Gov. Jim Doyle said today that the impact of property tax increases in his proposed 2009-11 budget could be cut in half if school districts apply federal stimulus funds correctly.

Property taxes on the median valued home would increase $91, or 3.2 percent, in the first year and another $134, or 4.5 percent, in the second year according to Legislative Fiscal Bureau estimates released today.

"Those numbers will come down significantly if school districts take the federal stimulus money they have coming and don't spend it beyond the revenue limits," Doyle said. "I couldn't do this by law, I wish I could have to hold it under the revenue limits, but if they take the additional federal money they're getting and hold it under the revenue limits, you're dealing with numbers that are probably half of that.

"We really are out encouraging school districts to understand the federal money is one-time money, it would be very unwise for them to go out and spend it on new programs because in two years they're not going to have this money, but instead to keep it under the spending limits that are in place," Doyle said.

Doyle continued that compared to what's happening in other states with property tax rates, "we're really working hard to hold them in check."

Senate Minority Leader Scott Fitzgerald, R-Juneau, ripped Doyle for the property tax increase at a time when the median home value is estimated to decline by $6,800 over the next two years.

"It is irresponsible to raise taxes on families when our state is in one of the worst economic declines in decades and unemployment is increasing at an alarming rate each month," Fitzgerald said in a press release. "People shouldn't have to worry over whether they can afford to live in their own homes."

But Rep. Mark Pocan, the co-chair of the Joint Finance Committee, said Doyle's budget "goes to great lengths to minimize negative impacts on average working families."

"Some historical perspective may be helpful," Pocan said in a press release. "From 1998 through 2002 -- during the Thompson and McCallum administrations -- state taxpayers saw an average property tax increase of 4 percent. In some years, such as in 2001, the increase was as high as 10.5 percent.

"Today's Legislative Fiscal Bureau memo estimates that there could be an average, across-the-biennium property tax increase of 3.8 percent, depending on the actions of local governments. This would amount to about $100 dollars a year for the average household. This percentage is lower than during the Thompson/McCallum years," Pocan said.

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Reacting to the list of non-fiscal policy items in his budget proposal the LFB released yesterday, Doyle said the bureau has a "very, very tight standard" and that he has greatly reduced the number of those items in his budgets.

"Even if you were to accept that these are policy, you're talking about 10 percent or less of what used to be in the budget," he said.

Doyle said some examples of policy items the LFB listed, such as the QEO repeal and domestic partner benefits, do have fiscal impacts.

"You can't have it both ways," Doyle said of the QEO repeal. "On the one hand the school districts argue this is going to have huge effects on the budget, on the other hand they say this has no fiscal effect."

-- By Greg Bump