Have you heard about Wisconsin’s revenue shortfall?

The Legislative Fiscal Bureau announced the shortfall is an incredible $652.3 million. It’s a huge problem that needs to be addressed and with a proper solution.

Have you seen the cost of gasoline? At $3.20/gallon and climbing, the price is the highest ever in Wisconsin.

Have you traveled on the Interstate lately? A myriad of potholes and huge divots, the Interstate and many Wisconsin roads are in deplorable condition.

Have you renewed your license or registration lately? Did you notice the $10 increase in license renewal, and the $20 increase in registration renewal?

Connect the dots: the large revenue shortfall, the high cost of gasoline, roads that look like minefields, and increased fees. Keep those issues in mind as you consider Governor Doyle’s proposal to repair the state budget.

Part of the governor’s plan to fix the budget shortfall is to raid the state’s Transportation Fund of $243 million and transfer it to the General Fund. The Transportation Fund is financed through the state gas tax, one of the highest in the nation, and driver license fees and registration fees. The revenue is used for road projects.

That means less money will be available for work on Wisconsin roads at a time they are in desperate need of attention.

Once again, Governor Doyle has dug into the pockets of taxpayers and his bag of tricks and pulled out an oldie, but not a goodie: raiding the Transportation Fund to plug a spending hole.

During February 2005, Governor Doyle presented his 2005-07 state budget to the Legislature including a $180 million transfer from the state's Patient Compensation Fund and another $250 million from the transportation fund.

After the 2005-07 state budget was approved by the Legislature, Governor Doyle partially vetoed 752 words out of a large section of the budget to create a 20-word sentence. The result was a raid of $427-million from the Transportation Fund, an appropriation the Legislature did not authorize.

The 2007-09 state budget transfers $200 million from the state's Patient Compensation Fund to the general fund. The Wisconsin Medical Society is now suing the state because of the raid that could be illegal.

When citizens pay a tax or fee designated for a specific purpose, like the gas tax for roads, they expect the funds will be used in that manner. The use of funds for other programs or services other than those the funding was intended for is a serious breach of faith and trust with the public. These raids are wrong and must stop.

This legislative session, a constitutional amendment, Assembly Joint Resolution 34 (AJR 34) to prevent budget raids was approved by the state Assembly, 91-6. AJR 34 would prohibit state lawmakers from raiding segregated funds to fill budget holes and prevent funds from being used outside their original intent.

This is the first consideration of AJR 34. The amendment must still pass the state Senate in this legislative session, then be approved by both houses of the Legislature in the next legislative session before going to voters in a statewide referendum. It is highly unlikely the state Senate will schedule AJR 34 for a vote before the current session ends Thursday.

Wisconsin got into its current budget mess because the state taxes, spends, and borrows too much. Governor Doyle’s plan to fix the state budget is to increase the hospital tax and raid the Transportation Fund. Raising taxes and raiding funds are the wrong solutions. Think about that the next time you fill up your tank or hit a pothole.

$763,272,000 to be exact.

That is the increase in taxes and fees in the 2007-09 state budget, according to a report issued by the non-partisan Legislative Fiscal Bureau.

This is why I voted against the state budget.

Once again, gimmicks and tricks were used to balance the state budget that I voted against.

The Wisconsin Taxpayers Alliance (WTA) reports, “Increased tobacco taxes, higher vehicle fees, and expanded health care for the poor are a few ways the 2007-09 state budget differs from its predecessors. But when it comes to “balancing the books,” new and old budgets have a lot in common: fund transfers, one-time or unsure revenues, accounting shifts, GAAP and structural deficits, borrowing, and slim balances.”

The state budget contains increased spending, tax increases and a huge structural deficit of $892-million the Legislature will have to grapple with in two years.

Here is the entire WTA report.

Here’s another reason I’m glad I voted against the state budget.

The budget was signed into law by Governor Doyle with the hope that the state will win a court battle against the Ho-Chunk Nation. A loss by the state in the court case creates a $72 million hole in the state budget.

Wisconsin is already reeling from the $892-million structural deficit that results from the new budget.

