Wisconsin is facing yet another difficult budget gap this year. A report released by the Department of Administration revealed that state agencies are looking to spend approximately $1.6 billion more than the state will reap in tax revenue.
This is to be expected. As health care and fuel costs increase, agencies need to spend more money to continue to run the programs that already exist. This causes problems for Gov. Jim Doyle, who won re-election in part because he touted his ability to balance a budget.
It is becoming apparent that while balanced on paper, the state finances are not in the best shape. There are two ways to balance a budget: raise taxes or cut government spending. Doyle refuses to raise taxes, so that leaves spending cuts as the only viable option.
Hopefully, Doyle won't revert to Option C, which he used to balance the budget last time. Option C entails taking money away from low profile parts of the budget to save emotional charged programs like, education.
This is precisely what Doyle did in 2005. He saved funding for K-12 education in the state by raiding the transportation budget. And while Doyle should be commended for adequately funding education, the state is now facing a crisis with the transportation budget.
The problem with Option C is that is does not actually reduce the amount of money being spent by the government, and it does not actually increase the amount of revenue the government takes in.
This sort of underhanded money shuffling is only a short-term solution to a long-term problem. Now the Motor Vehicles Division is trying to raise the license fee and auto registration fee to help cover the costs of maintaining the state highways.
Doyle balanced the budget two years ago without raising taxes—if you do not consider the increase license and registration fee a tax increase.
Moving money between agencies does not increase the state revenue or decrease the amount of money the state spends. And while the governor's hocus-pocus accounting looks good on paper, it will in the end come around to bite the state in the rear end.
Doyle needs to come up with a better solution for the budget gap and it seems as though an increase in taxes is that inevitable solution.
