Governor Doyle Gives Last State of the State Address
Despite Rosy Portrayal, New Revenue Numbers Show Economy is Worse
Tuesday night marked Governor Doyle's final State of the State Address. The last speech was really no different than most of his previous ones. He spoke of the economy, clean energy jobs, access to health care, taxes, and education.
The thing that surprised me was that he painted a much rosier picture of the state's economic condition than what it is in an attempt to define his legacy. He took credit for a few hundred jobs that were created in the private sectorwhile failing to take any of the blame for the jobs that were lost during the same time. Wisconsin has lost 163,000 jobs in the last year and he conveniently forgot to mention that.
Doyle was very quick to tout the strides he has made in Wisconsin healthcare, noting that we have the second highest percentage of people covered in the nation. What he did not mention is that we are second toMassachusetts, where they are revolting against their failed health care experiment. Covering a maximum amount of people is a laudable goal, but covering them by simply creating a government-run healthcare program is not the way to do it.
He also did not mention that the newest expansion to cover childless adults under Medicaid has experienced an unpredicted number of applicants, leading to waiting lists, and eventually cost overruns.
Finally, Governor Doyle again had the audacity to say that his budget protected the middle class from tax increases. It is his $5 billion in tax increases last year that is driving our economy, our unemployment rate, and our job loss into a continuing downward spiral.
In an effort to gloss over the fact that we have a bigger government than we can afford, Governor Doyle did make passing mention that we need to cut another $200 million. That is the only thing on which I can agree with the Governor.
I can also say that I am excited to not have to listen to another State of the State speech given by Jim Doyle. His misinterpretation of the condition of our state and his attempt to build a positive legacy as he has one foot out the door is enough to make anyone realize Wisconsin needs a change in leadership.
To watch my Youtube response to Doyle's speech, click here.
Revenue Projections Show More Trouble for State's Finances
The day after Governor Doyle's State of the State Address, the nonpartisan Legislative Fiscal Bureau released a memo predicting revenues to be down by about $300 million, decreasing the General Fund by about $219.5 million, leaving the balance $9 million lower than the statutorily required balance of $65 million.
The most significant revenue declines were $95 million less in cigarette taxes, $108 million less in sales taxes, and a $91 million loss due to the termination of the Minnesota-Wisconsin reciprocity tax agreement. Before termination, people who lived in one state and worked in the other were allowed to file taxes in their state of residence. The Minnesota and Wisconsin Departments of Revenue settled up more than a year later. Now those filers will have to file in both states. There are twice as many Wisconsinites who work in Minnesota than vice versa. The termination allows Governor Pawlenty to demand the $91 million payment immediately, rather than in the next biennium.
While the termination of the reciprocity agreement is unfortunate and unexpected, the declining tax revenues are the real issue here. Governor Doyle raised taxed by $5 billion in the last year and he still doesn't have enough to cover the hole. This is just further evidence that you can't raise taxes and expect the economy or the fiscal picture to get better.
Throwing money at it doesn't help either. Earlier this week, the Milwaukee Journal Sentinel ran an article reporting two thirds of economists don't believe that the stimulus has done anything to save or create jobs.
The only real answer to this fiscal predicament is to cut the size of state government. Unless we do, our deficit will keep spiraling out of control, requiring the need for even larger tax increases that people cannot afford.
State Representative Robin Vos State Capitol - Room 321 East - Post Office Box 8953 - Madison, Wisconsin 53708 Phone: (608) 266-9171 - Toll Free: (888) 534-0063 - Fax (608) 282-3663 Email: Rep.Vos@legis.wisconsin.gov On the Internet: Representative Vos' Web Site