WisPolitics Budget Blog

The Legislative Fiscal Bureau has dropped revenue projections through mid-2011 by $342.4 million, largely due to lower than expected corporate tax collections.

Gov. Jim Doyle warned in last night's State of the State address that the budget deficit would grown beyond the $5.4 billion previously estimated after the latest revenue projections were completed. With the anticipated drop, it now pushes the state shortfall to more than $5.7 billion.

See the LFB memo.

U.S. Rep. Tammy Baldwin, who voted for the federal economic recovery package, said in a press release that the stimulus plan has close to $4.2 billion for the state of Wisconsin.

The bill passed the House last night after a lengthy debate. Wisconsin's delegation was split along party lines, with the five Dems voting for the package and three GOP members against. The bill now moves on to the Senate.

Here's how Baldwin, D-Madison, breaks it down:

Medicaid $1.06B

Fiscal Stabilization Fund $1.16B

Title I $180.7 M (Disadvantaged Students)

Individuals With Disabilities Act $231.7 M

Educational Technology State Grants $13.8M

Education, Modernization, Renovation and Repair $317.2 M

Pell Grants

$312.6 M available,
91,532 recipients,
$3,415 avg. award

Head Start $10M

Child Care & Community Development Block Grant $30.5M

Employment & Training $10M

Community Services Block Grant $12M

LIHEAP $34.7M

Elderly Nutrition Services $4M

Preventive Health & Health Services Block Grant $6M

Highways & Bridges $563.8M

Transit Capital $72.8M

Fixed Guideway Modernization $1.7M

Clean Water SRF $156.93M

Public Safety (not yet specified)

Public Housing (not yet specified)

The Joint Finance Committee will vote this morning on legislation that would allow the state to tap into federal funds to cover unemployment compensation claims.

The state expects its unemployment compensation fund to run dry next month, which allows it to apply for the federal funds. The Senate and Assembly have identical companion bills.

The committee is scheduled to vote at 10 a.m.

See the JFC agenda here.

See the bill summary here.

Update: The companion bills passed unanimously.

Gov. Jim Doyle said his State of the State address Wednesday will be a "sober talk" about the economic crisis facing Wisconsin.

"I'm going to lay out the situation that we're in. It is not going to be a time where there's going to be a whole lot of new proposals," Doyle said Friday in an interview with WisPolitics.com in advance of thes address. "But there are some really important ones that we need to continue and continue to build on."

Doyle, who talked in broad terms about the speech in the interview, said he'll also talk about the opportunities provided for Wisconsin by the federal recovery act.

"If we didn't have a new president and we didn't have a recovery act coming, it would be a pretty bleak world that we're looking into," Doyle said. "Now we're looking at a world that's very, very difficult, but in which there's some real hope."

The governor said work continues on a state stimulus package to coincide with the federal bill.

"To some degree we want to make sure that what we do in Wisconsin is consistent with what the federal government does," Doyle said. "You don't want to jump too early and find out what we've done is not aligned with the federal stimulus package."

Joint Finance Committee co-chair Mark Pocan said a collaborative effort between Assembly and Senate leaders and the governor's office has led to progress on the state stimulus package, but that some pieces of the package are still not in place.

"We've got a pretty broad consensus on themes, but the details are still being worked out," he said.

The package, however, will not be heavy on major tax initiatives, said Pocan, D-Madison.

"You're not going to see a whole lot of revenue uppers in it," he said. "The governor's never been a guy that says 'Let's just raise revenues.'"

Listen to the WisPolitics interview with Doyle here.

In an interview on "UpFront with Mike Gousha" this weekend, Doyle said his budget will include a proposal for a regional transit authority.

Watch "UpFront with Mike Gousha" here.

According to figures released today from the House Appropriations and Transportation and Infrastructure Committees, and the Center on Budget and Policy Priorities, Wisconsin could receive more than $3.2 billion from the American Economic Recovery and Reinvestment Act under the proposal before the U.S. House of Representatives.

The figure does not include the funding passed along to Wisconsin residents and businesses through the tax provisions approved this week by the Ways and Means Committee.

The numbers were furnished this afternoon by U.S. Rep. Ron Kind's congressional office. Kind also released this statement: "Every state in the nation is dealing
with the effects of the economic downturn. This funding will go a long way to creating jobs and long-term investment in Wisconsin that will save us money down the road."

See a full funding breakdown here.

