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Wisconsin Spending Cuts Prohibit Reductions in Highway Construction

Wisconsin Governor Jim Doyle has unveiled legislation that will reduce the state’s current budget gap by $700 million. The legislation includes ...

February 12, 2009

Wisconsin Governor Jim Doyle has unveiled legislation that will reduce the state’s current budget gap by $700 million. The legislation includes $125 million in cuts to state spending, secures new federal revenues through an assessment on hospital revenues, invests in growing the state’s economy by expanding tax cuts for businesses and expanding worker training programs and authorizes the spending of federal stimulus funds so work can begin immediately on transportation projects.

"This bill is an investment in Wisconsin’s economy and its workers and is what our families deserve," Governor Doyle said.  "This bill lays critical groundwork for getting our state’s economy back on track and creates a platform for putting federal stimulus dollars to work quickly and efficiently.  It identifies expenditures that can be cut right now, and targets revenue we can begin raising today."

Specifically, the economic recovery plan:

  • Cuts $125 million in state spending, including $500,000 by the state legislature.  It prohibits any reductions to highway construction activities;
  • Reduces health care costs and expands access to health care by securing $900 million in new federal revenue through an assessment on hospital revenues;
  • Attracts new business and creates jobs for Wisconsin workers by expanding eligibility access to tax credits by:
    • Enhancing the Accelerate Wisconsin tax credit for angel and venture investors in support of start-up technology companies,
    • Consolidating five existing tax credit programs (development zones, enterprise development zones, agricultural development zones, technology zones and airport development zones), increasing the ability to target those credits to businesses that create jobs, invest capital, provide training and retraining to new and incumbent workers, and retain jobs in companies with corporate headquarters in Wisconsin, and
    • Encouraging the continued growth of Wisconsin's agricultural economy through the creation of two new income tax credits for the modernization of dairy manufacturing and meat processing facilities.
  • Pre-approves $300 million in spending of federal stimulus funds in order to immediately put Wisconsin people to work on transportation projects that modernize state infrastructure.  Additional federal stimulus funds for transportation that are not contained in a bill introduced at the request of the Governor will be reviewed and approved by the Joint Committee on Finance through an expedited process;
  • Invests $3.6 million in worker training, including training in green building;
  • Authorizes combined reporting, bringing the state an additional $22.6 million for FY 2008-09 and $150.4 million for FY 2009-11;
  • Invests in and authorizes protections for tenants and home-owners facing foreclosure situations;
  • Invests in improving access to and oversight of child care programs.

Legislative Fiscal Bureau forecasts have projected declining revenue in this year and the next.  The November 20, 2008, budget deficit forecast of $5.4 billion by June 30, 2011, has now increased to more than $5.7 billion. This figure represents over 18 percent of general fund appropriations. 

Governor Doyle was joined at the announcement February 11 by Speaker Sheridan, Senator Decker, Senator Miller, and Representative Pocan. He thanked them for their work to help close the budget gap. "These discussions have required each of us to make compromises toward addressing these challenges," Governor Doyle said.

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