- Associated Press - Wednesday, January 14, 2015

MADISON, Wis. (AP) - Gov. Scott Walker is expected to paint a grim picture when he delivers his plan in a few weeks for balancing the state budget, which would stand in sharp contrast to his upbeat State of the State speech.

Walker, in a brief State of the State address Tuesday that was long on Green Bay Packers references but short on those to the state’s troubled finances, is scheduled to release his budget to the Republican-controlled Legislature on Feb. 3.

“Last time we had money laying around to cut taxes by a couple billion dollars and were able to meet some people’s wish list of items,” Rep. John Nygren, one of the two Republican co-chairs of the Legislature’s budget committee, said Wednesday. “That doesn’t look like it’s going to happen this time.”

Just to continue with the current level of spending, the state would have to fill an $800 million budget hole. To fulfill state agencies’ wishes would increase that deficit to $2.2 billion. And that doesn’t take into account a shortfall in the roads budget, which the state Department of Transportation wants to plug with more than $750 million in tax increases.

Assembly Speaker Robin Vos said Tuesday that Republicans were “100 percent committed” to solving the budget problem without raising taxes. Walker even promised to cut property taxes, a pledge he slightly backed away from Tuesday by saying only that he wants them to be lower in four years than they are now.

All of the uncertainty has led to Statehouse speculation about what’s coming next month.

“It certainly appears at this point that this going to be a difficult budget,” said Republican Sen. Rob Cowles.

He questioned whether the budget can be balanced simply through cuts.

“Can you do that, just make really deep cuts?” Cowles said. “There’s going to be deep pain and implications. The question has to be asked, how far down are you going to drive the university? The same thing for local governments.”

When Walker came into office in 2011, the state faced a roughly $3 billion budget shortfall, which served as the motivation for his signature initiative - taking away collective bargaining from most public workers while requiring them to pay more for pension and health care benefits.

In that budget, Walker and the Legislature cut funding to public schools by $1.2 billion and to the University of Wisconsin System by $250 million, and they made other deep cuts across state government.

Walker was in budget-related meetings with staff and lawmakers on Wednesday and was not traveling around Wisconsin, as governors typically do after the State of the State speech.

One of the main reasons for the current budget problem are the $2 billion in tax cuts that Walker and the Republican-led Legislature have pushed through over the past four years. While property tax payers reaped the benefits with lower bills in December, the state lost out on that revenue. That, combined with increased costs like $760 million additional for Medicaid, is driving the looming shortfall.

The budget picture will come into clearer focus as soon as next week, when new tax collection estimates are released. An uptick in collections will help the bottom line, but a dip will only worsen the problem facing Walker and the legislative Republicans.

“I’m optimistic we can do whatever it takes to get this budget balanced,” said Republican Sen. Alberta Darling, co-chair of the budget committee.


Follow Scott Bauer on Twitter at https://twitter.com/sbauerAP

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