Kind's office also provided other documents analyzing the funding:

13-page state-by-state breakdown from the House Appropriations committee

Estimated funding for school districts in Title I, Individuals with Disabilities Act, and Education Modernization, Renovation and Repair funding

Center on Budget and Policy Priorities breakdown of funding for food stamps, SSI, emergency shelters, and child tax credits

Byrne JAG program

Estimates of jobless workers benefiting from selected unemployment insurance provisions

Gov. Jim Doyle today announced the formation of a new office to help the state manage and quickly distribute federal cash expected to come from the $825 billion federal Recovery Act.

The Office of Recovery and Reinvestment will be housed in the Department of Administration and will pull employees from that department as well as the state departments of Transportation and Department of Natural Resources, Doyle said.

The office will be headed by Madison Gas and Electric CEO Gary Wolter, who will take on the job on a volunteer basis while retaining his position with the company. Alan Fish, UW-Madison's Associate Vice Chancellor of Facilities, Planning and Management, will serve as Wolter's deputy. He will not draw an additional state salary in the position, Doyle said. The budget for the office will come from existing agency budgets, he said.

The combination of Wolter's private sector experience and Fish's knowledge of state building and transportation programs made them a good team for the effort, Doyle said.

While the office will set up criteria for assessing projects, the final say will come from himself, DOA Secretary Mike Morgan and DOT Secretary Frank Busalacchi.

"We're the ultimate decision-makers," he said.

A main thrust of the office will be to analyze the federal stimulus package and figure out how the money will flow to the state, Doyle said. The office will also work to remove barriers to using the federal cash, such as suggesting changes in state regulations and laws to help move the funds along efficiently.

The office will also be a resource center to counties and local governments to identify funding availability for projects, and keeping the Legislature informed on the process, according to Doyle.

Doyle said barriers to using the federal funds have already been identified, and said let and challenge periods for state contracts bid for stimulus projects may be shortened.

"This is a big task ahead of us," Doyle said. "It is clear we are going to be very, very busy in the state of Wisconsin."

* Doyle said he expects the state's portion of the federal stimulus will be in the $2 billion range, but also said he is being "conservative" in his estimate.

An analysis of the package from the National Conference of State Legislatures released today estimated the amount Wisconsin could receive at more than $3.5 billion.

Doyle said the federal package will provide a "significant amount of money" to Wisconsin, but said how much the state gets could depend on how Wisconsin does in receiving some competitive grants.

Doyle said he wants to ensure that projects are spread throughout the state, and that Wisconsin residents are being employed with the stimulus funds.

See the press release of the announcement here.

Listen to Doyle's announcement here.

Listen to questions from reporters here.

A breakdown of the federal stimulus package by the National Conference of State Legislatures estimates Wisconsin could receive more than $3.4 billion from the legislation.

Michael Bird, NCSL's federal affairs counsel, said figures for some programs like Medicaid and energy programs are not complete, and changes to the bill could still come as it works its way through the House and Senate. But the allocations chart is the most complete look yet at which state programs will get what portion of the $825 billion stimulus package.

According to NCSL, the state will receive nearly $1.2 billion for fiscal stabilization. About $564 million will go to highways, $237 million for special education programs, and nearly $202 million for K-12 construction.

A preliminary analysis by the Center on Budget and Policy Priorities estimates Wisconsin will receive more than $1 billion in Medicaid assistance. See that analysis here.

Update: NCSL has issued a new chart that raises the amount the State of Wisconsin may receive to more than $3.5 billion.

See the NCSL allocations chart here.

As the state grapples with plans to resolve a $5.4 billion projected deficit, three GOP Assembly reps are resubmitting a proposal to take segregated fund transfers off the table for future budgetary needs.

Reps. Gary Tauchen of Bonduel, Pat Strachota of West Bend and Mark Gottlieb of Port Washington have introduced a constitutional amendment that would prohibit spending fund revenues that conflict with the specific purpose of that particular fund.

See the bill here.

Update: Nearly $1.7 billion has been transferred from segregated funds over the last three budgets to pay for state programs the money was not intended to support, according to an LFB memo.

See the LFB memo here.

The Republican Party of Wiscsonsin is blasting Gov. Jim Doyle for lobbying Congress to put cash for passenger rail in the federal stimulus package.

"Doyle wants to use "stimulus money" for pet projects in his transportation budget that will only add future spending to his already $5 billion hole," RPW executive director Mark Jefferson said in a press release. "If it's a bailout then call it a bailout. However, if it's an economic stimulus package, then use it to create jobs without adding spending to future budgets."

Doyle testified earlier today before the House Transportation and Infrastructure Committee on the need to boost rail funding. Listen to the testimony here.

