By Brendan O'Brien
MILWAUKEE (Reuters) - Wisconsin lawmakers approved on Friday a two-year spending package that featured several fiscally conservative provisions, including an income tax cut, a broadening of the state's educational voucher program and a rejection of federal funds for Medicaid expansion under the Affordable Care Act.
The Republican-led state Senate passed the $68 billion budget with a 17-16 vote shortly after midnight on Friday, sending the legislation to Republican Governor Scott Walker, who is expected to sign it.
The proposed budget, which contained a $650 million income tax cut over the next two years, was approved by the Republican-led Assembly with a 55-42 vote on Wednesday.
"We believe it will lead to generating more jobs and creating more revenue," said Republican Senator Alberta Darling on Thursday as the budget was debated.
"This budget positions us to live within our means, grow the economy (and) to hold the line on taxes."
Democrats argued that the spending plan fell short of addressing the state's lagging job growth and helping those living in or near poverty.
"If you are poor, this is a punishing budget," said Democrat Senator Jon Erpenbach.
He said during his floor speech on Thursday that Wisconsin ranked 44th in the United States in job growth in 2012.
"This budget doesn't help the majority of Wisconsinites, it hurts the majority of Wisconsinites."
The budget expands the educational voucher program statewide, which is currently only available in Racine and Milwaukee.
The provision allows 500 students, whose families earn less than 185 percent of the federal poverty line, to use publicly-funded vouchers to attend private schools throughout the state in 2013-14, and 1,000 students in subsequent years.
The legislation also formalizes Walker's refusal to expand BadgerCare, the state's Medicaid program and, as a result, rejects federal money made available by the Affordable Care Act.
The state would have received $4.2 billion during the next five years in federal money if it expanded BadgerCare, according to HealthWatch Wisconsin, an organization that analyzes health care policy.
The budget legislation also moves about 87,000 recipients off the program and into the health insurance marketplace created by the Affordable Care Act and makes about 82,000 childless adults who are under the federal poverty line eligible for BadgerCare.
A tuition freeze throughout the University of Wisconsin system, a provision giving the governor more latitude to sell state property and legalizing bail bondmen are also part of the spending plan.
(Reporting By Brendan O'Brien)