It took 18 weeks of secret negotiations and four iterations of the state budget before Senate and Assembly Democrats sent Governor Doyle their final version of the spending plan.  The assorted budgets reveal that most of the Democrats’ disagreements were centered on non-fiscal policy initiatives that are completely unrelated to the state’s finances and out of place in this debate.

The Democrats were in alarming harmony when it came to record tax and fee hikes, unprecedented borrowing and massive spending increases.  Despite all of the amendments, press releases and Legislative Fiscal Bureau (LFB) memos, the unfortunate reality is that Democrat lawmakers simply played around the edges.  In the end, they asked Governor Doyle to sign a budget that is frighteningly similar to the one he proposed in February.

New State Taxes and Fees Approved Since February (Budget Bill and Budget Adjustment Bill): $3,143,175,200

Budget Bill (Enacted June 29, 2009) Tax and Fee Increases: $1,921,333,300

I previously made a list of taxes and fees that rest squarely on the shoulders of middle class families, exposing the Democrats’ bogus claim that 99% of Wisconsin taxpayers won’t pay more under their plan.  Following is a complete list of the taxes raised Governor Doyle and the Democrats.

• New Income Tax Bracket (Individuals earning $150,000 and couples earning $300,000)
• Capital Gains Tax Increase
• Delay Deduction for Health Insurance Premiums
• Delay Deduction for Child Care Expenses
• Eliminate Tax Deduction for Domestic Production
• Increase Corporate Income Tax (Throwback Sales)
• Increase Cigarette Tax
• Increase Tobacco Products Tax
• Increase Hospital Tax
• Increase Tax on Ambulatory Surgery Centers
• Increase Nursing Home Bed Tax
• Delay Tax Credit for Conversion to Electronic Medical Records
• Delay Tax Credit for Community Rehabilitation Program
• Delay Biodiesel Fuel Production Tax Credit
• Reduce Film Tax Credit
• Increase Sales Tax on Businesses (Sales Tax Treatment of Disregarded Entities)
• Delay Sales Tax Exemption for Alternative Energy Resources
• Reduce Farmland Tax Credit

The Democrats approved 53 separate fee increases totaling $767,755,300.  Below is a partial list of the fees that will affect many of our families.  The remainder can be viewed in this LFB memo.

• Create Police and Fire Protection Fee - A deceptively political name since the money is not paid to either police or fire departments. (Assessed on all phone lines.)
• Increase Low-Income Assistance Fee (Assessed on all utility bills.)
• Increase Work Permit Fee for Teenagers
• Increase Child Care Licensing Fees
• Increase Birth, Death and Marriage Certificate Fees
• Increase Boat Registration Fee
• Increase Handgun Record Check Fee
• Increase Securities Trading Fees
• Increase Increased Assisted Living Facilities Licensing Fees
• Increase Insurance Agent Appointment Fees
• Increase Bobcat Hunting Permit Fee
• Increase Elk Hunting Permit Fee (Wisconsin does not have an elk hunting season.)
• Increase Solid Waste Tipping (Garbage) Fee

Budget Adjustment Bill (Enacted February 19, 2009) Tax and Fee Increases: $1,221,841,900

Governor Doyle and the Democrats approved the following tax increases before budget deliberations even began.  Their budget balancing strategy was no secret.  It relied almost exclusively on taxing more to plug holes caused by the economic downturn.

• Increase Corporate Income Taxes (Combined Reporting):  $215,000,000
• Create iPod Tax (Tax digital downloads including ring tones, books, movies.): $10,980,000
• Create Custom Computer Software Tax: $66,000,000
• Adopt Streamlined Sales Tax (Change definitions what’s taxable.): $4,700,000
• Create a Hospital Tax: $925,161,900

Property Tax Increase: $309 per median-valued home of approximately $166,000 and $1,504,500,000 statewide

New Spending: $3,633,300,000 for a total of $62,192,100,000 and a 6.2% increase over the 2007-09 budget

Structural Deficit to Begin the Next Budget Period (2011-2013): $2,049,000,000

Federal Stimulus Dollars Spent: $3,452,277,000.

Of that total, $2,223,317,900 was used to plug a portion of the state’s budget shortfall.  Using this one-time money to pay for permanent state commitments contributes to the looming $2 billion deficit.

New Bonding: $3,581,172,100.

In last week’s e-update, I analyzed what this means for state taxpayers.