May 14, 2008

 

State Budget Fix Not Perfect But Needed

In politics, like in life, you can’t always get everything that you want. The budget repair the Legislature passed this week is not perfect. It represents a compromise between the Senate and the Assembly, currently two very different houses. In March, Governor Doyle posed a challenge to the Legislature; the Senate and Assembly leadership needed to come up with a compromise to fix the budget hole as soon as possible. It didn’t happen as quickly as all of us would have liked, but it is now done and will pass both houses of the Legislature this week.

The slowing National and Wisconsin economy has resulted in less projected revenue for the state; therefore, we are in the situation in which we must either raise taxes, cut state services, or be creative to come up with the funds we need.

There weren’t a lot of good options and the repair includes some things that are less than ideal.  The one week delay in school aid payments is not a perfect situation and will cause local school boards some headaches; however I have heard from schools the delay is better than outright cuts to funding. In addition, the plan for tobacco securitization is not ideal. However it is a source of funding that does not result in anyone losing their job or losing their health care or other essential services that are supported with state funds. The tobacco securitization plan gets us a more favorable bond rate of 5.25% versus the current 6.25% with an end result of more revenue for the state.

The budget repair compromise makes $180 million in cuts in addition to the $200 million that were enacted in the last budget. These cuts will mean significant shortfalls in services and programs that had expected to be funded after the last budget. In the budget repair compromise there are limits on where the state Department of Administration can find cuts. DOA may not cut SeniorCare, school aids, categorical school aids, transportation, Department of Revenue, or tobacco use control grants. These limits were high priorities for the Senate. The budget compromise does not take funds from the Department of Transportation, so anticipated highway projects will move ahead and the private sector jobs associated with these contracts will be protected.

A bright spot in the budget repair is the closing of two corporate tax loop holes that make companies like Wal-Mart pay a little more of their fair share. We are not asking big out-of-state businesses like Wal-Mart to pay more - we are asking them to pay their fair share like Wisconsin businesses do now.

If you have questions about the budget repair or any other Legislative issue, please contact my office at 608-266-6670 or 888-549-0027 or email me at sen.erpenbach@legis.wisconsin.gov