we don't know where the money's coming from is taking a cup to bail out a boat full of water," said Assembly Speaker John Gard, R-Peshtigo.
Democrats Tim Carpenter and Gary George, both of Milwaukee, and Dave Hansen of Green Bay joined the Senate's 18 Republicans to keep the caps, vetoed by Doyle from the Republican version of the 2003-05 budget. The 21-12 vote fell one vote short of the 22 needed to override the veto.
"It's not enough to just say, 'Trust local government' (not to raise property taxes) when I think the people in my district, the elderly, are demanding some action," said George, who is contesting a recall drive.
Ordinarily, members of the Assembly would have gone home after the vote failed to clear the Senate. But lawmakers called an extraordinary session of the Assembly Tuesday night to consider a separate bill nearly identical to the measure vetoed from the budget.
Democrats chafed at the move, which they said was intended only to give Republicans in the Assembly the same ammunition in the 2004 elections that Senate Republicans are expected to take from Tuesday's vote. Doyle most certainly would veto the legislation if it passes.
"What you want is a political vote .
.. . It's a cynical political strategy and everyone who has been in this building for more than two years knows it." Sen. Chuck Chvala, D-Madison, told his Republican colleagues.
The GOP plan would have frozen total property taxes for the next three years at last year's levels for counties, cities, villages and towns. The only exceptions would be for new development that expands a community's tax base, or if voters approve higher spending.
The plan also would have tightened existing caps on school districts and limited the growth of technical college levies at 2.6 percent a year.
Even with the limits, property taxes were projected to go up about 2.7 percent this year. But that's less than the 7.2 percent taxes could go up without caps under the budget Doyle signed, according to the nonpartisan Legislative Fiscal Bureau.
"I've heard people say, 'Oh, you can't do that. It'll hurt.' When I go around my district, people tell me they are darn lucky to have a job," said Sen. Alberta Darling, R-River Hills.
High property taxes are also driving businesses out of the state, costing Wisconsin jobs and hurting the economy, Republicans said.
But Democrats called the plan a "hoax" and a "gimmick" that takes control away from locally elected authorities. Taxes will still go up under the "freeze," roads could crumble and thousands of teachers could be laid off, they said.
"The real story is that residential homeowners are paying the lion's share of property taxes" instead of corporations, the reverse situation from 30 years ago, said Sen. Judy Robson, D-Beloit.
Senate Minority Leader Jon Erpenbach, D-Middleton, compared the plan to imposing a "timeout" on ill-behaved children.
"I don't know what gives (Republicans) the nerve to think they can step in and run the city of Middleton better than the officials of Middleton can," Erpenbach said.
But Senate Majority Leader Mary Panzer, R-West Bend, said a timeout was needed until state and local officials can reform how programs are paid for.
"This is the first step," Panzer said of the tax caps.
To pay for their plan, the Democrats revived a provision of Doyle's original budget - removed by the Legislature - to borrow $200 million from the state patients compensation fund to cover expected cost increases in Medical Assistance. The fund, supported by fees on medical professionals, helps pay malpractice claims.
That would free up $200 million in reserves Doyle had set aside for Medical Assistance. The remaining $200 million would come from unspecified cuts.