State Budgets: Wisconsin Governor Boosts Spending, Hopes for Federal Bailout

December 26, 2008

Gov. Jim Doyle (D), in urging Congress to approve a bailout for state governments, reported that the state faces a $5.4 billion budget shortfall over the next two years in a $28 billion budget. (This number has been criticized since it assumes $4 billion in new spending increases.) Hardest hit have been corporate tax collections (down 30%); sales tax collections are down just 1.8%. How much of the state’s budget crunch is due to the recession and how much is due to mismanagement and a poorly designed tax system is debatable. Doyle has in the past infamously proposed a destructive windfall profits tax and raising taxes by 50%, and is a big proponent of using the tax code to pick winners and losers. (Doyle’s film tax credit, for instance, has enabled him to be linked with popular actor Johnny Depp.) Doyle doesn’t appear to be considering solutions other than a federal bailout. In related news, a judge recently ruled that Doyle’s transfer of revenue from a dedicated fund to the general fund to balance the budget was legal.

More on Wisconsin here.


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