MADISON, Wis. -- A budget shortfall is on the horizon, so state officials are working to stem the effects.

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Gov. Jim Doyle is rolling out his plan to balance the budget once again, but it could mean a battle will ensue, WISC-TV reported.

Sales tax and other revenues are coming up short of expectations, leaving a shortfall of about $527 million. To handle the budget crunch, Doyle is sending the state Legislature a bill with his ideas to repair the budget.

"At the heart of it, this plan is straightforward and just like any real solution to a budget gap. The plan cuts spending and looks for good sources of revenue," said Doyle. "The earlier it can be enacted, the more good it will do."

Among the proposals are $330 million in state agency cuts, which the governor said won't include layoffs or lead to service cutbacks. In addition, he said that he wants to transfer $243 million from the state Transportation Fund, but authorize $190 million in new borrowing to make up for the transfer and keep construction projects on track.

Most controversially, however, the governor has suggested creating a 0.7 percent assessment on hospital revenues, which he said will bring in $700 million in federal revenue. Much of that money would go back to hospitals for Medicaid payments, but $125 million would go toward budget balancing. This idea is a very contentious issue for some Republican lawmakers during the budget battle in the fall, WISC-TV reported.

Doyle said he thinks the proposal makes sense.

"I think we're in a position where the hospitals are in favor of it, and obviously, it helps the state budget dramatically," said Doyle. "We're past the fight, but other than some leftover rhetoric, there isn't any reason not to do this."

The hospital tax was taken out of the budget passed in the fall because of Assembly Republican opposition, and that's likely to continue, WISC-TV reported.

Assembly Speaker Mike Huebsch said in a statement Monday that he'll continue to oppose the idea.

"I have said from the beginning that the state Assembly will not accept higher taxes as a solution to this budget deficit. No matter how you phrase it: 'allowing tax cuts to expire,' 'closing tax loopholes,' or a 'hospital assessment,' the result is the same: higher taxes for the Wisconsin families, individuals and businesses," Huebsch said in the statement.

Senate Majority Leader Russ Decker said that he thinks the Assembly Republicans ruled out the governor's plan without offering any alternatives.

"It is unfortunate that the speaker of the Assembly immediately shot down parts of the governor's plan that will bring in more revenue for the state. Hopefully, we will see their plan for cutting what he calls 'unnecessary spending' in the near future instead of just empty catch phrases," Decker said in the statement.

The Doyle-backed budget bill is expected to be introduced in the Assembly this week in a special session.

Doyle said that he's hopeful action can be taken quickly, but with the disagreement already brewing, the timetable is questionable, WISC-TV reported.