(AP) – Wisconsin’s budget deficit has ballooned to $6.6 billion because of falling state tax collections, grim news that could foreshadow deep cuts to state programs, according to a report released Monday.
The Legislative Fiscal Bureau report said the projected deficit has increased by $1.6 billion through June 30, 2011, because individual and corporate income tax revenue has been far less than projected in January.
The figure is even worse than the $1 billion to $1.5 billion that Gov. Jim Doyle and lawmakers said last week they expected to be added to the state’s $5 billion budget deficit.
In anticipation of the drop, Doyle announced a plan to lay off up to 1,100 state workers, to require most of the state work force to take 16 days off without pay over two years and to cancel 2 percent raises that many workers were expecting this summer.
Most agencies would have their budgets cut by 5 percent under his plan, which would not raise taxes. He also said cuts to education, state aid for cities and health care programs will be necessary.
Democrats who control the Legislature said they were reviewing Doyle’s plan and would consider all options, including budget cuts and tax increases, to solve the deficit. Monday’s report underscored the severity of the problem.
Tax revenues are expected to drop $408 million through June 30 and by $573 million and $622 million in the following two budget years compared to estimates issued in January, the report said.
Individual income tax revenues plummeted 35.8 percent in April compared to the previous year as the state’s unemployment rate shot up, the report found. Overall, they are down this year by 8.3 percent. Corporate income taxes are also down.
The state has lost 100,000 jobs since March 2008 and statewide unemployment of 9.4 percent is at a 26-year high.
State Rep. Robin Vos, a member of the Legislature’s budget committee, said the report showed “a fairly dramatic decline in state revenues.” He said Doyle’s proposed cuts were a step in the right direction but still would likely not go far enough to balance the budget.
“What we’re seeing is this economy is really hitting people all across the board,” said Vos, R-Racine.