Federal stimulus money should be used to improve local roads and highways in Milwaukee, not just the Interstate system, Milwaukee legislators wrote today in a letter to Gov. Jim Doyle.

The nine legislators, all Democrats, also stress the need for spending on "infrastructure that bolsters health care programs, courts, schools, unemployment compensation, income maintenance and other safety net servicses." Also needed is middle class tax relief, the legislators say.

See the letter here.

Gov. Jim Doyle focused on the need to improve passenger rail access in his testimony this morning before the House Transportation and Infrastructure Committee. Doyle called passenger rail "the missing link" in federal transportation policy.

Doyle said Wisconsin is one of 14 states that commit funds every year toward rail corridor services, particularly on the Hiawatha Line between Milwaukee and Chicago. Investment has also been ongoing on corridors that enhance existing Amtrak services, he said.

"I am pleased that there is money and a focus in the recovery legislation that is directed at Amtrak and for state investments in this system," he said. "This is a critical time to recognize the opportunity for expanding passenger rail services. States want to invest and with the opportunity to carry out their plans with a federal partner, we can lead the nation into a new era of passenger rail service."

Doyle also touted the long-term benefits of inner-city rail service, saying it will create new jobs and enhance property values. Wisconsin now has $137 million in projects with Canadian National Railroad that are ready to go within 90 days, he said.

Those projects will complete a major portion of the high-speed rail corridor between Milwaukee to Madison, and will also increase the frequency of rail trips between Milwaukee and Chicago, he said.

Doyle said work has been going on here for the last three to four weeks to "make sure we have the projects ready to go, that we have cleared out whatever excessive state hurdles may be in place, that we will collapse the time that it might normally take while protecting transparency and good competitive bidding processes."

Doyle said there has also been a study of labor ability and the capacity of the construction industry to make sure there are enough resources to get the projects underway quickly.

"We are your partners here in seeing whatever the dollar figure that's put out is put to use as quickly and effectively as possible," he said.

Listen to audio of the testimony here.

Gov. Jim Doyle is mixing in business while in Washington, D.C., for the Obama inauguration.

Doyle said today in a conference call with reporters that he will testify before the House Committee on Transportation and Infrastructure on Thursday morning. Doyle said his testimony will focus on rail needs in Wisconsin and the Midwest.

Doyle also said he plans to meet with members of Congress tomorrow about the federal recovery package under consideration in Congress. And he isn't going to be shy about demanding Wisconsin doesn't get overlooked in the federal stimulus package.

"We're going to do everything we can to make sure that we do get our fair share," he said.

The governor cited Wisconsin's "strong mebmers of Congress," especially House Appropriations Chairman Dave Obey, D-Wausau, as helping in that effort.

State budget director Dave Schmiedicke estimated that Wisconsin could be in line to receive $2.5 billion in federal stimulus money for education and medical assistance programs.

Schmiedicke also said that estimates show the state could receive $575 million for transportation and infrastructure projects.

Schmiedicke made the remarks at a Wisconsin Credit Union League meeting at the Monona Terrace this morning. He was joined at the forum by Rep. Mark Pocan, the co-chair of the Joint Finance Committee, and Todd Berry, president of the Wisconsin Taxpayers Alliance.

The estimates given by Schmiedicke were based on the $87 billion allocated for the Medicaid program and $79 billion for education in the proposal from the House of Representatives last week. Schmiedicke's estimate is based on population and income figures, and he said the state will likely receive about 1.7 percent of the funding for those programs.

Pocan, D-Madison, said the state faces a "dire situation" that is largely due to the faltering federal economy. Schmiedicke said the federal economy had a "meltdown" in October and November.

Schmiedicke said the federal government will play a vital role in sustaining health care program levels and education funding in the state in the upcoming budget. In the absence of federal money, Schmiedicke said the state is "looking at dramatic cuts," and that cuts will be necessary even with federal help.

Pocan warned that federal stimulus money the state receives won't provide "dollar-for-dollar" relief to the state deficit, noting that much of the money is meant to stimulate the economy through job creation programs.

"Not everything we get from the feds is coming off the state budget," he said.

Berry said he is concerned that the state will use the federal stimulus money the way the transportation and injured patients and families compensation fund have been used, "one-time pots of money to pay for permanent programs." He said that approach would only make the state's fiscal problems worse in the future.

But Berry allowed, for the state economy "the worst case scenario is the status quo."

With the state having faced structural deficits going into the last two budgets, Pocan said "the low hanging fruit is gone" when it comes to cuts, and even with an infusion of federal cash the current deficit will be made up with "very serious cuts."