The La Crosse Tribune is reporting, “The budget assumes that a court will order the Ho-Chunk to make payments to the state that the tribe says it does not owe. The state Department of Administration estimates the tribe will owe about $72 million in fees under its gambling compact by June 30, 2009. But a lawsuit over the money is pending in federal court and there are no guarantees that the state will win.”

Read the entire article.

Balancing the state budget on a wish and a prayer is irresponsible. If this gamble doesn’t work, the taxpayers are on the hook for another $72-million. This type of budgeting is foolish and unacceptable.

The Wheeler Report has compiled a list of Governor Doyle’s budget vetoes:

BUDGET VETOES LISTED


EDUCATION AND WORKFORCE DEVELOPMENT

Higher Educational Aids Board and Dept of Administration
The Wisconsin Covenant Scholars Program

• Partial veto to remove references to eligibility criteria related to financial need.
• Partial veto to allow DOA to pay costs of operating the Office of the Wisconsin Covenant.

University of Wisconsin Hospital and Clinics Authority

• Partial veto removes  non-fiscal policy items related to modifying board membership, eliminating limit on bonding and other changes.

University of Wisconsin System

• Veto removes independent purchase of telecommunications services.
• Veto removes requirement for information on instructors at registration.

Wisconsin Technical College System

• Veto removes levy limits on technical college districts.
• Veto removes limits on workforce advancement training grants to small businesses and statutory grant ceiling.

ENVIRONMENTAL AND COMMERCIAL RESOURCES

Commerce

• Partial vetoes affecting loans for pulp and paper mill.
• Veto eliminates phaseout of PECFA program.

Natural Resources

• Partial veto affecting CWD and Wildlife Damage Funding and language inhibiting the department’s pursuit of alternative solutions to the deficit facing the wildlife damage fund.
• Partial veto relating to JFC stewardship review because the review of land acquisitions should become effective with the reauthorized program on July 1, 2010.
• Veto affects the musky fishing season and catch and release bass fishing.

State Fair Park Board

• Veto removes quarterly reports requirement.

GENERAL GOVERNMENT AND JUSTICE

Administration and UW System

• Veto affects several sections related to information technology requirements.

Circuit Courts

• Technical veto related to Kenosha County Circuit Court Branch 8.

Corrections

• Vetoes affect juvenile correctional services deficit and limits on department flexibility to effectively manage juvenile corrections programs over time.

HEALTH AND FAMILY SERVICES AND INSURANCE

Health and Family Services

• Veto removes requirement DHFS request a federal waiver in order to offer health opportunity accounts to BadgerCare recipients and to provide the JFC an implementation plan.
• Veto affects requirement DHFS develop and implement disease management programs for conditions identified by health risk assessments for recipients and requires the programs be similar to programs developed and use by the Marshfield Clinic under the Physician Group Practice Demonstration.
• Veto affects requirement DHFS provide supplemental reimbursement to pharmacies participating in the Medicaid, BadgerCare and SeniorCare programs to compensate for any reduction in drug product costs reimbursements under the federal deficit reduction ac.
• Veto deletes report on FoodShare employment and training program participation.
• Veto deletes sunset of program for reducing fetal and infant mortality and morbidity.
• Veto deletes decrease in expenditure authority related to the Council on Developmental Disabilities because the provisions duplicate changes accomplished elsewhere in the budget.

STATE GOVERNMENT OPERATIONS

Employment Relations Commission

• Veto restores original intent of allowing both firefighters and law enforcement officers the opportunity to use collectively bargained alternative disciplinary appeal procedures instead of circuit court.

TAX, LOCAL GOVERNMENT AND TRANSPORTATION

Revenue

• Veto removes three-tier liquor distribution system because “I object to inclusion of policy of this nature in a budget bill.”
• Partial veto affects inventory tax for moist snuff to make inventory tax consistent for cigarettes and moist snuff.

Shared Revenue and Property Tax Relief

• Partial veto of levy limit language affects “restrictiveness” of the limit for 2007, “which would negatively effect the provision of police and fire services.” The veto will allow local governments to increase their levies for 2007 by either the percentage increase due to net new construction or 3.86 percent.

