State faces 'tough choices' to address budget deficit
Wisconsin educators are keeping a close eye on the State Capitol after the Legislative Fiscal Bureau on Wednesday (February 13, 2008) announced Wisconsin is facing a significant budget deficit.
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Budget deficit What is the projected deficit?
The projected 2007-09 budget deficit is $415.9 million (after Department of Administration reduction actions). What is a budget
adjustment bill?
State statutes require the governor to submit a budget adjustment bill when state expenditures are projected to exceed revenues by a certain amount. This bill must contain recommendations for correcting the imbalance. Why is it needed?
State officials have completed a review of general fund tax collections that shows collections from December and January were considerably weaker than in previous months. Forecasts for February point to further weakness in general fund tax collections. What can I do?
Take time to send a Cyberlobby message to your legislators, urging them to protect public education in any budget adjustment bill. |
State leaders have begun initial discussions about a possible budget adjustment bill. The Legislative Fiscal Bureau is projecting a 2007-09 budget deficit of $415.9 million, after Department of Administration (DOA) reduction actions are carried out. Those actions include reductions in state agency spending and rolling over short-term debt.
Governor Doyle has directed state agencies to take immediate action that will save $111 million over the biennium. That sum is in addition to the $200 million Doyle’s budget already saved in government spending. “We will have other tough choices ahead of us,” the governor warned.
“We can get through this in a way that doesn’t raise taxes and protects what is most vital to Wisconsin – education, health care and economic development,” he said.
WEAC President Mary Bell urged state officials to protect public education. “Cuts in public education funding will harm schools and children,” she said. “Schools have been forced to lay off staff and cut programs since revenue controls were enacted in 1993. Additional cuts would severely damage the quality of education for Wisconsin students.”
The actions were recommended after a review of general tax collections that showed collections from December and January were considerably weaker than in previous months. Forecasts for February point to further weakness in general fund tax collections.
State leaders indicate they will work quickly to address the issue. Senate Majority Leader Russ Decker (D-Weston) has suggested one place the state could bridge the gap is to close the “Las Vegas loophole” that allows corporations to set up “dummy corporations” in other states to avoid state taxes.
Decker said Wisconsin’s dilemma mirrors the troubled national economy. “Seven years of President Bush’s tax cuts for big oil and the wealthy combined with failing to invest in our country’s needs have produced a lagging national economy and an enormous federal deficit that is now pulling our state down too,” Decker said.
“Our state now faces a shortfall that will require the state to squeeze every nickel out of every dollar while we tighten our belt,” Decker continued. “Our top priority will be to make sure that these cuts don’t fall on the neediest of our citizens, public education and our state’s infrastructure needs.”
Decker said the state can grow its way out of this if businesses and families are given the tools they need – more highly skilled workers, a stronger infrastructure and a fairer tax system.
Assembly Speaker Mike Huebsch (R-West Salem) said raising taxes to address the shortfall is not an option and promised to work cooperatively in finding a solution. “Assembly Republicans will continue to work with Governor Doyle and our legislative colleagues on both sides of the aisle toward a solution to this budget shortfall,” he said.
Posted February 15, 2008