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Budget could put state in bind in future years

By GENE KEMMETER
of The Gazette
Wisconsin's 2001-2003 budget could put the state in a bind in the future, the state's secretary of revenue says.

Richard G. Chandler was in Stevens Point Wednesday, Sept. 26, and talked with a number of Portage County business leaders about financial issues and other matters.

A national study of state budgets by Iris J. Lav, deputy director of the Center on Budget and Policy Priorities in Washington, D.C., said Wisconsin may have the worst state budget mess.

State elected officials were criticized in the study for selling off decades of payments from tobacco manufacturers to pay for operating expenses in the budget.

The study also criticized the state for the lack of a "rainy day fund" for emergencies, providing so much funding to local governments and depending more on manufacturing jobs than the nation does.

Chandler agreed with the assessment, saying the state's stabilization fund is only 1.2 percent of the budget when bond-rating firms say it should be about 7 percent.

The state Legislature has been pushing off payments to the future for several years, he said. "It's those kinds of things the governor has taken some stands on to put the budget on solid footing."

The state's bond rating has slipped from AA-plus to AA, but Chandler said he feels the change may be due more to the overall economy than the budget itself, although bond raters said the state needs to fix basic budget issues.

The state budget was signed about four weeks ago, and Chandler said the budget process didn't go as bad as the last several times, although the next budget will be a challenge.

Tax reductions were kept, he said, and state taxpayers paid about 10 percent less in 2000 than they did in 1999 and should pay about 13 percent less in 2001 than they did in 1999.

Spending controls enable the tax reductions to continue, he said, and there are a number of things in the budget to promote economic development, such as the airline hub exemption and emphasis on education with increases for spending.

Chandler said Gov. Scott McCallum's vetoes also helped eliminate some problems with the budget, although those vetoes were made after Lav's study was completed.

The events of Sept. 11 have also affected the state, initially creating shock, and people will just have to wait to see the effects, he said. There's some interruption of productivity, he said, and consumer confidence has been hurt.

Certain industries are going to be affected, he said, listing airlines, insurance, financial institutions, oil and tourism. Wisconsin's tourism industry might not be as badly affected as other states, he said, because most people drive to their destination here rather than fly.

Wisconsin needs to look to the future and one of the things Gov. McCallum talks about is economic development and job growth. "He wants this to be the top priority," he said.

Chandler admitted the state suffers from a brain drain, with highly educated students in the state finding jobs elsewhere.

The governor wants to make an effort to woo them while they're here, he said. "We know that our per capita income is moving greater to the national average. We want to get that up to or above the national average."

He said the biotechnology area at the University of Wisconsin-Madison might help do that.

The personal income taxes in the state are a concern, he said, adding "We know quality of life is important. Do we take advantage of that? We need to better market that."

Chandler said businesses report that it's hard to get people to transfer to Wisconsin. "Then it's hard to transfer from."

University of Wisconsin-Stevens Point Chancellor Tom George agreed with that, saying faculty initially don't want to come, then after a few years they don't want to leave. He suggested the state follow the lead of Iowa, which recruits heavily based on the quality of life in that state. "I think Wisconsin has more to offer and needs to let people know," he said.

Paul Adamski of Pineries Bank said he's run into people who are transferred here against their better wishes, then left and came back within a year or two, sometimes taking a different job just to be able to live here.



	Budget could put state in bind in future years By GENE KEMMETER of The Gazette Wisconsin's 2001-2003 budget could put the state in a bind in the future, the state's secretary of revenue says. Richard G. Chandler was in Stevens Point Wednesday, Sept. 26, and talked with a number of Portage County business leaders about financial issues and other matters. A national study of state budgets by Iris J. Lav, deputy director of the Center on Budget and Policy Priorities in Washington, D.C., said Wisconsin may have the worst state budget mess. State elected officials were criticized in the study for selling off decades of payments from tobacco manufacturers to pay for operating expenses in the budget. The study also criticized the state for the lack of a "rainy day fund" for emergencies, providing so much funding to local governments and depending more on manufacturing jobs than the nation does. Chandler agreed with the assessment, saying the state's stabilization fund is only 1.2 percent of the budget when bond-rating firms say it should be about 7 percent. The state Legislature has been pushing off payments to the future for several years, he said. "It's those kinds of things the governor has taken some stands on to put the budget on solid footing." The state's bond rating has slipped from AA-plus to AA, but Chandler said he feels the change may be due more to the overall economy than the budget itself, although bond raters said the state needs to fix basic budget issues. The state budget was signed about four weeks ago, and Chandler said the budget process didn't go as bad as the last several times, although the next budget will be a challenge. Tax reductions were kept, he said, and state taxpayers paid about 10 percent less in 2000 than they did in 1999 and should pay about 13 percent less in 2001 than they did in 1999. Spending controls enable the tax reductions to continue, he said, and there are a number of things in the budget to promote economic development, such as the airline hub exemption and emphasis on education with increases for spending. Chandler said Gov. Scott McCallum's vetoes also helped eliminate some problems with the budget, although those vetoes were made after Lav's study was completed. The events of Sept. 11 have also affected the state, initially creating shock, and people will just have to wait to see the effects, he said. There's some interruption of productivity, he said, and consumer confidence has been hurt. Certain industries are going to be affected, he said, listing airlines, insurance, financial institutions, oil and tourism. Wisconsin's tourism industry might not be as badly affected as other states, he said, because most people drive to their destination here rather than fly. Wisconsin needs to look to the future and one of the things Gov. McCallum talks about is economic development and job growth. "He wants this to be the top priority," he said. Chandler admitted the state suffers from a brain drain, with highly educated students in the state finding jobs elsewhere. The governor wants to make an effort to woo them while they're here, he said. "We know that our per capita income is moving greater to the national average. We want to get that up to or above the national average." He said the biotechnology area at the University of Wisconsin-Madison might help do that. The personal income taxes in the state are a concern, he said, adding "We know quality of life is important. Do we take advantage of that? We need to better market that." Chandler said businesses report that it's hard to get people to transfer to Wisconsin. "Then it's hard to transfer from." University of Wisconsin-Stevens Point Chancellor Tom George agreed with that, saying faculty initially don't want to come, then after a few years they don't want to leave. He suggested the state follow the lead of Iowa, which recruits heavily based on the quality of life in that state. "I think Wisconsin has more to offer and needs to let people know," he said. Paul Adamski of Pineries Bank said he's run into people who are transferred here against their better wishes, then left and came back within a year or two, sometimes taking a different job just to be able to live here.