Doyle announces tax hikes and spending cuts to fix budget hole
Wisconsin NewsFacing a $528.8 million shortfall in the current biennial budget, Gov. Jim Doyle announced plans that will cut $167.3 million from that number.
By: Brady Bautch, RiverTown Newspaper Group
- Gov. Jim Doyle
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Facing a $528.8 million shortfall in the current biennial budget, Gov. Jim Doyle announced plans that will cut $167.3 million from that number.
The remaining $361.5 million deficit Doyle said will be dealt with in his coming 2009-11 biennial budget.
"This bill lays critical groundwork for getting our state's economy back on track and creates a platform for putting federal stimulus dollars to work quickly and efficiently," said Doyle.
To fix the hole, the governor said he is cutting $125 million in state spending including $500,000 by the state Legislature.
Doyle told reporters Wednesday that cuts won't affect highway construction spending.
However, along with those spending cuts Doyle will ask the Legislature to implement a 2.5 percent tax on hospital general revenues, which he says will get the state $900 million in federal Medicaid funds.
Doyle tried to push that hospital tax through the Legislature last year, but it was blocked by Republicans who then controlled the Assembly. The GOP argued that it would increase health insurance costs on Wisconsin families.
According to Doyle administration officials, if the state does not enact the hospital tax by Feb. 20, it will lose out on $80 million in federal funds.
The measure would also enact the Adopt the Main Street Equity Act. Wisconsin would join other states in setting uniform standards for collecting sales taxes from online retailers. Minnesota and Iowa also participate in the program.
According to Doyle, the proposal clarifies the state Supreme Court decision in the Menasha computer sales tax case to subject all prewritten computer software packages to the sales tax.
Doyle said the tax is expected to general $9.4 million in this fiscal year.
The so-called I-Pod tax would also be brought back. This is a sales tax on digital downloads and Doyle said it is expected to raise $10.9 million over the 2009-11 biennium.
"Now is not the time to be raising taxes on business or citizens. We need to be raising jobs not driving jobs from the state," said Rep. Kitty Rhoades, R-Hudson.
"Most of these are taxes we (GOP) stopped during the last session," said Rhoades.
Doyle's plan also provides for legislative oversight of funds from the Obama spending bill which is making its way through Congress. It also pre-approves $300 million in that spending for transportation projects.
Local projects included are:
The plan also calls for increased tax credits for angel and venture investments to help start-up technology companies.
It also calls for other tax credits aimed at job creation in the state including those for the modernization of dairy manufacturing and meat processing facilities.
The bill will also invest in providing access to child care and allow Doyle to pass his child care rating program - another program stopped by the GOP last session.
Also in the bill are protections for tenants and homeowners who are facing eviction or foreclosure.
The measure also contains money to train workers in green building.
"The package introduced today by Democrats neither solves the budget hole for 2009 nor stimulates the economy. This package will be passed by Democrats for one reason only - put $572 million in tax increases in place," said Assembly GOP leader Rep. Jeff Fitzgerald, Horicon, in reaction to Doyle's announcement.
"Families are struggling with this slowing economy and the Democrats' answer to stimulate the economy is to raise taxes on businesses and families. Clearly, this moves in exactly the wrong direction," he added.
Documents defining the bill are not expected to be released before Monday.
The Joint Finance Committee is expected to take up the bill on Tuesday, with the measure ready for full legislative consideration Wednesday or Thursday.
The Wheeler Report contributed to this story.
Tags: wisconsin news, doyle, budget, hole, plan
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