Transportation

• Vetoes affect reports and approvals.
• Vetoes and write-downs affect state bicycle and pedestrian facilities program appropriations.
• Veto removes value engineering for highway improvement projects.
• Veto removes requirements for DMV service center operations.
• Veto removes authority of municipalities to issue permits for activities along state trunk highways within municipal limits when DOT has denied the project.
• Veto removes vehicle immobilization and impoundment for repeated parking violations language.
• Partial veto of construction schedule for STH 23 major highway development project because the proposed schedule is “unattainable and may negatively affect other highway projects.”
• Veto removes requirements for JFC supplemental funding for the Kenosha-Racine-Milwaukee Commuter Rail extension project “because it infringes on the department’s ability to continue preliminary work on the project to determine its scope and final feasibility.

Governor Doyle signed the state budget this morning at the UW-Madison.

The Governor used his veto authority to eliminate the levy limit placed on technical colleges. The budget approved by the Legislature this week had imposed a cap on growth for technical colleges at four percent.

The Governor also used his veto pen to relax the limit placed on local governments by allowing municipalities to increase their levies by 3.86 percent or the rate of new construction for 2007.

The Governor’s actions almost certainly signal increases in local property taxes, especially for technical colleges that have seen the largest increases of any portion of local property tax bills in recent years.

Consider the total tax levies for the state's16 technical colleges. According to the non-partisan Wisconsin Taxpayers Alliance, the technical college tax levies have increased from $251 million in 1992-'93 to $622 million in 2005-'06. That’s an increase of almost 150 percent compared to a 75 percent increase in overall levies during the same time period.

Governor Doyle exempted technical colleges from levy limits in the 2005-07 state budget. Unelected technical college boards were then free to raise tax levies, and taxpayers were powerless. Without levy limits, technical college boards will once again be able to approve high tax increases without recourse thanks to the Governor and his veto pen.

Here is the Governor’s veto message.

Even with Legislative approval of a new state budget Tuesday (I voted against the budget in the Senate) the budget process isn’t over.

Bob Lang and Sandy Swain of the Legislative Fiscal Bureau prepared an informational paper on the state budget process in January 2007. They write:

“Regardless of the approach used to resolve any differences, once the differences between the houses are resolved, a final budget bill, as passed by the Legislature, is prepared for the Governor's consideration. The bill at this stage--termed an "enrolled bill"--is not sent to the Governor until it is called for by the Governor. Typically, several weeks may ensue before the bill is requested. This allows the Governor and the Governor's staff time to review the items in the final legislative budget bill and to consider--in consultation with the State Budget Office, agency heads, legislators, and others--possible partial vetoes of the bill.

Article V, Section 10, of the Wisconsin Constitution provides the Governor with the power of partial veto for any appropriation bill,including the biennial budget bill. In contrast to a nonappropriation bill," this means that rather than having to approve accept or reject a bill in its entirety, the Governor may selectively "delete" portions of the budget bill. Thus, both language and dollar amounts in a budget bill may be vetoed by the Governor.

Typically, a Governor will partially veto a number of provisions in the legislatively-enacted budget bill, although the vast majority of the bill will become law in the form as passed by the Legislature. The budget bill (less any items deleted by the Governor's partial veto) then becomes the state fiscal policy document for the next two years.”

Governor Doyle has one of the most sweeping veto pens of any governor in the country. In November 2006, the Legislative Council in a memo on the state budget process wrote:

“Under the Wisconsin Constitution, the Governor has an extensive partial veto power, with the authority to partially veto any item in an appropriation bill, including the biennial budget bill. Thus, instead of having to accept or reject a bill in its entirety (as is the case with nonappropriation bills), the Governor may, in accordance with the following summary, selectively delete provisions of the budget bill, vetoing either language or dollar amounts, or both, in any given provision.

 • The Governor may exercise the partial veto only on bills that include an appro-priation (but may veto nonappropriation parts of appropriation bills).

 • The part of the bill remaining after a partial veto must constitute a complete, entire, and workable law.

 • The provision resulting from a partial veto must relate to the same subject matter as the vetoed provision.

 • Entire words and individual digits may be stricken; however, individual letters in words may not be stricken.

 • Appropriation amounts may be stricken and a new, lower amount may be written in to replace the stricken amount.”

