fedgazette

A little tight around the budget belt

Wisconsin State Roundup

Published January 1, 2007  |  January 2007 issue

Maybe the state will be able to take a cue from fad weight-loss reality shows. A November report found that the state budget was overweight to the tune of $1.6 billion, or 6 percent of the state's expected $26 billion biennial budget.

Newly re-elected Gov. Jim Doyle pledged throughout his campaign not to raise income, corporate or general sales taxes, but he has left the door open to new fees to help close the deficit, which is the result of slightly slower tax collections, higher government spending and several recent tax cuts, including the elimination of state income taxes on Social Security benefits.

Doyle asked state agencies to brainstorm possible options for savings; a review of those submissions by the Milwaukee Journal Sentinel found that they fell well short of closing the deficit, in part because several major spending areas—like parts of the state's university system—did not participate.

Legislators have reportedly been eyeing the elimination of some of the many sales tax exemptions currently allowed under state law that add up to almost $4 billion-almost as much as the 5 percent sales tax currently brings in. The biggest exemptions in terms of forgone revenue are for food, health care and motor fuel, though total exemptions for things like prescription drugs and computer, legal and advertising services cost almost $500 million.

Ronald A. Wirtz

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