Questions linger about Wisconsin’s future

MADISON — There are a lot more questions than answers about a pending state budget shortfall that could lead to higher taxes or deep cuts.

The shortfall could be $400 million or more.

Deep spending cuts may be needed. But no one’s saying yet what they might be.

State jobs might have to be held open. But for now, layoffs aren’t being discussed.

And no one dares talk about another option to right the ship — raising taxes.

This is an election year, after all, and the last thing any politician from either party wants to do in the months leading up to Nov. 4 is endorse raising people’s taxes.

Democratic Gov. Jim Doyle is promising not to increase taxes to solve the shortfall, and Republican lawmakers have been adamant about taxes not being raised.

“We can get through this without raising taxes,” said Doyle’s spokesman Matt Canter.

But Doyle’s administration is being tightlipped about how they will actually do it, saying they need to wait for official revenue estimates that are coming out in mid-February.

The legislative Fiscal Bureau issued a letter on Thursday warning that because of a weakening economy state tax collections could be between $300 million and $400 million short by the end of the current budget, which is 17 months away.

A $400 million cut equates to less than 1 percent of the total $57.2 billion budget that runs through June 30, 2009. That’s on top of $100 million state agencies are in the midst of cutting now as required by June 30.

There are a number of options. State agencies have already been told to avoid filling nonessential vacancies, limit out-of-state travel and not renew or enter into new leasing contracts.

“State government faces a considerable challenge over the next 18 months,” warned Department of Administration Secretary Michael Morgan in a letter to agencies on Thursday telling them of the cost-saving steps. He warned of “additional reductions” but didn’t say what they might be.

The state can make meaningful short-term savings, like stopping travel, said University of Wisconsin-Madison political science professor Charles Franklin. It can also use accounting tricks, like moving an expense from one fiscal year to another, but ultimately those bills have to be paid, he said.

The real question is who will be asked to make the cuts, he said. A small reduction across all of state government is one thing, but if certain areas like prisons and health care are spared, the cut will be more severe for everyone else, Franklin said.

As to whether layoffs will be necessary, assistant Department of Administration Secretary Dan Schoof said “Drastic things like that will have to wait.” Canter said state workers will be asked to do more with less.

State jobs are more likely to be left open if they are vacant, or never filled at all, as opposed to actually laying off workers, Franklin said.

“The bigger concern for state employees would be programs that are currently planned that are not yet implemented that don’t get implemented,” he said.

Doyle has said that not starting programs could be an option, but he hasn’t specified which programs may be affected. The solution will involve widespread cuts that protect education, health care and public safety, Canter said.

Republican lawmakers, including Assembly Speaker Mike Huebsch, R-West Salem, have been calling for spending cuts to balance the budget.

Senate Majority Leader Russ Decker, D-Weston, said the state’s most vulnerable citizens need to be protected from any potential cuts.

“I challenge all of the Republicans cheerfully calling for reducing government spending to start offering ideas if that is the only direction they want to go,” he said.

Tags: state, budget, wisconsin, raising, taxes, doyle, politics