Wisconsin state budget

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The Wisconsin state budget operates on a biennium, covering two fiscal years at a time and decided by the state's Governor. Wisconsin is currently facing a budget gap estimated at $5.9 billion or 17 percent of the biennial budget. ^[1] In order to address the state's low revenue and increasing budget deficit Gov. Jim Doyle emphasized "This is clearly a time when we will have to make very deep cuts. This budget makes the largest cuts we’ve ever seen." However, Gov. Doyle said that despite necessary budget cuts education, health care, public safety and the state's job market must be protected from severe cuts that could endanger state programs. ^[2] In early 2009 the Legislature passed a budget repair bill that took $700 million off of the projected shortfall by raising taxes on some multistate corporations, taxing hospitals and applying the 5-cent sales tax to Internet downloads and specialized computer software. The Governor's current proposal for FY 2010 calls for a combination of budget cuts, approximately $2 billion in tax increases and $2 billion in federal stimulus funds in order to balance the budget. ^[3] At the end of the 2010-2011 biennium the Governor said that he expects to not have eliminated the deficit but have a positive balance of $270 million. ^[2]

For the first time in approximately 30 years, state lawmakers finalized the state budget before the June 30th deadline. On June 29, 2009 Gov. Doyle signed into law a $62.2 billion budget with several cuts and tax increases to help close the state's budget deficit. Some of the cuts included cuts include a five- to ten-percent decrease in funding for state agencies, 16 day furloughs and 1,400 state employees could be laid off. Some of the tax increases include a 75-cent addition to the cigarette tax, a 75-cent fee every month for anyone who owns a cell phone, land line, or other device that can call 911 service and higher income taxes. The state sales tax, however, will not increase.^[4]

[edit] Impact of budget woes

See State budget issues, 2009-2010

• Under the Governor's budget plan the University of Wisconsin-Milwaukee would take a $19.8 million budget cut over the next two years. The University would account for 11 percent of the total $174 million budget reduction to the state university system. The biggest cut - $63.4 million - comes from the state's public flagship university, UW-Madison. UW-Parkside's cut totals $3.4 million over two years, and UW-Whitewater would slash $7.5 million. ^[5]
• On February 19,2009 Gov. Doyle approved imposing a 5 percent sales tax on a number of digital goods - including music, ringtone and video game downloads - as part of a bill aimed at narrowing the state budget deficit. The new tax will go into effect Oct. 1. The tax is expected to raise about $10.9 million for the state between 2009 and 2011. ^[6]
• Wisconsin’s unemployment rate for January 2009 jumped to 7.6 percent, up from 5.8 percent in December 2008 and 2.7 percentage points higher than the January 2008 rate of 4.9 percent, according to the Wisconsin Department of Workforce Development. ^[7]
• In the FY 2010 budget Gov. Doyle proposed a 75 cent per pack tax increase on cigarettes. The tax is expected to generate about $290 million of revenue over the next two years.^[8]
• According to the Governor's FY 2010 spending plan it would increase gun background check fees from $8 to $30. Right now, the FBI runs background checks on long rifle buyers in Wisconsin. The state Justice Department handles handgun checks through a hot line for dealers. The fee has not been changed since 1991. ^[9]

[edit] Budget background

Wisconsin operates on a biennium, covering two fiscal years at a time. A fiscal year begins on July 1 and ends on June 30 of the following year, however the biennium begins July 1 of odd-numbered years. Agency budget requests are submitted in September of even-numbered years. During the following months, the Governor meets with the departments and agencies to hear their budget proposals for the following fiscal year. Following the hearings the Governor issues a budget recommendation for the upcoming fiscal year to the Legislature. Both the State Assembly and the Senate are required to make any necessary changes or adjustments to the budget until the bill is passed in both houses. Although it is roughly estimated that the budget process end by July 1, the beginning of the next fiscal year, the Legislature has generally not completed work on the budget by June 30th of the odd numbered year as required by law in recent years. ^[10] When the Lesgislature passes the bill the Governor approve of the bill as a whole, veto the entire bill or execute line-item vetoes. ^[11]

[edit] Budget figures

The following table provides a history of Wisconsin's expenditures and gross domestic product (GDP).

• NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.

[edit] Ideas about why the crisis exists

• The total of delinquent taxes owed state government rose about 27 percent from 2007 to 2008, going from $800 million to $1.03 billion on July 1, 2008, according to Revenue Department figures. Of the $1 billion owed, $204 million involves accounts that are more than 9 years old. ^[13]
• From December 2008 to January 2009, total Wisconsin non-farm jobs decreased by an estimated 87,900 to 2,755,600. Private sector jobs shrank by 72,500. Trade sector jobs fell by 17,600 over the month, while government lost 15,400 jobs and manufacturing jobs decreased by 13,500. ^[7]
• For some areas of Northern Wisconsin the winter months prove to be business only form of revenue, particularly for the tourism sector when a lot of people travel to go hunting. The city of Hayward, for example, collected $130,349 in room tax in 2008, well below 2007’s record of nearly $140,000. ^[14]
• According to the Department of Revenue as of January 2009, income tax revenue fell 10 percent as compared to January 2008. General sales and use was at $379 million compared to 2008 at $387 million, a 2.1 percent drop; corporation and franchise income fell a reported 245 percent from $13 million in 2008 to -$19 million; cigarette taxes increased 67.6 percent from $27 million in 2008 to $46 million. In total January 2009 saw a 9.5 percent decline in tax revenue as compared to a year ago, January 2008. ^[15]

[edit] Proposed actions

[edit] Governor Jim Doyle

For fiscal year 2010 Gov. Doyle proposed a total of $1.7 billion in tax hikes for the next two years. The Governor's tax proposals include a 75 cent per pack increase in the state cigarette tax, a higher income tax on married couples making more than $300,000 a year, a tax on oil companies and a range of complex tax increases on corporations that do business in states besides Wisconsin. These tax proposals would be in addition to the FY 2009 budget repair approved taxes on multi-state corporations that is estimated to produce $215 million in revenue over two years. ^[8] In addition to tax increases the budget recommendation relies on $2 billion in federal stimulus funds. ^[3]
Gov. Jim Doyle said that the various business tax increases in his latest budget proposal will help eliminate any steep cuts in state educational, university, police and health care programs. "I'm not prepared to cut the schools and cut the universities," said Doyle. ^[16]

[edit] Republicans

Wisconsin Republicans said that Gov. Doyle's budget recommendation relies too heavily on the increase of taxes and doesn't do enough to create new jobs or cut spending in government operations. The $63 billion FY 2010 two-year budget being considered by the Legislature would increase spending 7.7 percent over the next two years. Sen. Alberta Darling said that with the current budget proposal there won't be enough money to balance the budget once the federal stimulus funds run out. Rep. Robin Vos said that although there aren't any current tax increases to income or sales tax, "If you live in Wisconsin, under this budget, you will pay higher taxes," he said. ^[3] In addition to tax increases Gov. Doyle added a “prevailing wage” provision would mandate what developers pay in wages. This, said Mark Jefferson, Executive Director of the Republican Party of Wisconsin, would hurt job creators looking to employ. “While employers shut their doors and folks lose their jobs, Governor Doyle should be looking for incentives to create jobs and put Wisconsinites back to work instead of making it more expensive for employers to hire our workers and do business in our state,” said Jefferson. ^[17]

[edit] Democrats

Democrat lawmakers in Wisconsin said that they plan to use use the 2009-2011 budget and federal stimulus money to add and keep jobs. Assembly Majority Leader Tom Nelson said, Wisconsin’s budget crisis is so intertwined with the country’s economic crisis that when the nation’s problem is fixed the state’s will be too. Nelson added, “We know the budget deficit is largely cyclical” and therefore he proposed that the federal stimulus money be used to patch the shortfall in state revenue and improve Wisconsin’s human capital by investing in education and its physical capital by investing in roads, bridges and schools. ^[18] In March Speaker Mike Sheridan and Senator Russ Decker issued a proposition to repeal the scheduled raise for the next session starting in 2011. Sheridan noted that eliminating the pay raise will save the state $314,000 over three years. "In the face of these historic economic and fiscal challenges, we must find ways to cut costs and save Wisconsin taxpayer dollars," said Sheridan. ^[19]

[edit] Economic Stimulus Package

Wisconsin is expected to receive $3.8 billion from the $787 billion dollar economic stimulus. ^[20] All told, the federal stimulus plan would create or save 70,000 jobs in Wisconsin, based on White House estimates. ^[21]
For more information on how the federal stimulus funds are being used in the state of Wisconsin, visit the state recovery website.

