Democratic Gov. Jim Doyle introduced legislation Wednesday to cut $125 million in state spending and raise numerous taxes on certain items in an effort to fix Wisconsin’s projected $5.7 billion shortfall.
The legislation, introduced with the support of several Democrats from the Assembly and Senate, aims to strengthen worker training and tax credits to jump-start Wisconsin’s economy.
Democrats are calling Doyle’s announcement Wisconsin’s economic stimulus plan, while Republicans say it is a front for streamlined sales and major tax increases for hospitals.
However, while the sides disagree on the title, the plan falls short in covering the state’s $5.7 billion shortfall and the almost $600 million gap that must be closed by June 30, only reducing the state’s budget gap by $675 million.
Questions regarding budget cuts will likely be answered next Tuesday, when Doyle plans to unveil Wisconsin’s biennial budget and more specific details will be released.
Doyle acknowledged that the cuts may result in lower levels of state services, longer lines, fewer regional offices and more consolidation.
As Doyle discussed the proposal, he said while Wisconsin is just one of the states facing economic crises, he hopes to fix the shortfall as quickly as possible.
“Nearly every state in the country is forecasting large budget deficits this year and over the next few years,” Doyle said. “And I am looking forward to a swift approval.”
The proposition would lower the costs of health care and expand access to health care for working, childless adults through an evaluation of hospital revenues that will secure $900 million in federal revenue while providing health care to every Wisconsin resident, according to Doyle.
The plan would also create jobs by attracting new businesses and progress Wisconsin’s technology division by expanding tax credit eligibility for investors.
“By streamlining our existing program we will be able to more effectively focus on companies that are creating Wisconsin jobs and investing in our shared economic future,” Doyle said.
With their eyes focused toward their goals, Democrats are prepared to roll up their sleeves and set their stimulus plan into action. However, Republicans foresee putting on the breaks ahead in what they say is an insincere stimulus plan.
“[Democrats] are just kick-starting the revenue early,” Senate Minority Leader Scott Fitzgerald, R-Juneau, said. “They probably saw that they needed this revenue now and they needed [the plan] to start moving forward so they are going to try to sell this as a stimulus.”
With the economy in the middle of a recession, some Republicans said the Legislature needs to implement tax cuts, not increases, and also reduce government instead of expanding it.
Democrats said their proposal would give the state’s economy the boost it needs to head towards economic recovery.
“We think it’s a great day for Wisconsin to try and spur the economy and to get people back to work,” Assembly Speaker Mike Sheridan, D-Janesville, said.
The proposal includes new tax on hospitals that will delve into federal reimbursement money and implements a sales tax on some items that have previously been exempt, like online music shopping.
The bill includes no income or general sales tax increase and Doyle said he has no plans to lay-off state workers, a measure some thought the money-tight state was taking into consideration.
“As we move around the state, we realize we are facing the worst economic times in the generation,” Sheridan said. “(But) we are committed to action, and we are taking a major step forward with this stimulus package.”