MADISON, Wis. (AP) — Up to 1,400 state employees could be laid off under a new budget-balancing plan announced Thursday that cuts funding for state agencies, schools and local governments.
Gov. Jim Doyle stood with the two Democratic co-chairs of the Legislature’s budget-writing committee to announce a deal that he says will close a projected $1.6 billion budget shortfall without raising sales or income taxes.
Doyle’s $63 billion, two-year budget plan released in February solved a shortfall that then was projected to be about $5 billion. But tax collections continued to tank in March and April, forcing Doyle and lawmakers back to the table to come up with another $1.6 billion.
Under the solution Doyle announced Thursday, funding for state agencies over the next two years will be cut 5 percent under the agreement, and aid to schools and local governments will be cut 2.5 percent. Those cuts total about $670 million over two years, with schools shouldering about $290 million.
Doyle said he hoped to enact protections to reduce the likelihood the cuts to schools and local governments will translate to higher property taxes.
The deal was worked out in secret but will be subject to a series of votes in the Democratic-controlled Joint Finance Committee starting on Friday.
Doyle called the deal a “responsible agreement” that protects middle class working families.
“I sincerely believe we’re setting the course for a better future,” he said.
Democratic leaders of the Assembly and Senate — Speaker Mike Sheridan of Janesville and Majority Leader Russ Decker of Weston — issued statements praising the deal for not raising sales or income taxes.
The cuts to government spending are commendable, but Doyle’s plan will raise taxes, said Rep. Robin Vos, R-Racine, a member of the budget committee. He noted Doyle’s endorsement of a 75-cent fee to be paid by cell phone users that will offset cuts in aid to local governments.
“He took the easy route out,” Vos said, saying government should be cut more.
Doyle said general state spending will decrease over the two-year budget by 3.4 percent, while overall state spending will still increase due to billions of dollars the state is receiving under the federal stimulus law.
The effect of the cuts to schools, and whether they will force teacher layoffs, will vary widely by district, Doyle said.
“We would rather not be doing this,” he said. “We don’t have any other acceptable options for closing this gap.”
Also under the governor’s plan, the $100 million raised from a 75-cent fee paid by cell phone users, already approved by the budget committee, will be given to local governments to help offset their cut in aid. Originally the money was to be used to help staff and upgrade emergency 911 call centers around the state.
The plan includes restructuring debt to take advantage of lower interest rates, re-estimating how much the state can receive in federal matching money from a previously approved hospital tax, and tax code modifications, improved tax collections and keeping some tax credits at the current level instead of making them more generous.
Doyle’s announcement shed more light on an outline of the plan he first unveiled on May 7. His proposal also includes 16 days of unpaid leave for state workers and the rescinding of a 2 percent pay raise for about 9,500 nonunion state employees.
Not all state agencies will be cut 5 percent. There will be exceptions for those providing critical services, the University of?Wisconsin?System and other agencies whose receipt of federal stimulus money is dependent on maintaining certain levels of spending, Doyle said.
The 5 percent cut will result in about 1,000 layoffs of state workers, the governor said. Another 400 will be laid off if state unions don’t agree to give up a scheduled 2 percent increase in pay scheduled to take effect in June.
Union leaders have said they are unwilling to give up the pay raise.
AFT-Wisconsin, which represents about 10,000 white collar workers, won’t give up the raise as long as the state continues to outsource additional work to contractors, union president Bryan Kennedy said Thursday.
“The state is wasting hundreds of millions of dollars on private contractors when state employees could do the work for less,” Kennedy said.
Marty Beil, executive director of the 20,000-member?Wisconsin?State Employees Union, said earlier this month that his union also was unwilling to give up the pay raise.
