Doyle says he won't raise taxes
7:29 PM 1/29/03
Judy Newman Business reporter

Gov. Jim Doyle drew warm applause from Wisconsin business leaders Wednesday as he pledged not to raise taxes and assured his support for a change in the way state businesses are taxed.

"Wisconsin should not be taxing job creation," the governor told the Business Day in Madison conference at Monona Terrace. But Doyle said a switch from the current system that bases corporate taxes on property, payroll and sales to a single factor - the sales tax - will have to wait until the current state budget woes are over.

Doyle said the emergency budget bill he will introduce today , cutting $161 million in state spending for the rest of the fiscal year, which ends June 30, will cause "serious and painful cuts."

But that's just a prelude to the biennial budget Doyle will propose Feb. 18. With an estimated $452 million hole in the current fiscal year's budget and a shortfall projected at up to $3.2 billion for the following biennium, the result will have to be "real downsizing in government, the likes of which we have never seen before in Wisconsin history," Doyle told the business group.

In the short term, the state will have to cut spending, he said, but the long-term solution is economic growth.

"If we can come through this without raising taxes, we will send an incredibly important signal to the rest of the country about the type of business climate we want in the state of Wisconsin," Doyle said, to strong applause.

Earlier in the day, state budget director David Riemer told the conference that just as businesses in Wisconsin have had to trim budgets and cut staff, so will the state. "Spending cuts are going to be very deep," Riemer said, resulting in "more layoffs than I think the state has ever seen.

"This is not going to be pleasant for anyone involved this ain't fun," he said.

Gov. Doyle told business leaders he is also committed to restoring state shared revenues to local governments to $1 billion a year. The Legislature used $600 million from the state's tobacco settlement to cover most of this year's allocation - but it's just a one-time fix.

"I'm looking for every penny I can find to restore that cut," Doyle said. "I believe strongly in shared revenue. What the citizens of the state want, basically, is good strong local services," such as police and fire protection, parks and roads.

By the same token, Doyle said he expects local governments to follow the state's lead and trim any excess spending so the burden is not transferred to local taxpayers. "I hope they'll help by getting through this without raising taxes," he said.

Business leaders were pleased. Jim Haney, Wisconsin Manufacturers and Commerce president, called Doyle's speech a "terrific message."

The statewide business association presented its own legislative agenda Thursday, calling for regulatory reform for industry, tax cuts, a cap on government spending, reform of the civil justice system and control on health care costs.