The Legislative Fiscal Bureau notes that, “Just as with a Governor's veto of a bill in its entirety, the Legislature has a chance to review a Governor's partial vetoes and may, with a two-thirds vote by each house, enact any vetoed portion into law, notwithstanding the objections of the Governor.”

In the 2005-07 state budget, Governor Doyle exercised his authority to make 139 partial vetoes to the bill, as passed by the Legislature. None were overturned by the Legislature.

One of the most egregious vetoes occurred when the Governor slashed hundreds of words out of several sections of the budget to create one sentence that transferred over $400 million out of the transportation fund to go to schools.

I am one of 49 lawmakers that signed on to a letter this summer asking Governor Doyle “to play a helpful role by publicly agreeing to enact the state budget” without using the Frankenstein veto.

We asked Governor Doyle to follow the parameters set forth in Assembly Joint Resolution 1 (AJR 1) that has bipartisan support. The resolution would prohibit any Governor, regardless of party affiliation, of using partial veto authority to create new sentences by combining parts of two or more sentences.

AJR 1 is awaiting state Senate action and approval from voters in a statewide referendum.

Our letter told the Governor that a public statement on his part to refrain from using the Frankenstein veto would respect both legislative and public sentiment.

My fear is that because the state Senate, led by Democrats, has stalled in taking action on the Frankenstein veto, that Governor Doyle will once again abuse his expansive veto power to make a bad budget even worse.

Tonight the state Senate approved the state budget, 18-15. All Senate Republicans voted against and all Senate Democrats voted for the budget. The Senate approved the budget at about 7:40 pm. Here is the state Senate roll call.

The state Assembly approved the budget shortly before 7:00 tonight. The vote was 60-39. Here is the state Assembly roll call.

The budget process isn’t over. Governor Doyle now gets to review the budget and apply his powerful veto pen. Remember, the Governor vetoed into the last state budget a huge amount of spending that was never approved by the Legislature.

Stay tuned to my blog for further state budget updates.

In order to lower taxes in Wisconsin, one of the highest-taxed states in the nation, there must be reduced spending.

The budget compromise announced Friday night has, according to one of Governor Doyle’s aides who was quoted in the Milwaukee Journal/Sentinel, an increase in spending of eight percent. The Legislative Fiscal Bureau reports the amount of spending in the compromise increases by 6.6 percent. The current rate of inflation is 2.76 percent. Wisconsin will never get a grip on its huge tax problem if it continues to approve budgets with runaway spending.

Wisconsin residents cannot afford this budget compromise. Wisconsin employers project average pay raises of 3.31% in 2008, down from actual increases of 3.39% this year and 3.4% in 2006, according to a survey of 300 companies by MRA-The Management Association Inc. based in Pewaukee.

Governor Doyle’s office has informed the Wisconsin State Journal the compromise leaves the state with an astounding structural deficit of $889-million. When residents in Wisconsin have some of the lowest per-capita income in America and can least afford more spending, it is irresponsible to approve a budget that once again relies on the VISA card.

This budget deal expands an already bloated state government by including items like the cigarette tax increase, Governor Doyle’s Wisconsin Covenant, and an expansion of BadgerCare. It also includes a raid of the Patient’s Compensation Fund.

We are told we are to be happy that after several months of delay, there has been a breakthrough in the budget stalemate. I am sorry but I find little reason, if any, to celebrate.

The idea should never have been to produce a budget just to have a budget. The appropriate end game should have been to secure a budget that is sound and strong and that puts the taxpayer first. Unfortunately, the taxpayer loses in this budget.

The Governor, Democrats, and editorial boards have perpetrated a great hoax on the citizens of Wisconsin. For months, they riled up Wisconsinites by proclaiming Wisconsin didn’t have a budget. This simply was untrue. Wisconsin was working off the 2005-2007 budget. The state continued to operate with an increase in revenue due to the growing economy. The increased revenues are funding state programs and services. There was not a budget crisis and there was not a rush to produce a budget, especially one that increases spending by eight percent.

