Democratic lawmakers late Thursday voted to bridge a $1.6 billion budget gap by taxing outpatient surgery centers in the same way as hospitals, refinancing state debt and making promised cuts to schools, local governments and state agencies.

After days of intense, closed-door talks, Democrats on the budget committee also approved mandates on insurers to cover the treatment of autism and mental health as well as controversial overhauls of rules governing automobile insurance and liability lawsuits.

The sweeping 67-page motion, approved around 10:20 p.m. on a party-line 12-4 vote, included millions of dollars newly earmarked for local projects, with much of that in Dane County.

Rep. Mark Pocan, D-Madison, co-chairman of the budget committee, said the plan dealt responsibly with a widening budget hole brought on by falling tax revenues.

“We’ve been forced to make very deep painful cuts but we’ve also worked very hard to make sure that they didn’t go (any) further,” Pocan said.

The broad outlines of the deal should be able to win final approval from the Assembly, Senate and Gov. Jim Doyle in the coming weeks, said budget committee co-chairman Sen. Mark Miller, D-Monona.

“That’s why it took so long,” he said.

Rep. Robin Vos, of Caledonia, the top Assembly Republican on the committee, said the “mega-motion” cut spending too little and raised taxes too much during a difficult economy that has threatened voters’ livelihoods.

“It loses the opportunity to help ease the fears of our friends and neighbors,” Vos said. 

The proposal would cut state spending on schools and local governments by around 2.5 percent. It would also try to keep school districts from making up that cut in state aid with higher property taxes on homeowners. It would tighten limits on how much money schools can raise and use $55 million in state money to buy down property taxes.

The proposal put forward a new tax of $44 million over two years on outpatient surgery centers that would draw down more federal money to pay back the centers, increase their state payments and help reduce the deficit by $21 million.

Eric Borgerding, a lobbyist for the Wisconsin Hospital Association, whose members operate some of the outpatient centers, said his group hadn’t yet taken a position on the measure. But the proposal looks similar to a tax on hospitals that the group supports and could increase the currently inadequate payments that some centers receive to treat patients under the state’s Medicaid health-care program, he said.

But there are other centers run by physicians that are not affiliated with hospitals. Centers which do not take as many Medicaid patients would see fewer benefits from the proposal.

Sheri Krause, a lobbyist for the Wisconsin Association of School Boards, said the budget fix would make it harder for school districts to hold down teachers’ salaries and handle cuts in state aid. That’s because of a provision sought by the state teachers’ union that would keep districts from going to arbitration in contract negotiations unless unions agreed to that.

“It’s unfortunate they’re not looking to help school boards handle these (funding) cuts,” Krause said.