It’s crunch time in Madison as unemployment and tax revenue numbers grow worse.
As May started, unemployment numbers were nearing double digits and grim news of layoffs continued to dominate the news. Those news items stretch from next year’s closing of the Chrysler engine plant in Kenosha and the future loss of its 380 jobs to the Dean Health Systems Inc. in Madison laying off 90 employees.
Wisconsin is not alone in bad news. The National Governors Association estimates 48 states are facing significant budget gaps. Only Arkansas, Missouri, North Dakota and Wyoming are exempt.
The NGA is projecting a $230 billion budget gap for the 50 states. The National Conference of State Legislatures sees a $121 billion shortfall for 2010 — that’s nearly 50 percent higher than it was projecting just four months ago.
In Madison the job losses and revenue numbers are going to further frustrate legislators. It will mean the Democratic majorities and Democratic Gov. Jim Doyle need to cut spending and increase taxes and fees.
Doyle’s economic plans call for a $1.7 billion increase in state taxes and fees. The governor had suggested a fee on the slaughter of cows and pigs. Fees are going up in other states. Divorce fees are going up in Florida, death certificate fees are up in Oregon and park passes are up in Michigan.
Doyle proposed a tax on oil company profits, but lawyers doubt that would be constitutional. At a minimum it would be a long fight in the courts. An alternative is an increase in the per-gallon gas tax.
The Democratic majorities in the Legislature have deep divisions. Those elected to their first or second terms are nervous and jumpy about the staggering financial decisions they face. Doyle is having, and will continue to have, a difficult time selling his proposals to them.
State government and its financial problems have been pushed off the front pages of state newspapers by a new president.
The federal picture can appear optimistic at times. The feds can, in effect, print money to cover their spending and tax-cut plans, while states lack this ability.
Some see the budget situation as a political albatross around Doyle’s neck for 2010. Speculation is mounting that Doyle won’t seek a third term and instead will opt for a position in the Obama administration.
Matt Pommer worked as a reporter in Madison for 35 years. He comments on state political and policy issues.