Money Crisis Could Impact State Programs

From Wall Street to Main Street…and now State Street: the money crisis is having an impact on state programs you depend on.

MADISON - From Wall Street to Main Street…and now State Street: the money crisis is having an impact on state programs you depend on. Governor Doyle warned Wednesday afternoon the state faces a $3 billion deficit. The stock market plunge and loss of jobs means the state is not taking in enough money. Stocks took another big loss today. The DOW fell 733 points. That's nearly eight percent of its value. It closed at 8,577. The NASDAQ fell 150 and the S&P dropped 90. The governor paints a bleak picture of Wisconsin’s economy. Things actually looked good for the state's finances a few months ago, but as the national economy tanked, ours did too. We could face a $3 billion deficit in a few years if major cuts don't come. The governor admits this is going to be painful. At the core of Wisconsin’s problems: the national slowdown in spending and growth. For starters, shopping in our state slowed so much in August. Wisconsin sales tax revenue plummeted ten percent. Factories have closed or are closing, like a major paper mill in Niagara, Wisconsin, and now general motors in Janesville. That means the state is collecting a lot less income tax, and corporate tax revenue is down nearly 10 percent. Wednesday Governor Doyle faced reporters to admit that things turned very sour for state government in August and September. “We are certainly looking at $3 billion deficit, and it could grow well beyond that if the nation's economy continues to spiral downward,” Governor Doyle said. That deficit would come at the end of the next budget in June of 2011 if major cuts in spending don't happen. The governor says he told state agencies to cut costs by ten percent in the next budget that will have to be approved this winter. “I'm going to have to do a lot of things that aren't pleasant, but I do strongly believe that we'll get through this as a state,” Governor Doyle said.

WTMJ-TV and JSOnline.com
updated 6:54 p.m. ET Oct. 15, 2008

Source: MSNBC