Finally, this budget episode is a dramatic illustration that elections matter. In November of 2006, voters re-elected Governor Doyle and turned control of the state Senate over to Democrats. Many times in the past Governor Doyle has stated he would not raise taxes. His budget proposals speak otherwise.

Governor Doyle proposed a budget earlier this year that included $1.75- billion in tax and fee increases. Senate Democrats went even higher, proposing a budget that in one proposal alone, government health care, raised taxes by over $15-billion to start, the largest tax increase in the history of the United States.

The 2007-09 state budget needed to address the needs of taxpayers, first and foremost. The budget compromise fails miserably. For that reason, I cannot and will not be supporting the budget compromise.

Now that Governor Doyle has failed twice to get a budget through the state Legislature, he is resorting to scare tactics by threatening a partial shutdown of state government.

To hear the Governor speak, state employees would face layoffs, university campuses would close, and contracts with county jails would be cancelled.

The press keeps reporting that Wisconsin is the only state without a budget.

The fact is, Wisconsin has a budget. Wisconsin continues to operate under the 2005-2007 state budget. State employees are working. State programs and services are being administered.

The current state budget impasse is an embarrassment for Governor Doyle. Keep in mind, he proposed a budget at the beginning of the year. It is Governor Doyle’s budget and his job to work with and engineer it through the Legislature. Governor Doyle has proposed two irresponsible budgets that contain unacceptable levels of taxing and spending. Forty-nine other governors have managed to secure budgets. Governor Doyle has failed because he insists on incredible increases in taxes and fees that Wisconsin taxpayers cannot afford.

The Governor is now pressing the panic button, telling taxpayers that a government shutdown is possible because the state is running out of money. My question to Governor Doyle is: how did we get to this crisis?

Wisconsin is operating under a budget. It is now October, and Wisconsin is four months into a 24-month biennial budget. If we are to believe Governor Doyle that only four months into the biennial budget that Wisconsin is in danger of running out of money, where is all the money going, Governor? How and where are you spending it all?

Governor Doyle is desperately and frantically attempting to scare Wisconsin taxpayers to pressure the Legislature into supporting his bloated tax and spend budget. Don’t buy into this deplorable tactic.

Wisconsin Eye has video of the entire state Senate floor session from Monday, October 15, 2007 on its website.

You can watch the session here.

Go to 10.15.07 | State Senate Special Session Part 2.

Click on WATCH.

The segment that includes my floor speech begins at 2:17: 35 and ends at 2:30: 52

Today, I voted against Governor Doyle’s second budget proposal because of the high level of taxing and spending. My constituents overwhelmingly have told me it would be better to have no budget than a budget that has such huge increases.

In all my years in the Legislature, I have never seen the drastic differences in the amount of the budgets proposed by the Governor and Senate Democrats and the Assembly Republicans. The tax increases supported by Democrats are not only the largest increases in the history of Wisconsin, they are the largest increases in the history of America. Those increases are the defining difference between the budget philosophies of the two parties.

My constituents have many reasons that they oppose the Democrats’ budgets. Topping their list is the large increase in taxes.

The elderly approaching retirement age tell me they have had enough and are at the breaking point. Though they love Wisconsin, the tax burden has them reluctantly considering moving to another state.

Younger families with children in school do not have the out the elderly can utilize. It is more difficult for families to uproot themselves, so they stay and struggle to find a way to pay the bills that never seem to stop growing.

Our goal is to grow our economy and have successful schools, but the task becomes more difficult with a budget that proposes the largest tax increase in the history of the United States.

Other states have passed budgets months ago because they had better than expected revenues, in large part, because they held the line on spending. As a result, they are considering tax cuts or spending for programs like education and transportation. Don’t we wish this were the debate we were having today?

Senate Republicans offered an amendment today to take up the Assembly bill that funded K-12 education at the level the Governor proposed in his budget. The bill also funded local municipalities. I supported the amendment so that schools and local governments could address their budgets and not force huge property tax increases.

I urged Senate Democrats to behave with common decency and approve the education and local government budget.

Today’s action by the Senate Democrats is a clear indication they continue pursuit of massive tax increases and will not listen to overtaxed taxpayers. Wisconsin families cannot afford that kind of budget.

