Monday, March 10, 2008

Governor Doyle Announces Budget Repair Plan

MADISON – Governor Jim Doyle today announced his strategy to repair a budget imbalance in the state budget caused by revenues that declined with a slowing national economy. The plan provides for sufficient funding of essential state and local services – education, health care and creating jobs – without raising taxes while also ensuring that the state ends each fiscal year in the black with a balance of about $100 million on June 30, 2009.

“All across the country, states are grappling with budget shortfalls, and here in Wisconsin we are not immune,” Governor Doyle said. “The budget repair that I am announcing today is a good, responsible plan, and it is important to act on it as quickly as possible. At the heart of it, this plan is straightforward. Just like any real solution to a budget gap, this plan cuts spending and looks for good sources of revenue, and it does it by protecting priorities like education, health care, and job creation while not raising taxes. The earlier it can be enacted, the more good it will do.”

Last week, the Governor called a special session of the Wisconsin State Legislature to begin on Thursday, March 13th in response to a notification from the Department of Administration that state expenditures would exceed revenues by more than 0.5 percent this year. The situation requires legislation to repair the budget.

The Governor’s budget repair plan:

· Reduces spending at state agencies while maintaining essential services for Wisconsin’s hardworking families. Department of Administration Secretary Michael Morgan will lead efforts to reduce funding from executive branch agency appropriations by $330.4 million over the biennium. This includes $200 million in cuts that state agencies were required to make under the 2007-09 biennial budget signed in October.

· Leverages more federal revenue working through the Medicaid system, supporting hospitals and lowering health care costs for businesses and families. By implementing a 0.7 percent assessment on hospital revenues, the state will secure $700 million in new federal revenue over the biennium. The assessment, supported by the Wisconsin Hospital Association, will be used to provide a Medicaid rate increase for hospitals. $125 million will be used to reduce state taxpayer support for Medicaid. A rural hospital and mental health care supplement of $2.5 million GPR will also be provided. The provision sunsets at the end of the 2007-2009 biennium.

· Maintains the state’s critical road-building and infrastructure maintenance program and preserves state support for vital education, local government, health care and economic development programs funded from both the general and transportation funds. The Governor’s proposal fully funds the state highway program by authorizing $190 million in GPR-funded general obligation bonds for the transportation program. It also accounts for an additional $76.9 million in federal transportation funds and the issuance of $67 million of already authorized transportation revenue bonds.

The Governor’s budget repair plan also garners $6 million by preventing corporations from abusing captive rental real estate investment trusts as a means of avoiding taxes on profits generated in Wisconsin, saves $5 million in funding for implementing the federal REAL ID law because of delays at the federal Department of Homeland Security, and it secures $15 million more annually from the refinancing of tobacco bonds.


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