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• $68 million transportation shortfall only part of state budget problem

By Brady Bautch, RiverTown Staff writer

A report released last week by the non-partisan Legislative Fiscal Bureau paints a bleak budget picture for Wisconsin's state budget in the next biennial budget.

The report shows that during the next two fiscal years the state will end each year with $11 million on the plus side.

However, it does so by not meeting the required $65 million statutory balance.

In fact the report shows that each year the state will miss the statutory requirement by $54 million.

The bigger problem comes in the following budget.

The report predicts that by the end of the 2007-08 fiscal year the state will face a $691 million deficit which will jump to $846 million by June 30, 2009 - for a total deficit of more than $1.5 billion.

While the report predicts state revenues will continue to rise - from $12.7 billion in 2006 to $13.1 billion in 2007 spending will also increase. In the next two years the report predicts that spending will increase to more than $13.4 billion.

However, the head of the LFB cautions that while the numbers are steep, things can change.

"The report does not account for any additional growth in revenues such as an increase in tax revenues" said Bob Lang. "It also doesn't account for any changes in expenditures."

One area Republican, who is on the Legislature's Joint Finance Committee, says the budget was balanced when it left the Legislature, but that Democratic Gov. Jim Doyle's line item vetoes and fund transfers are to blame.

"The governor moved money out of accounts that you normally are not supposed to touch," said Rep. Kitty Rhoades, Hudson.

She added, "The past two years have been an incredible adventure into strange accounting procedures."

One administration official downplayed the problem saying it's been worse in other budgets.

"This is the lowest structural deficit since the 1997-99 budget," said Dave Schmiedicke, the state's budget director.

One of the hardest hit areas will be the state's transportation fund which is expected to see a $68 million shortfall by June 30, 2007.

In a separate report the LFB attributes the fund's deficit to high gas prices and state motorists conserving gas.

"The primary cause of the problem is consumption is down," Lang said.

The report also notes that vehicle fuel tax revenues will be down $31.2 million in 2005-06 and $38.8 million in 2006-07 because less gas being sold means less taxes being collected.

Another cause of the deficit was a transfer of $427 million from the transportation fund to the state's general fund by Doyle in order to increase education spending and to put money back into the medical assistance fund during the current biennial budget.

For Rhoades that transfer is of great concern considering the looming transportation upgrades needed in the region.

"My concern was when the money left the transportation account we would end up pitting one area of the state against the others for transportation funds," Rhoades said.

Another element causing the deficit is the cancellation of the annual gas tax index which automatically increased the state's gas tax according to inflation.

"The Wisconsin Department of Transportation is putting in place measures that will help cut this deficit while not impair current road construction," Schmiedicke said.

Some of these measures include not filling vacancies and pushing off construction projects into other fiscal years, according to the report by LFB.

Brady Bautch can be contacted at internet@rivertowns.net