Wis. Legislature to focus on economy again in 2010

AP News
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Posted: Jan 04, 2010 10:37 AM

Wisconsin's economy hit rock bottom in 2009, with unemployment reaching 26-year highs and the state budget facing its deepest hole ever.

There are signs that 2010 won't be as bad.

Even so, dealing with the economy and trying to find ways to put more people back to work is expected to dominate the coming legislative session and much of Gov. Jim Doyle's last year in office.

Doyle, who is not seeking a third term, will have a Democratic-controlled Legislature to help push through his agenda again this year. Those Democrats, in their second year of control, will be mindful that in November voters will cast judgment on how well they did.

Economic issues will be at the top of the agenda, said Charles Franklin, a University of Wisconsin-Madison political science professor.

Politicians will focus their rhetoric on the issue, but given that it's an election year it's unlikely that anything dramatic will be done in the Legislature related to the economy, he said.

Instead, both sides will focus on passing changes that can be done easily but that they can tout on the campaign trail as being substantive, Franklin said.

"It's probably better for the Legislature to debate the issues than it is to vote on them," he said. "A lively debate on these things lets both parties and candidates set out their positions and talk about them at length."

Given that it's an election year, and the Legislature is fresh off raising taxes more than $5 billion in 2009, Republicans say they expect Democrats to cast a low profile.

"The next six months are going to be nothing more than window dressing," said Senate Minority Leader Scott Fitzgerald, a Republican from Juneau. He said Democrats squandered their first year as the majority party in both houses of the Legislature by raising taxes and in 2010 they will be focused on trying to get voters to forget about that.

Democrats in control say their work will center on creating jobs and improving the economy.

Make no mistake, for most politicians 2009 was a year to forget. State government furloughs, job losses, tax increases and spending cuts don't make for an attractive campaign flyer.

Unemployment hit a 26-year high at 9.4 percent in March and by November it had come back down to 7.8 percent. Even so, that was 2.6 percentage points higher than a year ago. The state lost 126,700 jobs over the previous 12 months.

The state budget projected shortfall hit a record-high $6.6 billion before the Legislature passed a balanced spending plan at the end of June. Lawmakers and Doyle solved the problem by plugging in $2.2 billion in federal stimulus money and raising taxes by more than $2 billion. They also cut spending on state agencies and aid to schools and local governments in addition to ordering 16 days of unpaid leave for most state workers over a two-year period.

But even with that, overall state spending increased 6.2 percent and by mid-2013 another $2 billion budget hole is projected.

Those factors contributed to Wisconsin being named one of the 10 most fiscally troubled states in the country in a report by the Pew Center for the States released in November. The report cited the state's rise in unemployment and drop in revenues from 2008 and 2009, warning that residents should prepare for more tax increases and service cuts.

Doyle and Democratic legislative leaders say they are cautiously optimistic that the economy has turned around and the federal stimulus money that flowed into the state in 2009 will lead to more jobs and an improved economy.

Doyle called 2009 "a very, very tough year" but said there have been positive signs that the economy is improving. He said tax incentives passed by the Legislature in 2009 are working, leading to Mercury Marine's decision to consolidate in the state and attracting smaller biotech companies to Wisconsin.

"Our real challenge now is, as the recession eases and hopefully as we move back to a growth economy, to make sure Wisconsin is in position to really take advantage of an economy that's bouncing back," he said.

Doyle and Democrats are espousing cautious optimism at the same time they have had to defend how well the stimulus money has worked in Wisconsin.

Only about 10,000 jobs were created or retained thanks to nearly $700 million in stimulus money through the end of September in Wisconsin, according to The White House. Most of those were teachers and other public sector jobs. With only a couple thousand private sector jobs impacted so far, Republican critics have said the stimulus didn't do enough to warrant the cost.

"You always like to do more," said Senate Majority Leader Russ Decker, a Democrat from Weston. "What I think it did is stop the bleeding."

More private sector jobs will be created in 2010, said Assembly Speaker Mike Sheridan, D-Janesville.

"It's my understanding any time you have a recession, the first thing you do you get through those difficult times and the jobs will come," Sheridan said. "I really feel like we've set the stage and built the foundation for a strong economy in the future."

He said the Assembly's primary focus next year will be creating jobs. A task force created by Assembly Democrats, which includes representatives from organized labor and the state's largest business lobby, Wisconsin Manufacturers and Commerce, has been meeting and generating ideas that the Assembly will take up, he said.

Assembly Minority Leader Rep. Jeff Fitzgerald, R-Horicon, dismissed the task force saying it was nothing more than political cover for the fact that Democrats didn't do enough to improve the economy in 2009.

Wisconsin Manufacturing and Commerce, the state's largest business group and a powerful lobbying force in the Capitol, has been a vocal and persistent critic, pointing out in a recent news release that state government jobs now outnumber manufacturing jobs in Wisconsin.

WMC vice president of governmental relations James Buchen blamed tax increases passed by the Legislature for killing manufacturing jobs and creating government jobs.

Sheridan defended action taken by Democrats, saying they weighed the need for higher taxes, cutting state agency budgets and creating other new tax breaks and incentives designed to attract companies to the state and improve the economy.

"I think we as Democrats did a heckuva job making those tough decisions," Sheridan said.