Rep. Kerkman's Capitol Insight

Governor Doyle Signs 2009-2011 State Budget into Law

On Monday, Governor Jim Doyle signed into law the 2009-2011 State Budget, also known as Assembly Bill 75, after several months of late night and early morning debates, and behind-closed-doors negotiations from the Joint Finance Committee up through each house of the Legislature. The final votes were taken on the state budget late last week by the Senate and then the Assembly, following the recommendations announced by the Conference Committee. Comprised of members from both the Senate and the Assembly, the Conference Committee reviewed each house’s version of the budget before selecting which provisions should be included in the final document that was signed by the Governor.

I was pleased to learn that the Conference Committee chose not to include the provision granting driving cards to illegal aliens within the final version of the budget. For one thing, as I’ve said before, this is a policy issue that has nothing to do with our state budget; and for another, the government should not be rewarding illegal behavior. I am glad that on this issue, the Governor chose to put the safety of our legal, law-abiding residents ahead of those who chose to break our laws by coming here.

Despite my satisfaction with the outcome of the provision regarding driving cards for illegal aliens, I am still disappointed with a number of other items the Governor chose to keep in the state budget. In his veto message, Governor Doyle said, “This budget protects the middle class,” which I find to be a very misleading statement considering the negative impact his budget will actually have on the middle class in the long run. Here are a few of the items that deeply concern me:

• Rental car fee of $18.00 for the Southeastern Regional Transit Authority, including KRM: I fought hard to have this provision removed from the budget and replace it with a referendum for the voters of Kenosha, Racine and Milwaukee counties to approve. Unfortunately, rather than allowing the affected residents to decide how they want to spend their transportation dollars, the government will force them to pay a steep price every time they rent a car within these counties.

• Additional funding for subsidized childcare (for programs like Wisconsin Shares) in the amount of $67.8 million while providing only $900,000 in additional funding for oversight of how this money is managed: As a member of the Legislative Audit Committee that helped launch the investigation which uncovered the rampant fraud of the Wisconsin Shares program and abuse of taxpayer dollars, I am appalled by the Governor’s decision to commit even more funding for this failed program. Until the Legislative Audit Bureau completes the second phase of its investigation of Wisconsin Shares this fall and offers recommendations as to how future fraud can be deterred, we should not be increasing the amount of taxpayer dollars used for subsidized childcare in Wisconsin.

• In-State Tuition for Illegal Aliens: This is just another example of how we are encouraging and rewarding illegal behavior at the expense of legal residents. It is both wrong and unfair to the students from our neighboring states that choose to pursue their higher education in Wisconsin to continue paying out-of-state tuition while others who are not even here legally get the benefit of in-state tuition. I am also concerned that this will ultimately affect a legal student’s chances of being accepted by their first-choice school because of the competition they will face from illegal aliens and the demand for greater diversity on college campuses. Lastly, U.S. businesses are prohibited by federal law from hiring illegal aliens whether they have a college degree or not, so I do not see how our state will benefit from this in the long run.

• Reduction in the long-term capital gains exclusion from 60% to 30%: This measure could severely affect our business community, the engine of job growth in Wisconsin. With his budget, I believe the Governor is hindering the ability of business owners to reinvest in their companies and provide more jobs for our ever-growing unemployment pool by raising the tax on their capital gains. Here, the “Soak the Rich” mantra quickly becomes “Drench the Poor,” as the trickle down effect from higher taxes on business owners will ultimately affect the workers through wage and benefit cuts as well as layoffs. In addition to that, many retirees who depend on the capital gains earned through their mutual funds and other investments as a primary source of income could see their household budgets shrink.

• Property tax increase on homes valued at a minimum of $165,000: Under this provision, homeowners will see their property tax bill increase by $90 during the first year of the budget cycle, followed by a $130 increase in the second year. This makes no sense to me considering the sharp decline in home values and the ongoing struggle homeowners are facing as they fight to keep their homes.

These are just a few of the many provisions in the budget that I do not believe will benefit our great state in the near future. I find myself asking, how will these measures protect the middle class in the long run as Governor Doyle indicated? How do higher taxes, fewer jobs and wasteful spending benefit the average folks, especially during a recession? How is the 2009-2011 State Budget good for Wisconsin? Within time, we will see if the heavily partisan budget is enough to get Wisconsin’s economy back on track or if it completely derails.