Monday, November 20, 2006
State still in a hole of $1.6 billion
Does it surprise anyone that the Doyle Administration has not fixed the budget since he was elected in 2002? I mean, after raiding the transportation fund, jacking up user fees and other ways of cooking the books, I thought we were home free.
Guess not.
A report made public today identifies a $1.6 billion gap between what state officials say they need to run their agencies over the next two years and what taxes and other revenues will bring in over that period.
The figure is the latest estimate of the so-called "structural deficit" facing Democratic Gov. Jim Doyle and the Legislature next year.
Despite the imbalance, state Administration Secretary Steve Bablitch said Doyle will live up to his recent campaign pledge to make tough choices necessary to control future spending and submit a 2007-'09 budget to the Legislature that won't raise general state taxes. During the campaign, Doyle also proposed new tax breaks that would cost $157.2 million a year.
So exactly how is he going to pay for these new tax breaks? I don't think he's going to cut more spending.
In a report marking the unofficial start of the next budget cycle, Bablitch also called that potential $1.6 billion deficit a "considerable improvement" over the $3.2 billion gap that Doyle and the Legislature faced four years ago.
The new report came two weeks after the Democratic governor was re-elected in a campaign in which the size of the deficit was often debated.
During the campaign, Doyle promised to close any new budget deficit without raising any general state tax - a pledge that included sales, income and corporate income taxes.
But on Aug. 15, Doyle appointee David Schmiedicke, the state budget director, went a step further and issued a report that said 5% annual growth in general-purpose tax collections "will offset the advanced commitments" - or wiping out a potential deficit altogether - during the next two years. The Doyle campaign then used that report to defend the governor's budgets since taking office in January 2003.
Today, however, Bablitch said general-purpose tax funds will grow by only 3.6% in the first year of the two-year cycle, which starts July 1, and by 4% in the following year.
Every 1% drop in tax collections costs state government about $124 million in income.
So in other words, Doyle gave voters a November surprise--the numbers weren't right and now we're going to pay.
During the campaign, Republican gubernatorial candidate Mark Green accused Doyle of mismanaging the budget and creating a future deficit. Reacting to the new deficit estimate, Green campaign manager Mark Graul said, "I could have sworn Governor Doyle told us there wasn't a deficit."
Yes. He said that. But doublespeak is custom for Democrats.
But Bablitch said a combination of a "modest" slowdown in Wisconsin's economy and $600 million in tax cuts and credits, enacted over the past two years but coming due in the next two-year budget, will force elected officials to confront a potential $1.6 billion deficit in the two-year budget cycle that starts July 1.
"Important changes to tax laws in the past several laws will mean that the state will not be able to simply grow its way out of budget shortfalls, as it did in the 1990s," Bablitch told Doyle in the report.
Just goes to show you how sleezy Jim Doyle and his cronies really are.
