Tax and fee increases in Doyle budget draw GOP ire
(Published Tuesday, February 13, 2007 10:15:24 AM CST)
A d v e r t i s e m e n t
By Scott Bauer Associated Press
MADISON, Wis. - While Gov. Jim Doyle campaigned on the promise of not raising general sales or income taxes, he's proposed a number of targeted tax and fee increases that are drawing fire from Republicans in advance of the budget's release on Tuesday.
Doyle wants to raise the cigarette tax by $1.25 per pack, increase the vehicle registration and driver's license fees, and relax the property tax cap thereby making it easier for local governments to tax more.
He has also generally expressed support for instituting a tax on gross revenues at the state's hospitals, which critics say will be passed on to patients. Doyle also wants to impose a tax on the five largest oil companies, based on the amount of oil they sell in Wisconsin, but critics have said that, too, could be passed along to users at the pump. That money would be used to improve the state's roads.
What the governor hasn't done is detail how he will deal with a projected $1.6 billion shortfall, which comes about from spending requests by state agencies exceeding revenue expected to be collected in the 24 months starting July 1.
"Agencies aren't going to get everything they wanted. Nobody's going to get everything they wanted," said Doyle's spokesman Matt Canter when asked Monday how the governor intends to balance the budget.
Canter called the governor's budget fiscally responsible. He said the proposed tax and fee increases are targeted to meet specific expenses, such as rising Medicaid costs, road repair or unfunded federal mandates.
But Republicans were taking aim.
"I've never seen a budget like this," said Rep. Kitty Rhoades, co-chair of the budget-writing Joint Finance Committee and a nine-year veteran lawmaker. "Evidently, the governor believes taxpayers can pay more now than they've ever before. Call it whatever you want, it's still going to be coming out of your pocketbook."
Rhoades said the budget can be balanced without raising taxes if its spending is brought in line with its ability to pay.
"Somebody's going to have to be grown up here and step in and do that," she said. That duty, Rhoades said, will fall to the Assembly, where Republicans hold a thin five-vote majority. Doyle will likely face a smoother road in the Senate, where Democrats are in control 18-15.
Assembly Speaker Mike Huebsch, R-West Salem, did not immediately return a call Monday seeking comment. But he has been critical of some of Doyle's proposals, particularly speaking against raising property taxes and cigarette taxes or imposing a tax on hospitals.
Assembly Majority Leader Jeff Fitzgerald, R-Beaver Dam, said Wisconsin faces a budget crisis and Doyle's solution relying on new and higher taxes will be fought.
Senate Minority Leader Scott Fitzgerald, R-Juneau, called Doyle's proposal bad news for the middle class.
"There is literally nobody in Wisconsin who will be able to avoid paying higher taxes under the budget proposed by the governor," Scott Fitzgerald said, estimating the tab on what Doyle has proposed to date at more than $1 billion.
The governor delivers his plan to lawmakers on Tuesday night.
From there, the Joint Finance Committee, evenly divided between Republicans and Democrats, will start to work on the proposal and eventually present its version of the plan for the Republican-controlled Assembly and Democratic-led Senate to consider.
One of the most costly items in Doyle's budget will be continuing providing K-12 public schools with two-thirds of the money they need to operate.
This fiscal year that totaled $5.9 billion, or more than 20 percent of the entire budget. The state's commitment to school aid is a key part of the equation that determines how heavily schools have to rely on property taxes to meet their expenses. In general, less support from the state translates into higher property taxes.
Doyle has said he will loosen the two-year property tax cap that expired in January, allowing taxes to go up 4 percent. That would result in an estimated tax increase on a median-valued home of $75, or 2.7 percent. The tax bill on such a home was $2,730 last year.
Summary THE PROBLEM: Based on requested spending by state agencies, and projected revenues, the state faces a $1.6 billion budget shortfall for the two-year period starting in July.
DOYLE'S PLAN: Gov. Jim Doyle has unveiled numerous proposals to spend hundreds of millions of dollars, but hasn't said yet how he will plug the shortfall.
WHAT'S NEXT: Doyle will have to present a balanced budget to the full Legislature on Tuesday when he releases the plan. From there, lawmakers will pore over the proposal before both the Republican-controlled Assembly and Democratic-led Senate vote to pass it later this spring or summer.
