A special session of the Legislature called by Gov. Jim Doyle will begin tomorrow to address a remaining $414 million hole in the state’s current two-year budget. The start of the special session coincides with the conclusion of the regular session.

Doyle on Monday unveiled his package to eliminate the deficit. He wants to enact a hospital tax on a facility’s revenue to leverage at least $450 million in additional federal Medicaid matching dollars, freeing up about $125 million in the budget that would have gone to cover health care spending. Lawmakers rejected the same measure last year. The governor also proposed transferring $243 million from the transportation fund, borrowing to cover some of the lost funds. Another $87 million in spending would be cut or pushed off a year.

Democrats have proposed extending collection of an estate tax that expired at the start of the year. Republicans did not endorse the Democrats’ proposals but said they would consider all options.

Doyle ordered state agencies last month to cut $111 million from their current-year budgets in response to a new revenue forecast from the nonpartisan Legislative Fiscal Bureau that shows a $650 million deficit in the fiscal 2008-2009 biennial budget. In addition to the cuts, state officials said repayment of a short-term loan would be delayed, bringing down the current deficit by another $125 million, leaving the budget with a $414 million hole.

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