"If we don't get creative that means cuts to education and cuts to health care," Pocan said.

Pocan said the state stimulus plan will include "tax fairness" provisions, and that some "special interests" haven't been paying their fair share in the last decade. The goal is to pass the state stimulus by mid-February, Pocan said.

"We have done a lot of things for special interests that have been bad for Wisconsin," he said. "Some people have unduly benefited in the last decade-plus."

Schmiedicke said a portion of the state stimulus plan will be focused on "targeted tax credits" to stimulate job creation.

Pocan said the goal with the tax fairness initiatives is to raise revenues without hurting working families. Pocan also said while nothing can be ruled out on the revenue side, "The goal is not to do across-the-board general tax increases."

Following the introduction of the budget by Gov. Jim Doyle, which is slated for the first week in February, Pocan said he hopes the Legislative Fiscal Bureau will finish their analysis in two-and-a-half weeks. Following a series of public hearings throughout the state, Pocan said the JFC will deliberate six to eight weeks, and then send it to the full Legislature by the end of May. That would give the Legislature and the governor a full month to finish the budget by the end of the fiscal year on June 30, he said.

"We want to get the budget done on time," he said.

State sales tax collections for the month of December 2008 fell 3.8 percent, or nearly $12 million, over the the same month last year, according to data released today by the Department of Revenue.

For the year-to-date, sales tax is down 2.2 percent over the previous year.

Overall GPR collections for December fell 7.4 percent, but year to date collections are up about $45 million, or 0.8 percent.

See more data from Revenue here.

JFC co-chair Mark Pocan says the state medical assistance programs will benefit more if the federal government divides stimulus money by population than by other factors.

The $825 billion House stimulus bill, unveiled yesterday, includes about $87 billion to help states with Medicaid funding. Pocan said how it’s split could mean a difference of the state receiving $450 million or $1.5 billion from the feds for the program in Wisconsin.

"Depending on how they divvy it up, we could do really well or just kind of OK," said Rep. Pocan, D-Madison.

"If they do it by population, Wisconsin would do well," but the state wouldn't do as well if it’s decided by other factors like unemployment rates, he said.

"We hope they will do things as equally as possible," he said.

Assembly Minority Leader Jeff Fitzgerald, R-Horicon, says he is troubled by the amount of spending in the plan that seems to merely increase government spending.

"The federal government will spend this new money, this is a certainty. It was my understanding, however, that an economic stimulus package was supposed to fuel growth in the economy, inject cash into the credit markets and incentivize companies, large and small, to create jobs," Fitzgerald said in a statement.

"After reading through the Democrats' proposal in the U.S. House, it is clear that significant portions of this money do not meet those conditions. For instance, is it appropriate for an economic stimulus package to spend an additional $1 billion for the next census? How many private-sector jobs does $400 million upgrade to the Social Security software system create if federal employees will do the work?"

Pocan said plan could be a big boost for the state economy if it House plan moves through unaltered, Pocan said.

"It looks like the potential is there for a lot of money to provide economic stimulus in Wisconsin," he said.

Pocan said there are state staff focused on how best to utilize the federal dollars even as work continues on the 2009-11 state budget and a state stimulus package to help balance this fiscal year's budget. The state is facing a $5.4 billion deficit over the next through June 2011, including about $380 million in this fiscal year.

Pocan said the state stimulus package will consist of four categories: revenue enhancers, job creation, program cuts to balance the budget in this biennium, and getting the state set up to quickly and efficiently use federal stimulus cash.

The U.S. House of Representatives today released a draft of the economic stimulus package.

The summaries of the bill do not include a state-by-state analysis of the impact of the package.

See a summary of the House Recovery Act here.

See the bill text here.

See the report on the bill here.

See a press release from U.S. Rep. Dave Obey, chairman of the House Appropriations Commitee, here.

Gov. Jim Doyle said today that his early read on the U.S. House of Representatives' proposal for a federal economic stimulus package the bill is one "that Wisconsin is really well-positioned to benefit from."

Doyle, speaking with reporters after addressing a Wisconsin Bankers Association's luncheon at the Monona Terrace in Madison, said a state stimulus package should include provisions to take full advantage of the federal cash.

"We really have to make sure that what we have in there is everything we need in state law to take full advantage of the (federal) stimulus package and what's coming to the state," Doyle said.

Doyle said he would like to see the hospital assessment in the state package and his oil franchise fee proposal.

"Better to get it started earlier rather than later," he said, but added he will "be sensitive" to whether lawmakers want to include it as part of a stimulus plan or in the 2009-11 budget.

