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Doyle: There's light ahead for Wis. economy
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MONROE - April's always a big month for tax collection in state government, and Gov. Jim Doyle saw numbers last April that surprised him.

Tax revenues had fallen off by 35 percent from April 2008, Doyle said, a drop that even in the midst of a deep national recession made him question whether the figures he was receiving were wrong.

"I checked with other states and found that we were about average" in the decline of revenues, Doyle said Tuesday morning during a visit with the editorial board of The Monroe Times.

Doyle visited the newspaper to talk about the recently-completed budget process and the current state of Wisconsin's economy, among other topics. He said the state's economy wasn't doing badly until September 2008. Since then, the governor said, his economic forecasters "have had a very hard time calculating" what will happen next.

"We're on our fourth set of projections now," Doyle said, which shows "how uncertain things are."

But Doyle felt confident enough in economic forecasts to predict a state turnaround is coming soon.

"It's probably the middle of 2010 before the numbers that matter most to people" - jobs and consumer spending - begin to return to levels they were at before the recession. "I hope it's quicker than that," he said.

Doyle pointed to a some recent encouraging signs of an approaching recovery. The monthly jump in state unemployment rates halted in May. The state rate dropped from 8.8 percent in April to 8.7 percent - though Green County's jobless percent increased from 9.3 percent to 9.4 percent during the same period. The governor also said auto sales are "picking up a little" and the real estate market is starting to move again.

"Just the feeling is important," Doyle said. "People are not as jittery as before."

But Doyle cautioned that it will not be until 2016 or 2017 until economic activity levels return to where they were before last September's crash.

"This isn't like we'll have two tough years and then somehow be back to where we were," Doyle said.

Doyle said he thinks there are some provisions in the biennial budget approved last month that will help speed up the state's economic recovery. He pointed to a 10 percent payroll tax credit for new jobs created, tax credits for companies that invest in research and development and tax incentives for companies to make capital investments that are included in the budget.

He also said the budget includes deep cuts in government services while "protecting the most important areas," including school funding and health care programs.

Republicans have been critical of the governor and the Democratic-controlled Legislature for passing a budget that spends more, raises taxes and puts off difficult fiscal decisions.

"Democrats ... chose to tax and spend their way to a budget solution," Rep. Brett Davis, R-Oregon, wrote in a guest opinion piece published in Tuesday's Times.

Davis said Doyle's budget actually raises taxes by $2 billion, increases spending by 6 percent, adds 100 government jobs and "does little to promote economic development and may actually lengthen our recession."

Doyle, however, is proud of the budget, which was passed before the July 1 beginning of the fiscal year for the first time since 1977. He also defended the inclusion of what critics have called policy items in the budget, including the removal of the qualified economic offer (QEO) provision in teacher-school district negotiations and raising limits on vehicle liability insurance.

"One person's policy item is another person's budget item," Doyle said.

The governor admitted some provisions could legitimately be seen more as policy measures than budgetary. He said that the number of policy decisions made in budgets have been greatly reduced during his gubernatorial tenure, but "at times you get pretty impatient with the legislative process" and push through "things you know people support."

He defended the budget approval process, which included a number of closed-door decision-making meetings of legislative committees. He said the news media did a good job of pointing out "what went into caucuses and what came out of caucuses." He did support the idea of requiring public disclosure of which legislators support particular budget provisions, similar to new reporting rules on federal earmarks.

The governor also defended the raising of the cap on tax revenue increases for Wisconsin municipalities from 2 percent to 3 percent for 2010. He said there had to be some legislative protection for local governments that will receive less state aid, but also "nothing says (municipalities) have got to go to that number."

He said Wisconsin city governments "have to get in the spirit" of making the kind of tough cuts that state government has.