WISCONSIN: State Sees Imbalance Ahead
BYLINE: Yvette Shields
The state faces a $1.6 billion structural shortfall if departmental increases are granted in the next biennial budget, according to the latest revenue projections for the two-year spending plan that will be released in January by Gov. Jim Doyle.
The report, released Monday by the Department of Administration, marks the official start of Wisconsin's budget season. Doyle releases his budget early next year, and it is then reviewed by the Legislature's Joint Finance Committee, which adopts its own version to be voted on by the Assembly and Senate.
"Gov. Doyle has shown over the course of two consecutive budgets that he can fund its priorities, provide targeted tax relief, and create an environment for economic growth without raising taxes," Department of Administration Secretary Steve Bablitch said in a statement. "This will continue to be our approach for the 2007-09 budget."
The deficit is significantly lower than the $3.2 billion shortfall Doyle inherited four years ago, and on par with the one the state addressed two years ago in its $52.8 billion fiscal 2006-2007 budget. Budget officials had previously believed the deficit would be smaller based on the assumption that tax revenues would increase by 5% next year.
The latest projections forecast a 3.6% increase in the first year of the new fiscal biennium beginning July 1 and 4% in the second year. Various tax breaks are also expected to cost the state $600 million. The budget deficit includes a continuation of Wisconsin's commitment to pay on average two-thirds of public school expenses, a $400 million increase in health care funding, and pay raises for state employees.