On the hospital assessment, Doyle said if it's done quickly it can be made retroactive to capture more federal dollars.

*Doyle warned that state employees may not get a raise this budget cycle.

"I think everybody looking at the world and the economy right now shouldn't be expecting a pay raise in the next couple of years," Doyle said.

*He also said he'd like to keep school funding at least level, but said K-12 school funding will be "part of the answer to this (deficit)."

Doyle said he won't allow schools to be cut in a way that causes "long-term harm." But he said "getting held even is the new increase in this budget."

"I'm willing to make hard decisions in other things to make sure we protect education," he said.

"The schools are going to have to be part of the answer to this," he said. "The schools are the number one item in the state budget and given what we're dealing with everybody's going to have to deal with it."

A hospital assessment proposal unveiled today by the Department of Health Services would bring in $1.65 in federal money for every $1 taken from state hospitals, according to a press release.

The DHS says under the plan the state will receive an additional $300 million in each year. The number is higher than previous proposals because of an increase in the assessment on hospital revenues. The previous proposal, which was pulled from the state budget by Assembly Republicans, assessed hospitals at a rate of .08 percent of gross revenues. The new proposal has an assessment rate of 1.4 percent of gross revenues, according to DHS spokesman Seth Boffeli.

According to DHS, the plan would:

* Invest approximately $240 million into the Medicaid program over three years.

* Raise the hospital Medicaid rates to almost triple the average Fee-For-Service outpatient visit rate.

* Raise inpatient rates by an average of 32% per discharge.

The federal money would also be used to fund statewide implementation of the BadgerCare Plus Core Plan for Childless Adults.

The Wisconsin Hospital Association applauded the proposal in a press release.

Kenosha County Executive Jim Kreuser released a statement today saying he's ready to take federal stimulus money that Milwaukee County Executive Scott Walker "doesn't want."

Democrats and unions have been pummeling Walker for statements he's made saying Milwaukee County will not be submitting requests for projects to be included in the federal stimulus package.

"I want to make clear to the world that most elected leaders in our region are in favor of creating jobs," Kreuser, the former Assembly Minority Leader said. "We all hope Walker's inexplicable stance doesn't make businesses think twice about adding jobs in our region."

Walker released a statement today saying taxpayers "need a real economic stimulus, not higher taxes."

"'Free money' from the federal government is rarely free," said Walker. "In fact, most transportation grants require a 20%, or greater, match from the local government. 'Free money' sounds nice until you read the fine print and realize local taxpayers may be forced to pay for a local match that they can not afford with higher taxes."

A new coalition headed by Midwest Environmental Advocates and Citizen Action of Wisconsin is urging state and federal leaders to invest billions in federal stimulus money toward "green" economic recovery projects.

The group, Coalition for Wisconsin's Green Economy, held a press conference this morning in the Capitol to outline its "Blueprint for Wisconsin's Green Economy," which lists more than $2 billion in environmentally-friendly infrastructure projects that the group argues will create about 30,000 new jobs.

"We're at a critical point where we can jump start our economy with targeted investments that build Wisconsin's 21st Century green economy," Madison Mayor Dave Cieslewicz said in a statement. He advocated, in particular, spending on mass transit projects, which accounted for a large segment of the infrastructure proposals.

Among the projects listed in the blueprint are the KRM commuter line and Chicago-Milwaukee-Madison high-speed rail line, as well as improved buses and terminals in Milwaukee. The plan also suggests improvements to Milwaukee's sewer systems, and hundreds of millions in public and private renewable energy projects.

"With clean air, fresh water, reduced poverty, green manufacturing, and green education, Wisconsin will emerge as a sign of hope for a secure and sustainable green economy," the report says.

*See the press release here.
*Read the Blueprint for Wisconsin's Green Economy.

Wisconsin Gov. Jim Doyle, a Democrat, and Minnesota Gov. Tim Pawlenty, a Republican, are ordering their state agencies to work together to find areas where the two states can combine services and procurement.

"The people of our states are used to seeing neighbors cooperate to get through challenging times," Doyle said in a press release. "This is a common sense way to cut government spending while protecting essential services during a tough economic time for our country."

The governors announced the plan this morning at a news conference in St. Paul. Another press conference is set for 1:30 p.m. in Madison.

The states will work together to purchase items such as road salt, heavy equipment, institutional food and softward in bulk. Wisconsin and Minnesota will also examine their fixed assets to determined whether resources can be shared.

As an example, the press release says that Wisconsin's DNR may rent helicopter service from Minnesota to save Wisconsin money and generate revenue for Minnesota.

