November 11, 2008 Doyle: Deficit Could Reach $5 Billion or More

Gov. Jim Doyle said today that the budget deficit for the next
biennium could reach more than $5 billion.

“We have come into a really serious and extraordinary set of economic
circumstances in this country,” Doyle said.

Doyle met with reporters to discuss the impending deficit a week
before a report will be released by the departments of Administration
and Revenue detailing the state’s budget outlook. Doyle said more
details on the scope of the problem and how it will be addressed will
be forthcoming in that report and in the budget he proposes in late
January or February.

But he did say that he will do “everything humanly possible” to avoid
an increase in general taxes like sales and income, though he wouldn’t
completely rule out that alternative.

“We got through the last significant deficit without raising taxes and
that is what I really want to accomplish here,” Doyle said.

“Having said that,” Doyle continued, “if you finally get to a point
where you would just have to destroy schools or have such high tuition
increases at the university that ordinary people wouldn’t be able to
afford it, then you have to look at everything. But I think people
know me well enough by now to know that I work to do these budgets and
I’ve worked very hard to do them without tax increases.”

He said all agencies are going to have to tighten their belts.

“The new increase is a flat line,” he said.

Doyle said one of his priorities will be to protect K-12 education and
the university system from major cuts, but said the state “may have to
save some money on school aids” and the UW System is “definitely going
to have to participate in this.”

“The bottom line of this,” Doyle said, “is I’m willing to make very
deep cuts.”

Doyle added, “But I don’t want to see schools go into total crisis

Doyle also said one of his priorities will be to “make sure we don’t
go backwards” on areas of investment in biotechnology, renewable
energy and advanced manufacturing.

“We’ve made significant investments that I don’t want to see us walk
away from,” he said.

In addition, the state budget for this current fiscal year could end
up $400 million to $500 million in the red, Doyle said. But he
couldn’t say yet whether the current shortfall will result in the need
for a budget repair bill, or can be addressed in the next state

Doyle said state revenue growth that had been projected at 1.5 percent
is now expected to become a decrease of 2.5 percent over the previous
fiscal year. Revenue projection for fiscal year 2010 will continue to
fall by 1.5 percent, he said, before seeing a modest increase in the
second year of the upcoming biennium.

“Obviously we have a huge challenge ahead of us in how to deal with
this,” Doyle said.

Doyle pointed to large deficits faced by many other states as evidence
that the problem extends far beyond Wisconsin and suggested some
federal assistance may be in order to help the states out with health
care and education costs.

“We obviously need some help from Washington,” Doyle said. “It’s not a
matter of helping state governments, it’s how we help people in these

The governor reiterated his support for the hospital assessment to
help defray state Medicaid costs and for an assessment on motor fuel
suppliers to help fund road projects.

Doyle said modifying state shared revenues to municipalities is
“something we will have to look at,” but added he “didn’t want to go
back on the commitments we’ve made.” He also said the number of state
jobs will be decreased, though he hopes the eliminations can be
handled through attrition and not through layoffs.
From WisPolitics, Tuesday afternoon, November 11, 2008