According to preliminary reports Wisconsin is expected to receive: ^[20]

• $1.2 billion towards Medicaid
• $107 million for the Clean Water State Revolving Fund
• $529 million for highway funding
• $81 million for transit
• 27 million for homelessness prevention
• $55 million towards the state energy program
• $144 million towards weatherization
• $9 million towards Head Start
• $717 million towards the education stabilization fund
• $180 million towards Title I education for the disadvantaged
• $8 million for education technology

[edit] Budget transparency

Wisconsin currently has no government-sponsored state spending database. As mentioned below, Milwaukee residents have some level of transparency, thanks to the independent transparency site hosted by Citizens for Responsible Government (CRG).

Sign up for Show Me The Spending's weekly transparency e-updates. As transparency news about Wisconsin becomes available, it will be sent out by email and posted on this page.

[edit] Legislation

• Assembly Bill 143 was introduced in March 2009 by Rep. Cory Mason, Rep. Dean Kaufert, Rep. Gordon Hintz, Rep. Jeffrey Wood and Rep. Terese Berceau. The bill was cosponsored by Sen. Alan Lasee. The bill essentially calls elimination of the Legislature's exemption from the state's open meeting laws.
• Assembly Bill 142 was also introduced in March 2009 by a total of 20 representatives, including the main author of the bill Rep. Mark Gottlieb, and cosponsored by Sen. Sheila Harsdorf, Sen. Luther Olsen, Sen. Robert Cowles and Sen. Dale Schultz. The bill, if accepted would prohibit state elected officials from fundraising during state budget deliberations.
  • On July 8, 2009 the organization Common Cause in Wisconsin announced their support for both Assembly Bill 143 and 142 following the adoption of the Wisconsin state budget. The best time to reform the state budget, said the organization, is immediately following the end of the budget process. And the best way to start reforming the process is with the two Assembly Bills, they said. "The closed-door, secretive budget process is a problem that stems from the fact that the legislative partisan caucuses in which most of the important budget decisions are debated and decided are exempt from the Wisconsin Open Meetings Law, enacted in 1976," the group stated in a press release.^[22]
• In March 2009, keeping with Sunshine Week, Wisconsin Representative Louis Molepske, Jr. re-introduced the Open Government Act, which would allow the public more access to drafts of legislative bills. Molepske has introduced the act several times before, but he feels the time is ripe, and the bill necessary to restore the public's trust in elected officials.^[23]
  • See main article: Wisconsin Rep. Molepske re-introduces Open Government Act

[edit] Government tools

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

[edit] Economic Stimulus Transparency

• The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.^[24]

• Wisconsin will receive an estimated $2,495,140,902.^[25]

• The economic recovery website to show how legislators and government officials in Wisconsin are spending Federal funds is available here.

[edit] Support for creation of the database

State Representative Bill Kramer announced his intention to re-introduce a comprehensive transparency bill to the Wisconsin State Legislature.

[edit] Independent transparency sites

The Citizens for Responsible Government (CRG) group sponsors the Government Accountability in Spending Project, a movement to place all of Wisconsin’s government spending online in a searchable database format. Currently, the group is focusing on the Milwaukee area, and has a database of agency expenditures and vendors. Most recently, thanks to CRG efforts, information from the Milwaukee Public Schools is available. As of September 15, 2008, the Milwaukee Area Technical College District financial data has been placed online.^[26]

[edit] Public employee salary information

The City of Appleton posts public employee salary information here.

[edit] See Also

Wisconsin taxpayer-funded lobbying

[edit] External links

[edit] Additional reading

• State of Wisconsin,"Governor Doyle’s State of the State Address," January 29,2009

[edit] References

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