MADISON, Wis. -

Democratic Gov. Jim Doyle's inauguration is Wednesday, and Doyle will face a state budget deficit of $1.6 billion.

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Although that amount is about half what the deficit was four years ago, fixing it will be a big hurdle for state leaders.

And the budget fix won't come from a simple tax increase. The governor has pledged not to raise sales, income or corporate tax rates.

Just how the budget hole will be filled isn't yet known, and at the same time, Doyle and Legislative leaders are talking about new programs.

The biggest programs are in health care. Doyle wants to expand BadgerCare to cover all children.

Incoming Senate Majority Leader, Democrat Judy Robson, and the new Assembly Speaker, Republican Mike Huebsch, said they are open to the idea.

Another Doyle plan is to have a catastrophic pool. Under the plan, businesses with fewer than 50 employees could buy into a large purchasing pool to get low-cost basic coverage.

How would the state pay for it? The answer might be by raising the cigarette tax by as much as $1 a pack.

That proposal could bring in $227 million a year, at least initially. But if people quit smoking because the tax went up, any program counting on that money could see a shortfall.

Doyle said he is open to some cigarette tax increase if it funds health care, but maybe not $1.

Robson said she wants to hike the cigarette tax, but Huebsch said he doesn't support an increase.

Also on the radar is ethanol. All leaders support what could be a boon for farmers, and all seem to back tax breaks for ethanol producers.

But Huebsch said he won't support a mandate that all gas include a percentage of the additive.

But first on the agenda will be an ethics plan, WISC-TV reported.

In fact, even before the session begins, Doyle -- along with Robson and Huebsch -- are backing a plan to clean up state government.

The ethics plan would combine the state Ethics and Elections Boards in a new Government Accountability Board without political appointees. The new board would have an open budget to pursue government corruption in both civil and criminal cases.

However, the issue of lawmakers' sick leave benefits needs to be hammered out, WISC-TV reported.

Late last year, the Milwaukee Journal Sentinel showed that almost no lawmakers were using their sick time -- even when some where out sick.

The unused hours can be converted into money for health care upon retirement, WISC-TV reported.

Huebsch said the assembly will attempt to dump that perk altogether. Robson said she wants to keep it but with better reporting and requirements.

Doyle's inauguration is in the Capitol Rotunda at noon on Wednesday. Channel 3000 stream the inauguration live online.