WisPolitics Budget Blog

Gov. Jim Doyle focused on the need to improve passenger rail access in his testimony this morning before the House Transportation and Infrastructure Committee. Doyle called passenger rail "the missing link" in federal transportation policy.

Doyle said Wisconsin is one of 14 states that commit funds every year toward rail corridor services, particularly on the Hiawatha Line between Milwaukee and Chicago. Investment has also been ongoing on corridors that enhance existing Amtrak services, he said.

"I am pleased that there is money and a focus in the recovery legislation that is directed at Amtrak and for state investments in this system," he said. "This is a critical time to recognize the opportunity for expanding passenger rail services. States want to invest and with the opportunity to carry out their plans with a federal partner, we can lead the nation into a new era of passenger rail service."

Doyle also touted the long-term benefits of inner-city rail service, saying it will create new jobs and enhance property values. Wisconsin now has $137 million in projects with Canadian National Railroad that are ready to go within 90 days, he said.

Those projects will complete a major portion of the high-speed rail corridor between Milwaukee to Madison, and will also increase the frequency of rail trips between Milwaukee and Chicago, he said.

Doyle said work has been going on here for the last three to four weeks to "make sure we have the projects ready to go, that we have cleared out whatever excessive state hurdles may be in place, that we will collapse the time that it might normally take while protecting transparency and good competitive bidding processes."

Doyle said there has also been a study of labor ability and the capacity of the construction industry to make sure there are enough resources to get the projects underway quickly.

"We are your partners here in seeing whatever the dollar figure that's put out is put to use as quickly and effectively as possible," he said.

Listen to audio of the testimony here.

Gov. Jim Doyle is mixing in business while in Washington, D.C., for the Obama inauguration.

Doyle said today in a conference call with reporters that he will testify before the House Committee on Transportation and Infrastructure on Thursday morning. Doyle said his testimony will focus on rail needs in Wisconsin and the Midwest.

Doyle also said he plans to meet with members of Congress tomorrow about the federal recovery package under consideration in Congress. And he isn't going to be shy about demanding Wisconsin doesn't get overlooked in the federal stimulus package.

"We're going to do everything we can to make sure that we do get our fair share," he said.

The governor cited Wisconsin's "strong mebmers of Congress," especially House Appropriations Chairman Dave Obey, D-Wausau, as helping in that effort.

State budget director Dave Schmiedicke estimated that Wisconsin could be in line to receive $2.5 billion in federal stimulus money for education and medical assistance programs.

Schmiedicke also said that estimates show the state could receive $575 million for transportation and infrastructure projects.

Schmiedicke made the remarks at a Wisconsin Credit Union League meeting at the Monona Terrace this morning. He was joined at the forum by Rep. Mark Pocan, the co-chair of the Joint Finance Committee, and Todd Berry, president of the Wisconsin Taxpayers Alliance.

The estimates given by Schmiedicke were based on the $87 billion allocated for the Medicaid program and $79 billion for education in the proposal from the House of Representatives last week. Schmiedicke's estimate is based on population and income figures, and he said the state will likely receive about 1.7 percent of the funding for those programs.

Pocan, D-Madison, said the state faces a "dire situation" that is largely due to the faltering federal economy. Schmiedicke said the federal economy had a "meltdown" in October and November.

Schmiedicke said the federal government will play a vital role in sustaining health care program levels and education funding in the state in the upcoming budget. In the absence of federal money, Schmiedicke said the state is "looking at dramatic cuts," and that cuts will be necessary even with federal help.

Pocan warned that federal stimulus money the state receives won't provide "dollar-for-dollar" relief to the state deficit, noting that much of the money is meant to stimulate the economy through job creation programs.

"Not everything we get from the feds is coming off the state budget," he said.

Berry said he is concerned that the state will use the federal stimulus money the way the transportation and injured patients and families compensation fund have been used, "one-time pots of money to pay for permanent programs." He said that approach would only make the state's fiscal problems worse in the future.

