Doyle wants to tackle budget problem this year

DATELINE: MADISON Wis.

Gov. Jim Doyle wants to address a projected state budget shortfall of $400 million before it gets worse and the Legislature quits working for the year.

Since this is the first year of the two-year budget, Doyle could wait until later to deal with the problem. But the governor said Tuesday it makes sense to start dealing with it before the Legislature adjourns for the year in mid-March.

"If it's a significant number, which I think it will be, I think it's best to get it done quickly," Doyle said. "For one thing, you have to start making the savings right away."

The latest unofficial estimate is the budget will be between $300 million and $400 million short. The new official estimate is expected in February.

The budget already calls for state agencies to cut $100 million by June 30. On top of that, Doyle's administration has already called for agencies to stop unnecessary travel, hold vacancies open and not renew or enter into new leases.

Finding additional savings will be even tougher, Doyle said.

Certain areas will be protected from cuts, including the University of Wisconsin, education and health care, he said.

However, those areas will be examined for savings that wouldn't reduce services, Doyle said. One possibility could be consolidating and reorganizing state government operations as workers retire, he said.

The Legislature will have to approve any changes to the current two-year budget. It took lawmakers eight months to agree on that plan, the second longest budget debate in at least 40 years.

Republican lawmakers have urged Doyle to solve the current budget problem with spending reductions and cost savings and not tax increases. Democratic Senate Majority Leader Russ Decker, D-Weston, said the most vulnerable state residents need to be protected from cuts.

Doyle's comments on the budget came after he spoke at a meeting of Thrive, the Madison Region Economic Development Enterprise.

Doyle told the group of business, government and university leaders that despite the uncertainty of the national economy, the state must move ahead with his economic development agenda. That includes bolstering research and development, targeted tax breaks for businesses and a new health insurance pool for small businesses.

Doyle argued the insurance pool would help lower costs for those workers and employers. Under the proposal, workers could chose a plan from a pool of competing insurers instead of having to take whatever their employer offered.

The insurance industry has been resisting a part of the plan requiring a community rating system under which different insurers would have to set prices based on everyone's collective claims.

The plan also relies on a state subsidy, perhaps as high as $100 million, which is another hurdle to its passage. The idea isn't expected to be taken up by the Legislature until next year.