The two states will also look to consolidate functions, such as nursery and hatchery operations, call centers, licensing functions and Duluth-Superior operations.

Gov. Jim Doyle said Monday that federal and state stimulus plans presented an opportunity for the state to do some "really big things."

Doyle said he believes there is strong support in the incoming Obama administration and Congress for broadly defining what constitutes infrastructure in a possible federal stimulus package to include rail, airport, harbor and other improvements.

"This is an opportunity for us to do some really big things," Doyle said, and listed projects such as the KRM commuter rail line, a possible high-speed rail line throughout the Midwest, and a "smart" electrical grid system.

"I'm actually really looking forward to this year," Doyle said, "because I think that despite these enormous challenges, this opportunity that we have is not an opportunity that comes along very often, and it may not come along in another generation, of really doing some major things in Wisconsin to improve this state and really get our economy moving again."

In the wake of Quad/Graphics announcement that it would cut 550 jobs (with 400 of those being in Wisconsin), Doyle said he expects more layoffs in other companies going forward. What concerns him is seeing companies that were recently planning expansions now pulling back.

"Quad/Graphics is a great example of a company that's been expanding; it has had good expansion plans and good growth plans," Doyle said. "And now because of where the economy's gone they've had to make some really difficult adjustments."

Quad/Graphics executives spoke with Doyle Friday about the company's plans and said they believe the company is strong and will be in a good position when the economy rebounds.

Read more from Doyle here.

Listen to audio of the event here.

State employees shouldn't expect a raise over the next two years, state grants will shrink and most state agencies should expect no increases in their budgets and even a possible cut, Gov. Jim Doyle told business and investment leaders at an economic forum in Milwaukee today.

While there are some areas that can't be held flat, Doyle said that for most departments, "I'm telling everybody if you come out of this where you were two years ago, you should be very, very happy."

Doyle said that even areas he wants to protect, such as K-12 and higher education, medical expenses programs, corrections, and funding for local fire and police, can expect flat or reduced budgets.

"All of those are going to see, if nothing else, held even, or some cuts; everybody's going to have to tighten their belts," Doyle said. "Even those areas where we have to protect priorities are not going to come out unscathed."

Dane County Executive Kathy Falk sent a short list of budget recommendations to Gov. Jim Doyle which include alcohol policy changes and the establishment of regional transit authorities.

See Falk's letter to Doyle here.

Milwaukee County Board Chairman Lee Holloway says he will put together his own list of projects for the proposed federal stimulus package, citing an "absence of leadership" from Milwaukee County Executive Scott Walker.

Holloway says he'll have his wishlist of capital and infrastructure improvements together by next Thursday for consideration. He has been working with Gov. Jim Doyle "to ensure that Milwaukee County submits a list of projects to stimulate our local economy," he said.

Walker told WisPolitics in a December interview he would not lobby in Washington, D.C. for a piece of the federal stimulus package.

"This is a bigger issue than just Scott Walker," Holloway said in a press release. "This is an attempt by the incoming Presidential administration to get our entire nation moving again. I do not want to see 71 other counties in Wisconsin and 49 other states receive stimulus funding while Milwaukee County is left behind.”

U.S. Rep. Dave Obey, D-Wausau, said Congress is shooting for the middle of next month to deliver a stimulus package to President-elect Barack Obama.

Obama had asked Congress to have a bill ready for him to sign by his inauguration on Jan. 20. Obey, the chairman of the House Appropriations Committee, said that's not going to happen.

"There isn't a chance of a snowball in you know where that this can be done by January 20th," Obey said today in a conference call with reporters. "It is far too complicated."

Obey added the mid-February target is "very hard to do as well."

The timing of the federal package is crucial to the state budget as Gov. Jim Doyle and legislators wait to see what aid will come to help address Wisconsin's projected $5.4 billion budget deficit. Doyle is supposed to turn in his budget proposal to the Legislature by Feb. 10.

Obey said the goal is to get money in the pockets of consumers, and said he is "certainly in support" of middle class tax credits in the Obama plan, which some Democrats have criticized. A "significant piece" of the package will be tax cuts, he said.

He said he favors giving cash to consumers to restore confidence rather than business.

"Right now our problem isn't that we don't have enough production capacity in the country. Our problem is that we don't have enough confidence on the part of consumers so they will go out and purchase what's already being manufactured in teh economy," he said. "So I want whatever tax cuts are in the package to be on the task of improving public confidence and expanding consumer purchasing power."

Obey said the progress of the package has been slowed because Obama still does not have access to the "levers of government."