The state Senate will take up Governor Doyle’s second budget proposal at 1:00 this afternoon.

You can watch the state Senate floor session on Wisconsin Eye.

You may listen to the discussion on the Senate floor about the ramifications of the budget on state taxpayers.

The Wisconsin Department of Administration (DOA) has issued a report comparing estimated school aid numbers under the Governor’s budget and current law.

The Republican-controlled Assembly approved Assembly Bill 506 (AB 506) to fund local school districts while state budget negotiations continue. AB 506 funds school districts at the same level as the Governor’s budget. The Democrat-controlled Senate refuses to schedule Senate floor action on AB 506 to appropriate state school aid.

State Superintendent Elizabeth Burmaster is using current law to prepare aid estimates for schools. The DOA’s report calculates the amount of aid that school districts may lose as a result of the Senate Democrats’ refusal to take action on AB 506.

The difference between the Governor’s budget and AB 506 funding of schools and current law is staggering:

Total statewide general aid under the Governor’s budget (AB 506 funding is identical) for 2007-08: $4, 713, 118, 878.

Total statewide 2007-08 general aid under current law, without an approved 2007-09 state budget: $4,626, 381,114.

There is a difference of $86, 737, 764 that school districts statewide will lose because Senate Democrats will not schedule a floor session to approve AB 506 to fund schools.

Remember this the next time Democrats claim Republicans do not care about public education.

On April 22, 2007, I blogged, “The Green Bay Packers are scheduled to play in Detroit on Thanksgiving Day this year. The game will be over, and the state of Wisconsin may still be without a budget.”

My prediction of a budget turkey is getting closer and closer to becoming reality.

Senate Republican Leader Scott Fitzgerald and Assembly Speaker Mike Huebsch are both saying the budget will not be completed before October 15, 2007, the next deadline in the process of state certification of school aid numbers to local school districts. The major obstacle in the budget negotiations is the level of taxation and spending.

If we have learned anything from the budget impasse, there is a distinct and glaring difference between the two parties fiscal responsibility. Democrats wish to impose the highest taxes in the nation on Wisconsinites. Republicans want to pass a budget without tax increases because Wisconsin already pays some of the highest taxes in the country.

I concur with Senator Fitzgerald in once again calling on Senate Majority Leader Judy Robson to call the state Senate into session to move on the separate bills passed by the Assembly to fund local school districts and local units of government and set property tax levy limits. Senate adoption of the Assembly legislation is the prudent and responsible action to take. I am ready and anxious to go to the Senate floor and support Assembly Republicans’ successful approval of legislation to address the most critical portions of the state budget.

Assembly Republicans demonstrated great leadership in approving bills that would allow local schools, counties, cities, towns, and villages to proceed with their budgeting. Senate Democrats apparently refuse to come to the Senate floor, and are standing in the way of budget progress. A budget turkey is not out of the question.

Governor Doyle has proposed an assessment on oil companies, essentially an increase in the gas tax. The non-partisan Wisconsin Policy Research Institute (WPRI) reports that the Governor’s tax will amount to a five-cent increase in our state’s gas tax, already one of the highest gas taxes in the country, and it will be paid directly by consumers.

The WPRI correctly comes to the conclusion that oil companies will do less business in Wisconsin and do more business in states that don’t have the tax Wisconsin would have. The result could be a damaging reduction in oil supplies to Wisconsin leading to fuel shortages, not to mention higher prices.

Wisconsin Manufacturers & Commerce (WMC) has begun a television ad campaign to stop the gross receipts tax on the sale of petroleum products in Wisconsin. The ads urge viewers to call their Senators to oppose the tax hike, and commend Assembly Republicans for opposing the gas tax hike. The new gas tax passed the Senate (I voted against the gas tax increase) but was rejected in the Assembly earlier this year. Assembly GOP and Senate Democrat leaders continue to negotiate on the budget, and Democrats are insisting the gas tax increase be included in the budget.

Here is a link to the WMC news release that has a link to their TV ad.

The people of Wisconsin have spoken. They do not support Governor Doyle’s proposed tax on oil companies. An overwhelming majority of Wisconsin residents polled believe the tax will only be passed onto consumers in the form of higher gas prices.

