BUDGET DEAL REACHED IN MADISON

SOURCE: Milwaukee Journal-Sentinel

Gov. Jim Doyle and legislative leaders said Thursday state aid for local governments and public schools will be cut by 2.5 percent, and more than 1,400 state workers may have to be laid off, to fix the $1.6 billion drop in tax collections over the last three months.

"We have made responsible choices, ones that protect the middle class and have a lesser impact on our priorities, which are education and public safety," Doyle said at a Capitol press conference, where he was flanked by the co-chairs of the Legislature's budget-writing Joint Finance Committee, Sen. Mark Miller (D–Monona) and Rep. Mark Pocan (D–Madison).

Legislative leaders and aides to Doyle have been meeting privately for days, trying to figure out a way to fix the new shortfall that Doyle warned about two weeks ago. In February, Doyle recommended using federal stimulus funds and $1.7 billion in tax and fee increases to overcome a three-year deficit projected at that point to be $5 billion. That deficit has grown to $6.6 billion, because tax revenue has lagged far below projections.

Under the package, the $1.6 billion deficit would be eliminated by:

•Cuts to state agencies of 5 percent and reductions in aid to local governments and schools of 2.5 percent, for $669.7 million.
•State employee furloughs and rolling back a planned 2-percent raise for non-union state workers, $224 million.
•Adjusting what's paid to hospitals from a tax on their revenues, $165 million.
•Diverting a monthly charge approved by the Joint Finance Committee on phones and other devices used to call 911 to pay for police, fire and other emergency services, $100 million.
•Keeping health and child care tax credits at current levels and improving tax collections, $185.2 million.
•Refinancing debt to take advantage of low interest rates, $285 million.
Doyle warned that the cuts will be painful for both consumers and the state employees who provide services.

Earlier Thursday, Miller said the 16-member committee hopes to recommend a budget to the full Legislature by May 31 and will hold a two-day session to handle dozens of budget items.

The panel will meet Friday at 11 a.m. and Saturday at 9 a.m. to take votes on such items as aid to local governments and transportation and health care spending.

So let me get this straight...We got rid of the first deficit ($5 billion) with BORROWED federal stimulus money and $1.7 billion in increased taxes and fees. And, we are getting rid of this deficit ($1.6 billion) with cuts to local government and schools, another raid on segregated funds (hospital tax and cell phone tax) and refinancing debt? And you have faith in a plan from the same governor who has raided roughly $1.8 billion from segregated accounts as governor. What will we do if the economy continues to move in a lateral position, and revenue continues to come in below estimates?