Doyle vetoes deepen state budget cuts

By Patrick Marley and Steven Walters
Milwaukee Journal Sentinel

Democratic Gov. Jim Doyle carved up a budget-repair deal with his veto pen today, allowing him to make deeper cuts than lawmakers approved and take money from the state’s transportation fund.

Lawmakers voted this week to make $69 million in cuts through mid-2009, but Doyle increased the cuts to $270 million with his veto powers. He also vetoed a restriction that limited how much could come from the state transportation fund.

Of that, state Budget Director Dave Schmiedicke said $103 million would come from the state transportation fund. But Doyle said his vetoes would still give transportation spending as much as it got in the two-year budget passed last October, because the Legislature this week voted to boost that spending by about $180 million.

No summer highway maintenance or construction contracts will be delayed as a result of his vetoes, Doyle said.

Legislators have long dueled with Doyle over how the transportation fund is used, saying the governor has hurt the integrity of the account by using it to help pay for schools.

The Democratic Senate and Republican Assembly passed a package this week to ease the state’s budget woes because tax collections are expected to be $652 million lower through mid-2009 than projected when the budget was passed in October.

Doyle had repeatedly told legislators he did not like major aspects of the bill, and he carried through with his warnings today.

Doyle vetoed a $125 million accounting move that legislators relied on that would have booked a payment to schools into the next fiscal year. Doyle said he would make cuts instead.

He also dialed down a plan by lawmakers to refinance the state’s settlement with the tobacco industry to get $209 million now at the expense of higher payments in the future. Doyle said he now hopes state government can get about $150 million from the refinancing deal, depending on its effective date and conditions in the bond market.

Doyle also left a bigger budget-ending emergency fund — about $100 million — than what lawmakers had called for. Under the Legislature's plan, the budget would have ended with a surplus of only $25 million — an amount the governor called dangerously low.

Doyle preserved all but $2 million of $22 million that was to be used to implement the federal Real ID act, which requires states to issue fraud-proof IDs. Lawmakers had voted to take all $22 million, which was raised with a $10 increase in driver's license fees that went into effect Jan. 1.

Doyle said he would keep an additional $18.6 million for child care subsidies in the bill that lawmakers gave him, but he left himself the flexibility to curb those subsidies in the future in case of shortfalls.

Doyle vetoed a property tax exemption for low-income housing included in the package because he said a full public debate was needed on the issue. Lawmakers have long disputed how to structure such an exemption, and some said the provision in the bill would have had the effect of making taxable property of what now is exempt.