The Madison-based Wood Communications Group conducted a statewide survey and found an astonishing 82 percent said the Governor’s tax on oil companies would result in an increase in prices at the pump.

The percentage is even higher for men ages 35-54 where 92 percent say consumers will suffer. Eighty-two percent of women ages 35-54 agree that consumers will end up paying higher gas prices.

It is clear that Wisconsinites do not like this idea and it should be eliminated from the state budget.

 

The non-partisan Wisconsin Taxpayers Alliance (WISTAX) has a report that attempts to explain the long delay in Wisconsin’s budget process. WISTAX says there are two obvious reasons for the stalemate:

“Two of these factors were prominent in three prior budget delays—one in 1971 and two in the 1990s. First, major disagreement over creation of a university system held up the first of the three budgets. Second, in all three cases, partisan control of the legislature was split, making compromise between the two houses difficult. Wisconsin is currently one of only 12 states with divided control.

This year, both issue differences and party politics are in play. The combination makes the 2007 budget unusually difficult to pass. Waged to an unusual degree on national rather than state issues, the 2006 election led state Republicans to lose three seats and control in the upper house and eight seats in the lower house. With U.S. politics largely unchanged from two years ago, Democrats sense an opportunity to expand their senate majority and to capture the assembly. Republicans, on the other hand, fear being shut out of state government leadership for the first time in a generation.

If one number best summarizes the current deadlock, then, it is 2-0-0-8. The political stakes are unusually high, and both major parties are aggressively positioning themselves for the next election. For Democrats, health care is both the banner under which they hope to run and the weapon they plan to use against their GOP opponents. For Republicans, tax hikes, mainly to fund expanded health care, are the issue they hope to use against Democrats. In a top-10 taxed state, they say Wisconsin taxpayers cannot bear proposed tax hikes. Whether the budget contains the tax/fee increases recommended by the governor ($1.75 billion, b) or by senate Democrats ($9.5b), the GOP views them as excessive.”

WISTAX also says the public and the pres are partially to blame for the budget impasse. You can read the entire WISTAX report here.

Great emphasis in the media is being placed on Wisconsin being the last state in the country without a budget. Little, if any attention has been focused on one of the key reasons why Wisconsin’s budget is late.

Passing a budget has been difficult in Wisconsin because we are swimming in red ink. All other states have beaten Wisconsin to the budget finish line because they have enjoyed higher-than-expected revenues, making the task of crafting and adopting a final budget much easier.

The handwriting was on the wall earlier this year as signs pointed to other states having far greater ability to hammer out budgets than Wisconsin. In Marc h, the National Conference of State Legislatures (NCSL) issued the results of a national survey showing that legislators in 42 states had unexpected funds to work with as they approached the end of their budgets for fiscal year 2007 and worked on their budgets for 2008.

"The current budget situation is giving states an important and much needed window of opportunity to restore and reinvest in state programs," said Texas Senator Leticia Van de Putte, NCSL's president. "More money to work with also means more ability to innovate. Arkansas, for example, will use additional funding to build a new cancer research center. Many states are putting more dollars into higher education. Some states are saving, and still others are providing tax relief."

Other states had many positive budget options because of higher-than expected revenues and stable spending needs. Stable is an adjective rarely used to describe spending in tax-hell Wisconsin.

Legislators in other states had to feel like kids in a candy store. Lawmakers outside of Wisconsin had the enviable job of determining how to use unexpected resources.

The NCSL reported, “At least a dozen states are considering tax cuts. Alabama is looking at reducing sales and income taxes. Florida, Minnesota, Montana, North Dakota and Texas may provide property tax relief. New Mexico passed an earned income tax credit and North Carolina is considering one. Utah reduced business taxes.

Several states, including Arkansas, Vermont and Virginia, will fund one-time projects. Some states are putting additional dollars into their 2007 budgets to resolve overruns or support more programs.

Transportation projects and other capital expenditures are popular targets for extra revenues. Many states will reduce unfunded pension liabilities or will put money into state retiree health care.

At least nine states are stowing portions of their unexpected funds in rainy day or other savings accounts. Other states plan to carry extra revenues into 2008 to hedge against unforeseen circumstances or slowing revenue growth.”