The veteran Dem strongly reiterated his intention to keep the stimulus bill earmark-free. He is adhering to that restriction himself, he said.

"I'm not looking at this frankly in terms of what goodies it can provide for my or any other district," Obey said. "I'm primarily interested in where we can put the money that will create the largest number of jobs per dollar and will have the best impact in terms of long-term making the economy more efficient."

Obey said he has fielded dozens of calls from people asking if the federal stimulus is a chance for them to move their projects forward. He said there are many "wild assumptions" about what the package might do, saying it will not be a "miracle worker."

"What people need to understand this is not the time for them to be lining up at the goodies bar asking, 'What's in it for us?'" he said.

The package so far focuses on a number of job-building and infrastructure areas, including for transportation projects, water and sewer development in local communities, funding to local school districts to modernize classrooms modernizing of federal buildings, funding for maintenance backlogs in national parks and forests, and looking at trying to provide states with significant help to pay their bills in the medical assistance area, Obey said.

He said the plan will also have a "healthy" audit and oversight component. The overall size of the package, though, has not been determined, Obey said.

Administration Secretary Mike Morgan sent a letter this week to a handful of state agencies this week informing them that a number of programs and grants could be cut to save $25 million in this fiscal year. The state is facing a projected $386 million deficit by June 30, the end of this fiscal year, and a $5.4 billion projected deficit through June 2011.

The cuts would need the approval of the Legislature.

The agencies affected by the potential cuts are: DATCP, Commerce, the Governor's Office, Health Services, Natural Resources, the Public Service Commission, Transportation, the UW System and the Wisconsin Technical College System.

Among the programs listed are: Aids to county fairs, grazing lands conservation, clean sweep grants, grants and loans to minority business projects, community-based economic development programs, rural economic development, energy independence grants, brownfields grants, literacy improvement aids, poison control, tobacco use control grants, and cancer control and prevention grants.

"These reductions will not be easy to make and come at he halfway point of the fiscal year," Morgan's letter says. "In order to provide as much lead time to plan, state agencies should notify current and potential grant recipients of these potential reductions."

See the letter here.

Gov. Jim Doyle said today that Wisconsin's piece of the federal stimulus pie could be about 2 percent.

Some reports have placed the stimulus package as anywhere from $300 billion to $1 trillion.

Doyle based his estimate on Wisconsin's size in relation to the other 50 states, and included the caveat that the funds may come through different components or formulas.

The governor was at George Mason University in Virginia today to hear President-elect Barack Obama's speech outlining his stimulus package. Doyle called it "a very bold plan," and said it is "very important" that states "are fully behind this effort, that we have the projects ready to go that can get people to work."

Doyle said he also supports the concept of a state stimulus plan to coincide with the federal package, and is talking with legislators about what the package would look like.

"The real main goal is we are lined up right with the federal recovery act," he said.

Requests from local municipalities and counties for projects eligible for the federal money are "coming in fast and furious," Doyle said. He also said it is curious that Milwaukee County Executive Scott Walker has come out against using federal stimulus cash for his county.

"It seems a little unusual there would be one county in the United States that wouldn't be participate in it," he said.

The timing of passage by Congress of the federal stimulus plan could delay the unveiling of the state budget, Doyle said. This week, legislators approved moving the deadline for the governor's budget delivery from the statutorily-required date of the last Tuesday in January to Feb. 10.

Doyle said he hoped by early February states will have a good idea of what will be in the federal package, but if not he will proceed to put together a budget "as if we're not getting the federal money until we know otherwise."

UPDATE: WisconsinEye has audio of the conference call available here.

President-elect Barack Obama this morning provided broad outlines of his stimulus package proposal, saying the proposal will provide "help "struggling states avoid harmful budget cuts as long as they take responsibility and use the money to help maintain essential services like police, fire, education and health care."

Obama also said the package, which he dubbed "The American Recovery and Reinvestment Plan," will include a $1,000 tax cut for 95 percent of working families, and extend unemployment insurance and health care benefits for unemployed workers.

Among the initiatives, the plan will create or save 3 million jobs over the next three years, double the production of alternative energy over that span, and require that in five years all medical records be computerized, Obama said.

The president-elect urged Congress to act in the next few weeks, saying with each additional day the economic crisis deepens.

See a transcript of Obama's speech here.

Gov. Jim Doyle attended the speech and will hold a conference call with reporters at noon. Check back later for updates.

Senate Majority Leader Russ Decker, D-Weston, said Monday his first priority for the new legislative session will be passing an economic stimulus package for the state that emphasizes building roads and bridges.

