Budget watchers speculate on repair bill endgame
Budget watchers and lobbyists speculate budget negotiators have set aside big revenue uppers like combined reporting and a new hospital tax to focus more on bonding moves and pushing a school payment forward as a short-term, election-year fix to the state's projected $525 million budget hole. Also likely out, observers speculated, would be Gov. Jim Doyle's plan to borrow $243 million from the transportation fund and backfill it with bonding.
While some budget pessimists say the Dem Senate and GOP Assembly still are far apart, others see coming floor sessions on the Great Lakes Compact compromise as a pressure point to finalize a budget deal and get legislative approval while leggies are in the Capitol.
If the transpo diversion and controversial revenue uppers are off the table, some believe budget negotiators could agree to get the necessary dollars from refinancing tobacco securitization bonds and a combination of other bonding schemes. A plan to refinance the state's tobacco bonds, for example, could net the state as much as $68 million a year through 2017, according to the Legislative Fiscal Bureau. LFB says the budget passed last year accounted for some $50 million a year from a refinancing plan; Doyle's repair bill would add another $15 million annually to that.
The original tobacco settlement securitization, done in 2002 under then-Gov. Scott McCallum, got the state almost $1.6 billion to help fill a budget hole. According to LFB, the bond issued then was set to be paid off in 2032, but the state is now expected to retire that bond issue in 2018. The state is expected to receive tobacco settlement money, which is awarded to states in perpetuity, starting in 2019. Doyle's refinancing plan would extend the payoff date to 2027, giving the state cash immediately, instead of starting in 2019. LFB says the net effect of the refinancing would be $94 million less in revenue between now and 2028.
The Legislative Fiscal Bureau explained this in a March 12 memo (see pages 20-22).
See more about what budget watchers are saying in the Friday, April 11 WisPolitics REPORT.
Labels: Budget_Repair_Bill
