Doyle, legislators to announce $600 million budget fix

Talk about it

Gov. Jim Doyle and legislative leaders will announce a plan today to cover an almost $600 million deficit in the current state budget.

The Joint Finance Committee is expected to act on the package next Monday. It will include both spending cuts and tax hikes to make sure the current budget is balanced by June 30. And it could be a preview of what will happen this summer, when Madison tries to make up for an expected $5.7 billion shortfall in the next two-year budget.

Media reports say today’s proposal will include the long-debated hospital tax, aimed at bringing in more federal Medicaid money.

It could also tax parent companies instead of their individual subsidiaries, thus ending the so-called “Las Vegas loophole.” That’s the practice of avoiding Wisconsin income taxes by claiming a subsidiary in tax-free Nevada.

There’s also talk of having a streamlined sales tax, making it more uniform with other states. It would make Internet shoppers pay Wisconsin sales taxes. And it would reverse a Supreme Court ruling that said the sales tax did not apply to customized business software.

Also, legislators would have a say in how the federal economic stimulus money is spent. And there could be more cuts in state spending, including job reductions.

But the governor has said he hopes to leave vacant positions open, rather than lay people off. Assembly Speaker Mike Sheridan, D-Janesville, says the plan will stimulate the economy.

Republicans and business leaders say new taxes will discourage the creation of new jobs, especially now.

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