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State spending jumps over 10 percent in Doyle budget claims group

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State spending jumps over 10 percent in Doyle budget claims group
New Richmond Wisconsin 127 South Knowles Avenue 54017

The proposed 2009-11 state budget holds general fund spending increases to less than 1 percent, but expenditures climb by 10.7 percent from all revenue sources, according to the Wisconsin Taxpayers Alliance a non-partisan government watchdog group.

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Spending in 2007-09 was $56.7 billion and climbs to $62.7 billion in the proposed 2009-11 budget.

The budget also seeks to increase state taxes by a total of $2.5 billion over the next three years, most notably on large and small businesses, hospitals, smokers, investors and higher-income individuals.

These findings can be found in the WisTax's latest analysis, "First Look at Proposed 2009-11 State Budget."

While the general fund is where virtually all state taxes -- income, sales, business, excise -- are deposited, and historically, the main source of funding for most state programs, the nonpartisan research organization found the principal reason for the discrepancy is the shift between general-fund and "all-funds" spending. Federal stimulus dollars will pay for major state programs.

Federal funds to the state in 2007-09 are estimated at $14.5 billion; however, they jump $4.5 billion to about $19 billion in the next biennium.

WisTax used several examples to illustrate the impact of federal money.

General fund spending at the Department of Public Instruction -- the agency responsible for the state's largest expenditure, school aids -- is proposed to decline 2.4 percent.

However, when federal and other revenues are included, DPI's budget increases 6.3 percent from $12.52 billion to $13.31 billion.

Another example is the Department of Health Services, which is responsible for the state's second largest program, Medicaid.

Although general fund spending would be off 14.9 percent, proposed spending from all funds is up 16.1 percent. Federal stimulus dollars, along with new hospital tax revenues, explain the difference, according to WisTax.

Overall, analysis found that, of the six largest programs and agencies, the governor recommended five get less general fund support than requested.

However, four of the six would receive at least 5.5 percent more in 2009-11 than in 2007-09. When spending from all revenue sources is summarized, all six areas would receive increases, ranging from 3.4 percent (Children and Families) to 16.1 percent (DHS).

"The danger of paying for permanent state programs with temporary federal aid is the likelihood of more state budget problems come 2011," said Todd Berry, WisTax president

State budget documents forecast annual "structural deficits" of about $400 million in the 2012 and 2013 budget years. Wisconsin has had structural deficits in every budget since at least 1997, including a current one-year imbalance of $800 million.

According to WisTax, the use of proceeds from other funds such as tobacco bond sales and segregated transportation fund have propped up general purpose spending in the past, and now the federal stimulus funds are being used.

The alliance found it is unlikely that the proposed budget will decrease state budget deficits by 2011.

In addition to spending, the proposed budget contains proposals once debated as separate bills including three years of high school math and science to graduate, a statewide smoking ban, union rights for university faculty, and regional transportation authorities, among others.

WisTax can be found online at www.wistax.org.

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