But Berry allowed, for the state economy "the worst case scenario is the status quo."

With the state having faced structural deficits going into the last two budgets, Pocan said "the low hanging fruit is gone" when it comes to cuts, and even with an infusion of federal cash the current deficit will be made up with "very serious cuts."

"If we don't get creative that means cuts to education and cuts to health care," Pocan said.

Pocan said the state stimulus plan will include "tax fairness" provisions, and that some "special interests" haven't been paying their fair share in the last decade. The goal is to pass the state stimulus by mid-February, Pocan said.

"We have done a lot of things for special interests that have been bad for Wisconsin," he said. "Some people have unduly benefited in the last decade-plus."

Schmiedicke said a portion of the state stimulus plan will be focused on "targeted tax credits" to stimulate job creation.

Pocan said the goal with the tax fairness initiatives is to raise revenues without hurting working families. Pocan also said while nothing can be ruled out on the revenue side, "The goal is not to do across-the-board general tax increases."

Following the introduction of the budget by Gov. Jim Doyle, which is slated for the first week in February, Pocan said he hopes the Legislative Fiscal Bureau will finish their analysis in two-and-a-half weeks. Following a series of public hearings throughout the state, Pocan said the JFC will deliberate six to eight weeks, and then send it to the full Legislature by the end of May. That would give the Legislature and the governor a full month to finish the budget by the end of the fiscal year on June 30, he said.

"We want to get the budget done on time," he said.

State sales tax collections for the month of December 2008 fell 3.8 percent, or nearly $12 million, over the the same month last year, according to data released today by the Department of Revenue.

For the year-to-date, sales tax is down 2.2 percent over the previous year.

Overall GPR collections for December fell 7.4 percent, but year to date collections are up about $45 million, or 0.8 percent.

See more data from Revenue here.

JFC co-chair Mark Pocan says the state medical assistance programs will benefit more if the federal government divides stimulus money by population than by other factors.

The $825 billion House stimulus bill, unveiled yesterday, includes about $87 billion to help states with Medicaid funding. Pocan said how it’s split could mean a difference of the state receiving $450 million or $1.5 billion from the feds for the program in Wisconsin.

"Depending on how they divvy it up, we could do really well or just kind of OK," said Rep. Pocan, D-Madison.

"If they do it by population, Wisconsin would do well," but the state wouldn't do as well if it’s decided by other factors like unemployment rates, he said.

"We hope they will do things as equally as possible," he said.

Assembly Minority Leader Jeff Fitzgerald, R-Horicon, says he is troubled by the amount of spending in the plan that seems to merely increase government spending.

"The federal government will spend this new money, this is a certainty. It was my understanding, however, that an economic stimulus package was supposed to fuel growth in the economy, inject cash into the credit markets and incentivize companies, large and small, to create jobs," Fitzgerald said in a statement.

"After reading through the Democrats' proposal in the U.S. House, it is clear that significant portions of this money do not meet those conditions. For instance, is it appropriate for an economic stimulus package to spend an additional $1 billion for the next census? How many private-sector jobs does $400 million upgrade to the Social Security software system create if federal employees will do the work?"

Pocan said plan could be a big boost for the state economy if it House plan moves through unaltered, Pocan said.

"It looks like the potential is there for a lot of money to provide economic stimulus in Wisconsin," he said.

Pocan said there are state staff focused on how best to utilize the federal dollars even as work continues on the 2009-11 state budget and a state stimulus package to help balance this fiscal year's budget. The state is facing a $5.4 billion deficit over the next through June 2011, including about $380 million in this fiscal year.

Pocan said the state stimulus package will consist of four categories: revenue enhancers, job creation, program cuts to balance the budget in this biennium, and getting the state set up to quickly and efficiently use federal stimulus cash.

The U.S. House of Representatives today released a draft of the economic stimulus package.

The summaries of the bill do not include a state-by-state analysis of the impact of the package.

