However, Earl's tenure as governor was a challenge from the start. By the time he took office, Wisconsin was marred by a budget deficit of nearly $1 billion and a 12% unemployment rate. Earl signed legislation making the 5% sales tax permanent and also added a 10% surtax on state income tax which was later reduced. Once the state was fiscally sound, Earl passed initiatives improving the environment, education, and equal opportunity. Earl appointed Doris Hanson, the State's first and only female to hold the office of secretary of the Department of Administration and Howard Fuller, the first African-American appointed to a cabinet position heading the Department of Employee Relations. Due to disagreements over healthcare reform, prison staffing, wage freezes and other matters, Earl's relations with state labor soured and made his tenure as governor all the more complicated.