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Lawmakers: Don't dig budget hole deeper, focus on jobs

While agreeing the state's economy is stumbling, some Republican legislators think Democratic Gov. Jim Doyle is overplaying Wisconsin's budget crisis and the tactics needed to survive it.

The much-publicized $5.4 billion anticipated deficit for the 2009-2011 biennial budget, which hasn't been introduced, reportedly includes agency requests for 8% spending hikes, said Rep. Kitty Rhoades, R-Hudson, Monday.

While the Legislature is already officially back in session, lawmakers have been told to expect their first business session will be Jan. 28, the same day Gov. Doyle delivers his State of the State address.

"That's the priority: The economy, the shortfall," said Sen. Sheila Harsdorf, R-River Falls, anticipating the Legislature's main focus this session.

But, she said, it's difficult for her to predict what will happen when.

"It's in the hands of the Democratic leadership," said Harsdorf. "They decide what comes to the floor."

As for the anticipated deficit in the next budget, "Part of that is a wish list," said Rhoades, who served on but is no longer a member of the Joint Committee on Finance.

Since the governor hasn't proposed a 2009-2011 budget, Republicans haven't had the chance to evaluate it.

But, said Rhoades, just recognizing that the budget is a two-year plan softens the blow.

"(The reported shortfall) is still a big number, but it's not $5.4 billion," she said.

"If you solve the 2009-2010 budget hole, you wipe out the budget hole in 2011," said Rhoades, saying that if the state balances its budget the first year of the biennial, it eliminates the problem the second year.

Rhoades said the only way to get control is to stop spending. She suggested going back to the last year when the state took in enough revenue to support its budget and working from there.

"We believe that that is the answer to the problem: Freeze it," said Rhoades.

"During the last budget cycle, we could see the economy was softening," said Rhoades, who opposed spending increases then.

"When Dad's going to be laid off, you don't go out and buy a new car," she said.

Two areas Rhoades mentioned where she believes spending could have been controlled are the Knowles-Nelson Stewardship Program and BadgerCare Plus.

"It's a good program, everybody loves it, but it's costing us money," said Rhoades of the Stewardship Program, which is intended to preserve natural areas and wildlife habitat.

"It's putting us in the hole," said Rhoades, explaining that the program is costing the state $52 million a year, $1 million a week, in interest.

She suggested the program not be expanded and that some of the property in it be sold and placed back on the property tax roles.

As for BadgerCare Plus, said Rhoades, legislators were told to expect an enrollment of 26,000, but state agencies immediately included thousands of people who were eligible, jumping that number to 46,000.

"We've never done 'eligibility equals enrollment' before," said Rhoades. "We went double what we were told it would be."

She said Senate Democrats haven't given up on Healthy Wisconsin, a statewide medical insurance plan that fell by the wayside last session amid fears of its cost to businesses and participants.

This time, said Rhoades, Democrats are saying they will give small businesses three years to phase in.

"I said that just gives small businesses three years to get out of the state," said Rhoades.

Doyle has said spending cuts will be his first choice as the state attempts to balance its budget, but there will also be tax hikes.

Increases being considered are expansion of the sales tax and a hospital tax -- increases that will cost everyone, said Rhoades.

Job creation and retention must be a priority, said Harsdorf.

"It's going to be very important for us to work together to focus on how we can grow our economy and focus on job creation," she said.

The federal government and the states must first get a handle on what needs to be done to put the economy on the road to recovery, said Harsdorf.

"We're facing an economy like we've never really seen before," she said. "It's an issue that we're dealing with at the state level as well as at the federal level."

At the state level, Wisconsin must focus on how jobs are created and on keeping existing jobs, said Harsdorf.

The state is anticipating a revenue gap of $386 million in the current state budget for the period that ends June 30.

Harsdorf said she doesn't know at this point if the governor and Legislature will deal with the current deficit separately or look at both deficits together.

The Legislature has two choices, said Rhoades. It could roll over the current biennial shortfall or introduce a separate budget repair bill.

"I'm assuming they probably aren't going to do that," she said of the second choice.