See a summary of the House Recovery Act here.

See the bill text here.

See the report on the bill here.

See a press release from U.S. Rep. Dave Obey, chairman of the House Appropriations Commitee, here.

Gov. Jim Doyle said today that his early read on the U.S. House of Representatives' proposal for a federal economic stimulus package the bill is one "that Wisconsin is really well-positioned to benefit from."

Doyle, speaking with reporters after addressing a Wisconsin Bankers Association's luncheon at the Monona Terrace in Madison, said a state stimulus package should include provisions to take full advantage of the federal cash.

"We really have to make sure that what we have in there is everything we need in state law to take full advantage of the (federal) stimulus package and what's coming to the state," Doyle said.

Doyle said he would like to see the hospital assessment in the state package and his oil franchise fee proposal.

"Better to get it started earlier rather than later," he said, but added he will "be sensitive" to whether lawmakers want to include it as part of a stimulus plan or in the 2009-11 budget.

On the hospital assessment, Doyle said if it's done quickly it can be made retroactive to capture more federal dollars.

*Doyle warned that state employees may not get a raise this budget cycle.

"I think everybody looking at the world and the economy right now shouldn't be expecting a pay raise in the next couple of years," Doyle said.

*He also said he'd like to keep school funding at least level, but said K-12 school funding will be "part of the answer to this (deficit)."

Doyle said he won't allow schools to be cut in a way that causes "long-term harm." But he said "getting held even is the new increase in this budget."

"I'm willing to make hard decisions in other things to make sure we protect education," he said.

"The schools are going to have to be part of the answer to this," he said. "The schools are the number one item in the state budget and given what we're dealing with everybody's going to have to deal with it."

A hospital assessment proposal unveiled today by the Department of Health Services would bring in $1.65 in federal money for every $1 taken from state hospitals, according to a press release.

The DHS says under the plan the state will receive an additional $300 million in each year. The number is higher than previous proposals because of an increase in the assessment on hospital revenues. The previous proposal, which was pulled from the state budget by Assembly Republicans, assessed hospitals at a rate of .08 percent of gross revenues. The new proposal has an assessment rate of 1.4 percent of gross revenues, according to DHS spokesman Seth Boffeli.

According to DHS, the plan would:

* Invest approximately $240 million into the Medicaid program over three years.

* Raise the hospital Medicaid rates to almost triple the average Fee-For-Service outpatient visit rate.

* Raise inpatient rates by an average of 32% per discharge.

The federal money would also be used to fund statewide implementation of the BadgerCare Plus Core Plan for Childless Adults.

The Wisconsin Hospital Association applauded the proposal in a press release.

Kenosha County Executive Jim Kreuser released a statement today saying he's ready to take federal stimulus money that Milwaukee County Executive Scott Walker "doesn't want."

Democrats and unions have been pummeling Walker for statements he's made saying Milwaukee County will not be submitting requests for projects to be included in the federal stimulus package.

"I want to make clear to the world that most elected leaders in our region are in favor of creating jobs," Kreuser, the former Assembly Minority Leader said. "We all hope Walker's inexplicable stance doesn't make businesses think twice about adding jobs in our region."

Walker released a statement today saying taxpayers "need a real economic stimulus, not higher taxes."

"'Free money' from the federal government is rarely free," said Walker. "In fact, most transportation grants require a 20%, or greater, match from the local government. 'Free money' sounds nice until you read the fine print and realize local taxpayers may be forced to pay for a local match that they can not afford with higher taxes."

A new coalition headed by Midwest Environmental Advocates and Citizen Action of Wisconsin is urging state and federal leaders to invest billions in federal stimulus money toward "green" economic recovery projects.

The group, Coalition for Wisconsin's Green Economy, held a press conference this morning in the Capitol to outline its "Blueprint for Wisconsin's Green Economy," which lists more than $2 billion in environmentally-friendly infrastructure projects that the group argues will create about 30,000 new jobs.