As I blogged this summer, “Over 40 states are ending legislative sessions with more money in the coffers than expected. Governors in 23 of those states have put together tax cuts. Wisconsin is not one of them. As other states fix roads and schools and build up slush funds, all we can do is watch with envy what is going on in states like Utah and Idaho.”

Here’s my June blog comparing Wisconsin’s grim budget to other states.

Contrast these rosy budgets with what ahs happened here. While other states cut back their spending in the early part of this decade, Wisconsin kept spending and spending. The result is property tax relief has been approved in other states while in Wisconsin, Governor Doyle has proposed a budget with $1.75 billion in tax and fee increases. Not to be outdone, Senate Democrats have passed a budget with even more tax increases, featuring a government health care plan with an annual start-up cost of $15.2 billion.

Other states get tax relief. Wisconsin gets the largest tax increase in the history of America.

The current budget battle in Wisconsin is a classic example of how different the fiscal approaches are in each party. Republicans see deficits and out of control taxing and spending and call for restraint. Democrats pull out the Visa card.

The parties are billions of dollars apart. Because other states put on the spending brakes years ago while Wisconsin kept their drunken sailor uniforms on, the others have long finished their budget work, and are enjoying all sorts of benefits, including tax relief.

Wisconsin is late because it was much easier for other states to get the job done, and those other states can thank themselves for having the foresight to spend less and make conservative revenue estimates. Wisconsin did not, and that is why we are still at the budget table.

Legislative leaders meet this week with Governor Doyle at the Governor’s mansion to discuss the state budget impasse.

The Senate Democrats took their $15.2 billion government health care program off the budget table last Friday, and are still insisting on other big tax increases. Governor Doyle also has proposed a budget containing $1.75 billion in new tax and fee increases.

I continue to support the state Assembly’s aggressive move last week to approve legislation to fund schools and local government. The bold measures are a sign of real progress in the budget stalemate.

I urge Assembly Republicans to stick to their guns and refuse to agree to any compromise that would raise taxes. As I stated on Wisconsin Public Radio this week, Wisconsin has some of the highest taxes in the nation and lower than average per capita income. We can ill afford to pay the exorbitant taxes the Governor and Senate democrats are seeking. Higher taxes will continue to drive homeowners and businesses out of the state. Wisconsin certainly does not want to lose another Congressional seat due to a decrease in population.

A budget agreement should be reached, and it must be a document without tax increases. That message needs to be strongly delivered during the rest of the budget process by Assembly Republicans, and we must continue to offer encouragement and support.

The Milwaukee Business Journal has some grim news about local hospitals. The paper writes:

“The closing of a major hospital and changes in insurance contracts prompted big losses for some Milwaukee-area hospitals and lower profits for others in 2006.

The biggest financial loss was at St. Michael Hospital in northern Milwaukee, which closed last year. The hospital lost more than $100 million in fiscal 2006, according to financial filings made by the hospital's parent, Wheaton Franciscan Healthcare, Glendale. Another Wheaton hospital, St. Francis in Milwaukee, lost about $10 million in 2006, compared with $1 million in net income in 2005. “

Remember, budgets proposed by Governor Doyle and Senate Democrats contain a tax on hospitals. The Wisconsin Hospital Association (WHA) prepared an analysis of the Democrats’ hospital tax. The WHA writes:

“As part of its 2007-09 biennial budget, the Doyle Administration proposes a hospital tax equal to 1% of gross revenue, and to use the proceeds together with Federal matching funds to provide funding for Medicaid. Specifically, the plan proposes to tax hospitals a total of $418 million over the 2007-09 biennium, match it with $568 million of Federal funds, and increase hospital payments by $700 million, with a resulting net gain (after the tax) to hospitals of $284 million.

WHA has analyzed the plan, and has concluded that, contrary to a net gain, there would be a net loss of between $132 million and $186 million for hospitals over the biennium. This is because the payments proposed in the plan are either contrary to Federal rules, or based on questionable assumptions.”

With local hospitals closing and suffering big losses, Wisconsin needs to reject the hospital tax proposed by Governor Doyle and Senate Democrats.