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Report: Shortfall to hit $1.5 billion for 2011-13

Next biennium may still fall short, some say too soon to tell

While Gov. Jim Doyle’s 2009-11 state budget includes efforts to reduce the expected budget shortfall and create a budget surplus, Wisconsin could still face a budget shortfall of more than $1.5 billion during the 2011-13 biennium, according to a Legislative Fiscal Bureau memo released Thursday.

The LFB memo said the structural deficit, the difference between tax collections and government spending, will be $1.57 billion by the end of the 2013 fiscal year.

Presently, the state faces an expected $5.9 billion budget shortfall over the next two years.

However, according to Doyle’s State Budget Director David Schmiedicke, the budget shortfall for 2011-13 will only be about $900 million.

“The $1.5 billion [from the LFB estimate] assumes that money for Medicaid in the Recovery Act goes away and the see to reduce costs or find other federal revenue,” Schmiedicke said. “It doesn’t take into account the return to economic growth that economists are predicting during that time period. It’s different perspectives on the same number.”

Schmiedicke added Doyle’s 2009-11 budget, which will begin in July, will create a budget surplus of over $270 million as a result of tax cuts that will be phased in after one-time money the state is receiving goes away.

Republicans, however, are skeptical of the governor’s budget and response.

“The taxes and fees in Doyle’s budget are job-killing, government-growing taxes that will touch virtually every citizen in Wisconsin. They harm Wisconsin’s economic health at a time when we can least afford it,” Sen. Mike Ellis, R-Neenah, said in a statement. “Doyle’s reckless budgeting will leave us with $1.5 billion in unpaid bills for the 2011-13 biennium.”

Republican Party of Wisconsin spokesperson Kirsten Kukowski expressed similar concerns.

“News of Doyle’s $1.5 billion four-year deficits shows that using one-time money to plug budget holes instead of cutting spending isn’t the answer to our economic problems. Gov. Doyle needs to make the tough decisions to cut spending and start looking out for the taxpayers,” Kukowski said.