CHICAGO -- Aides to Wisconsin Gov. Tommy Thompson said yesterday that disappointing revenue projections won't delay implementation of a law requiring the state to pick up two-thirds of education costs.
The Wisconsin legislature passed the education reform and property tax relief law last April. Lawmakers have determined that the state will have to raise about $1 billion to cover their share of education costs when the law takes effect in 1996.
Thompson won reelection last month after promising to abide by the new law without raising taxes. He has pledged to raise the money exclusively through state budget cuts and economic growth.
But Thompson got some troubling news last week. The Wisconsin Department of Revenue has projected revenue growth of $400 million for fiscal 1996, shy of the $500 million growth Thompson has frequently cited as a key component of his tax relief scheme.
And with a mere one-vote Republican majority in the Wisconsin Senate, Majority Leader Mike Ellis last week discussed postponing compliance with the property tax plan for a year.
The law increases the state's share of school funding to 66.5% from the current 48% at an additional annual cost of about $1 billion. If the state legislature does not approve a funding plan by Oct. 31, 1995, the law automatically limits a school district's levy to 10 mills starting in 1997.
"We're faced with hard choices," said Ellis' legislative aide Michael Boerger. "We either have to institute fairly dramatic budget cuts or tax increases. Some legislators don't have the stomach for budget cuts and others certainly don't want taxes. So Mike mentioned that another thing to look at would be to ease into the time frame where we have to pick up two-thirds of the education costs."
But Thompson aides say he's holding fast. "The governor has no plans to do that," said his press secretary, Kevin Keane. "He will absolutely deliver on the property tax relief in this budget."
How Thompson will deliver on his promise is a subject of much speculation. The governor campaigned on a platform of budget cuts and economic growth loosely outlined in a lengthy campaign memo.
Keane said the memo is still considered a "good working document" reflecting the governor's preliminary outline for his budget. The biennial budget covering fiscal years 1996 and 1997 will be delivered in February. Wisconsin's fiscal year begins July 1.
According to the memo, Thompson has ordered every state agency to submit budgets at 90% and 95% of their funding base for his review. The administration expects to achieve $330 million in savings over the next two years through across-the-board cuts.
Thompson officials may further cut the state's Medical Assistance Program and a prison work program, according to the memo. And they've already instituted a hiring freeze.
Though he has ruled out sales and income tax increases to bridge the gap, Keane said Thompson might consider expanding the sales tax base as "an absolute last resort." Wisconsin does not tax the sale of food, advertising, and other goods and services.
