Capitol Connection

By State Senator Joe Leibham

April 2 , 2008

Budget Fix Should Not Include Tax Increases or Fund Raids

As you may know, Governor Jim Doyle recently called the legislature into Special Session to take action on a proposal to repair the 2007-09 state budget. That’s right – after just eight months, the state’s two-year budget is already predicted to be $652 million short of the revenue needed to be balanced. When I voted against the budget last year, I did so in part because I could clearly see that it was fiscally irresponsible and built on inflated and unattainable tax revenue goals. Little did I know that my concerns would come true so quickly.

Now that we officially know the original budget is seriously flawed, the Governor is required by state law to propose a budget repair plan. Governor Doyle introduced his proposal a few weeks ago and, late last month, I was required to cast a vote on the plan as amended by the Senate Democrats who are the Majority Party at this time. After reviewing the plan, I quickly determined that I would confidently be voting “NO.”

Following is a listing of the major provisions included in the Governor/Senate Democrats’ budget repair plan that led to my strong opposition. I have also included some thoughts on each in italicized print.

• Create a new hospital health care tax – Private pay insurance patients would pay a new tax on the care that they receive from hospitals in Wisconsin. This new tax would cost Wisconsinites over $416 million in higher health care costs. Over $122 million of the new tax revenue would be used for expenditures not related to health care.

Most citizens, especially middle class families, are already struggling to make ends meet and pay their health care costs.

• Implement a new tax on businesses that have their corporate headquarters in Wisconsin. This new tax would cost businesses headquartered in our state over $130 million.

Why, when our economy is softening and job layoffs are increasing, would we even consider a new tax on the job creators of our state?

• Raid $250 million from the state, fuel tax funded Transportation Budget.

If our Transportation Budget has excess funding then we should reduce our high fuel tax. In addition, raids like this will further delay important projects, like Highway 23.

• Raid $21 million in revenue generated from the $10 increase in what we all pay to renew our Driver’s License. This increase was approved in the original budget and we were told that it was needed to fund a new Identification Card program.

If the $10 increase isn’t needed for its intended purpose then it should be repealed.

• Raid $11 million from the Universal Service Fund. We all pay this tax on our monthly phone bill and it is supposed to be used to help low-income people afford phone service.

If this tax isn’t needed for its original purpose then it should be eliminated.

A budget repair plan should not include tax increases or fund raids. This is exactly the wrong approach to take. Our budget problems are not due to the fact that we tax too little; we are in trouble because we are spending too much! We must be responsible by reducing and re-prioritizing our spending. Just like a family must do, government must do. Live within our means!

As the budget repair negotiations continue I will work to convince my colleagues and the Governor that we must truly “fix it;” not make things worse by increasing taxes and raiding funds!

As always, it has been a pleasure communicating with you. Please remember to communicate with me and share your input by calling 888-295-8750, writing to me at P.O. Box 7882, Madison, WI 53707-7882, or by e-mailing me at Sen.Leibham@legis.state.wi.us. You can also log on to the 9th Senate District on-line office at www.leibhamsenate.com.

It is an honor representing the residents of the 9th District in the State Senate!