"We're at a critical point where we can jump start our economy with targeted investments that build Wisconsin's 21st Century green economy," Madison Mayor Dave Cieslewicz said in a statement. He advocated, in particular, spending on mass transit projects, which accounted for a large segment of the infrastructure proposals.

Among the projects listed in the blueprint are the KRM commuter line and Chicago-Milwaukee-Madison high-speed rail line, as well as improved buses and terminals in Milwaukee. The plan also suggests improvements to Milwaukee's sewer systems, and hundreds of millions in public and private renewable energy projects.

"With clean air, fresh water, reduced poverty, green manufacturing, and green education, Wisconsin will emerge as a sign of hope for a secure and sustainable green economy," the report says.

*See the press release here.
*Read the Blueprint for Wisconsin's Green Economy.

Wisconsin Gov. Jim Doyle, a Democrat, and Minnesota Gov. Tim Pawlenty, a Republican, are ordering their state agencies to work together to find areas where the two states can combine services and procurement.

"The people of our states are used to seeing neighbors cooperate to get through challenging times," Doyle said in a press release. "This is a common sense way to cut government spending while protecting essential services during a tough economic time for our country."

The governors announced the plan this morning at a news conference in St. Paul. Another press conference is set for 1:30 p.m. in Madison.

The states will work together to purchase items such as road salt, heavy equipment, institutional food and softward in bulk. Wisconsin and Minnesota will also examine their fixed assets to determined whether resources can be shared.

As an example, the press release says that Wisconsin's DNR may rent helicopter service from Minnesota to save Wisconsin money and generate revenue for Minnesota.

The two states will also look to consolidate functions, such as nursery and hatchery operations, call centers, licensing functions and Duluth-Superior operations.

Gov. Jim Doyle said Monday that federal and state stimulus plans presented an opportunity for the state to do some "really big things."

Doyle said he believes there is strong support in the incoming Obama administration and Congress for broadly defining what constitutes infrastructure in a possible federal stimulus package to include rail, airport, harbor and other improvements.

"This is an opportunity for us to do some really big things," Doyle said, and listed projects such as the KRM commuter rail line, a possible high-speed rail line throughout the Midwest, and a "smart" electrical grid system.

"I'm actually really looking forward to this year," Doyle said, "because I think that despite these enormous challenges, this opportunity that we have is not an opportunity that comes along very often, and it may not come along in another generation, of really doing some major things in Wisconsin to improve this state and really get our economy moving again."

In the wake of Quad/Graphics announcement that it would cut 550 jobs (with 400 of those being in Wisconsin), Doyle said he expects more layoffs in other companies going forward. What concerns him is seeing companies that were recently planning expansions now pulling back.

"Quad/Graphics is a great example of a company that's been expanding; it has had good expansion plans and good growth plans," Doyle said. "And now because of where the economy's gone they've had to make some really difficult adjustments."

Quad/Graphics executives spoke with Doyle Friday about the company's plans and said they believe the company is strong and will be in a good position when the economy rebounds.

Read more from Doyle here.

Listen to audio of the event here.

State employees shouldn't expect a raise over the next two years, state grants will shrink and most state agencies should expect no increases in their budgets and even a possible cut, Gov. Jim Doyle told business and investment leaders at an economic forum in Milwaukee today.

While there are some areas that can't be held flat, Doyle said that for most departments, "I'm telling everybody if you come out of this where you were two years ago, you should be very, very happy."

Doyle said that even areas he wants to protect, such as K-12 and higher education, medical expenses programs, corrections, and funding for local fire and police, can expect flat or reduced budgets.

"All of those are going to see, if nothing else, held even, or some cuts; everybody's going to have to tighten their belts," Doyle said. "Even those areas where we have to protect priorities are not going to come out unscathed."

Dane County Executive Kathy Falk sent a short list of budget recommendations to Gov. Jim Doyle which include alcohol policy changes and the establishment of regional transit authorities.

See Falk's letter to Doyle here.