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Feb. 18, 2009

On Tuesday, Feb. 17, Gov. Doyle announced his 2009-11 state budget and outlined his plan for dealing with a projected $5.7 billion deficit. Key elements in the plan include a combination of $597 million in state agency spending reductions, utilization of $2.1 billion in federal stimulus dollars, and $2.2 billion in new tax revenue, which includes the tax provisions contained in the budget adjustment bill. That bill (SB-62) was approved on a party line vote in Joint Finance on Tuesday (12-4).

Agency cuts, not including a reduction in state agency requests, amount to a reduction in $597 million in GPR spending. In addition, the budget proposes to lapse $334 million to the general fund from other fund sources, and permanently shifts $106 million in GPR spending to other fund sources.

The budget relies heavily on $2.1 billion in additional federal resources through the federal stimulus package. In general,  the Governor proposes to maintain GPR spending at 2007-08 levels, minimize future spending commitments, use federal stimulus dollars to fill the two-year budget gap, and rely on a return to average revenue growth in 2011-13 to account for the loss of one-time federal funds in future budgets.

• Budget Bill: AB-75 [1,743 pp]

• Budget in Brief [94 pp]

Wisconsin Developments

Budget/Budget Repair Highlights

Taxes

• Increases corporate taxes through combined reporting ($215 million)

• Increases cigarette tax by 75 cents per pack and tax on moist snuff by 56 cents ($344 million)

• Establishes a three percent gross receipts tax on oil companies ($272 million)

• Increases top income tax rates 15 percent from 6.75 percent to 7.75 percent for single individual filers earning over $225,000 (joint filers, $300,000; married individual filers,$150,000) ($312 million)

• Reduces capital gains exclusion from 60 percent to 40 percent ($181 million)

• Streamlined sales tax ($82 million)

• Hospital tax ($650 million)

Economy

• Increases tax credits for angel and venture capital investments

• Expands prevailing wage law

• Provides funding for Buy Local, Buy Wisconsin

Insurance/Health

• Protects BadgerCare Plus from across the board budget cuts

• Slows implementation of the authorized FamilyCare program; statewide implementation now scheduled over next 3-4 years instead of the next biennium

• Utilizes $1.2 billion in increased federal assistance for Medicaid

• Implements a statewide smoking ban

• Requires insurers to cover dependents through age 26; includes new insurance regulations in the small group and individual markets

• $44 million for out-of-home care in Bureau of Milwaukee Child Welfare

• Increases funding for foster care services

Education

• School funding formula for the voucher program

• Repeals Qualified Economic Offer requirement

• Increases school funding by $426 million over two years, which includes federal stimulus dollars

• Includes $26 million for financial aid and $25 million for funding the Wisconsin Covenant program

Transportation

• Increases transportation funding by over $600 million through federal stimulus and oil company tax, including a $569 million increase in highway funding between now and the end of FY 11

• $120 million to leverage passenger rail system development

• Provides $100 million in general obligation bonding authority to help foster transit development in southeastern Wisconsin

• Authorizes RTA for southeastern Wisconsin, Madison, and the Fox Valley

• Authorizes seat-belt checks by law enforcement

Natural Resources

• Raises the environmental repair fee and repeals the sunset of the vehicle environmental impact fee

• Provides an additional $20 million to reduce nonpoint source water pollution

• Increases air permit fees on state regulated sources

Other

• Extends dependent and survivor protections to domestic partners

• Consolidates agency attorneys and support staff in DOA

• Increases the mandatory limits for car insurance

News

Doyle: Budget to cut services, raise taxes, releases some inmates: Milwaukee Journal Sentinel, Feb. 18, 2009. Raises income taxes on capital gains and couples with taxable incomes of $300,000 or more.

UW-L to lose $4.8 million under Doyle’s budget plan: La Crosse Tribune, Feb. 18, 2009. 1 percent across-the-board budget reduction was imposed on all state agencies.

Doyle’s budget proposal supports transportation: The Daily Reporter, Feb. 18, 2009. With Tuesday’s passage of the American Recovery and Reinvestment Plan, Doyle touted the ability to increase investment in the state’s transportation fund by 20 percent.

Budget 'shares sacrifice' by taxing wealthy, holding school spending steady: Wisconsin State Journal, Feb. 17, 2009. Gov. Jim Doyle's budget raises taxes on the wealthiest Wisconsinites while relying largely on federal money to keep school spending at current levels.

Cigarette taxes to go up under Doyle budget: Racine Journal Times, Feb. 17, 2009. Wisconsin’s cigarette taxes would be the third highest in the country, smoking would be banned in workplaces statewide and big oil company profits would be taxed, under the budget Gov. Jim Doyle presented on Tuesday.

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