And new Assembly Speaker Mike Sheridan said his top issues for the upcoming session are "jobs, jobs, jobs."

"After that it's the economy," said Sheridan, D-Janesville.

Decker said the budget should take a back seat to economic stimulus.

"The big thing that's going to dominate everything around here is going to be our economic stimulus package," Decker said of the first month of the session. "The budget probably should be later on."

Senate Minority Leader Scott Fitzgerald, R-Juneau, said his party stands ready to assist majority Democrats in alleviating the state's "unprecedented budget deficit."

Fitzgerald said he hoped Dems would reach out to his party, adding that both sides agree on many of the problems facing the state, including the need to mitigate the high tax burden, rebuild the economy, and reform health care and education.

Still, Fitzgerald said differences remain on how best to solve those issues.

"We cannot and will not shy away from discussing those issues," Fitzgerald said. "Increasing taxes, any taxes, will only make the burden higher."

Before the session, new Assistant Minority Leader Glenn Grothman, R-West Bend, issued a statement criticizing Gov. Jim Doyle for seeking federal aid to help balance the budget.

"We do not need more stimuli from irresponsible congressmen and presidents," Grothman said.

See the Grothman press release here.

Decker said the package would likely correspond with a federal stimulus package for states. He said closing corporate loopholes to pay for infrastructure would create jobs immediately and criticized remarks from Senate GOP leadership that ruled out tax increases and federal help.

"If someone has a way to cut $5.4 billion out of the state budget, they ought to be rolling out those plans," Decker said.

Decker expressed hope that a federal package would prevent a need for tax increases.

"If Barack Obama and (U.S. Rep. Dave) Obey and those folks do what we ask them, that certainly would be the preferred way," Decker said. "But that'd be a big load for them to lift as well."

*Listen to Decker's comments here.

Sheridan said legislative leaders, including he and Joint Finance Committee co-chairs, have been meeting with Gov. Jim Doyle's staff to "try and figure out what (the governor's) budget is going to look like."

"It's a little bit different than what we've done historically when we've got the governor who puts a package together and then he sends it to our bodies and then we dissect it and make those changes. We're going to try and have a package that's all-inclusive right from the start," Sheridan said. "I think that way we can do it a lot quicker."

Listen to Sheridan's comments here.

A group of five governors, including Wisconsin's Jim Doyle, called Friday for the federal government to deliver a $1 trillion aid package to the states over the next two years to help them get through soaring budget deficits due to a faltering national economy.

The Dem governors -- Doyle, Jon Corzine of New Jersey, David Paterson of New York, Deval Patrick of Massachusetts and Ted Strickland of Ohio -- said they would still face budget cuts even with an aid package of that size. But the package was needed to ensure the reductions they have to make don't undercut the federal government's efforts to jump start the economy.

It wouldn't make sense to build new schools at the same time states were laying off teachers, Strickland said. The Ohio governor added that even if he kept government spending flat in the next budget, the state's shortfall would still hit $7.3 billion.

"We aren't crying wolf," he said.

The group said it has been in discussions with the incoming Obama administration and congressional leaders about its wishes and hoped to set some parameters for the $1 trillion package. The governors' wish list included:

*$250 billion for education grants, from preschool through college.

*$250 billion for programs like food stamps, assistance for needy families and state unemployment trust funds, many of which are near depletion.

*$350 billion for infrastructure, including roads, trains, bridges, broadband, public housing and electronic medical records.

*The rest -- $150 billion -- going to middle-class tax cuts.

Doyle said it would be a tragedy for the country to complete its economic recovery in four or five years only to look back and see a severely damaged educational system. The $250 billion for education over the next two years would go to states with assurances that it would help maintain education at 2006 levels.

"It would be a terrible disaster for this country to see our education system move backward," Doyle said.

Key state indicators show the Wisconsin economy has entered a recession, according to the quarterly Wisconsin Economic Outlook released today by the Department of Revenue.

The DOR's press release also says total state employment is expected to show a 0.6 percent decrease in 2008 and a 2.2 percent drop in 2009, with recovery beginning toward 2010. Personal income growth, which had grown steadily over the last three years, is expected to stall in 2009.

• See the DOR release
• See the executive summary

Looking at the state's housing market, the report says Wisconsin has not yet reached its bottom, although the impact of the real estate bubble isn't as severe in the state because it never saw the "exorbitant growth" seen in other parts of the country.

Existing home sales in the third quarter of 2008 fell nearly 17 percent compared to the previous year and building permits are expected to fall to a low in early 2009.