WisPolitics Budget Blog

Assembly Speaker Mike Huebsch said today in an interview with WisconsinEye that an agreement on a budget repair bill is days away.

Carrie Lynch, spokeswoman for Senate Majority Leader Russ Decker, didn't throw water on the enthusiasm.

"We're pretty optimistic too, and we're talking with Huebsch folks and the governor's folks and hoping something happens very quickly," she said.

"We're trying to get as far as we can to get a lot of stuff out of the way, so we can see where we have common ground and move from there," Lynch said.

Jessica Erickson, a spokeswoman for Gov. Jim Doyle, said the governor is hopeful that a speedy agreement is in the works.

"The governor has always said we need to get this done quickly," she said. "We are in regular meetings, and we will continue to meet with legislators."

See the WisconsinEye interview here.

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See the LFB document here.

Also, see a memo on appropriations subject to lapse provisions under the three repair proposals here.

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As expected, the Senate passed its amendment to the budget repair bill 18-14, with Democrats voting in favor and Republicans against.

Sen. Mary Lazich, R-New Berlin, was absent from today's session.

The Senate bill did not include a provision to form a conference committee.

UPDATE: Instant reaction from Senate Minority Leader Scott Fitzgerald: Senate Democrats raise taxes by half a billion dollars

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Sen. Mike Ellis, R-Neenah, says the nation is in for a "rude economic awakening" as the bill comes do on a $9 trillion federal debt.

"This country's in one hell of a mess," he said, adding it's a result of "bad budgeting by both Democrats and Republicans in Washington, D.C."

Ellis said the Senate Dem plan was better in Doyle's in at least one respect - they don't "raid" highway funds. But he knocked aspects like shifting school aid payments to the next fiscal year, a move they borrowed from the Assembly Republicans.

He likened the school aid shift to a family not making its mortgage payment for a year.

"We are passing a bill today that no family in Wisconsin would ever suggest as a solution to their economic crisis," he said. "No household in Wisconsin can do that."

He also blasted the hospital assessment, which he said would raise everyone's health care costs. Support from the Wisconsin Hospital Association and Wisconsin Manufacturers & Commerce doesn't make it the right thing to do.

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Sen. Mark Miller, the co-chair of the Joint Finance Committee, said the proposal from Senate Democrats is "fair, responsible common ground."

"We could have put forward a highly partisan proposal, but we did not," said Miller, D-Monona.

Miller urged his colleagues to "put away ideology" and "embrace practicality."

See a press release with Miller's floor comments here.

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Senate Majority Leader Russ Decker, D-Weston, said there are two teams in the battle to repair the state budget - those who side with Wisconsin families and businesses, and those who side with Wal-Mart.

He said the Senate Democrats' plan is a "compromise" that offers a smaller structural deficit than the one introduced by Gov. Doyle or the one from Assembly
Republicans.

Corporations like Wal-Mart and Microsoft are exploiting the "Las Vegas loophole" to the detriment of the tax bills of state businesses and residents, Decker said.

"Everyone should pay their fair share so Wisconsin businesses and families don't have to pay more than theirs," Decker said.

He said the Assembly Republican plan would "drastically" cut into state services.

Senate Minority Leader Scott Fitzgerald, R-Juneau, said Senate Democrats are an "anti-business," "anti-job" and "anti-living wage" caucus, and the Dems' plan increases the size of government.

"What we have here today is growth," he said. "We're growing state government at a time we should be reducing state government."

Fitzgerald said the Dem offer may just be a "positioning" document, and said he doesn't the proposals much of a chance to be included in the final budget fix.

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The Senate is taking up its amendment to the budget repair bill.

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Some assorted reaction to the Senate Dems' plan to repair the budget deficit:

Sen. Decker: Senate Democrats propose compromise budget repair bill

Rep. Huebsch: Statement on the Senate Democrats' budget plan

Sen. Fitzgerald: Democrats confirm tax and spend stereotype

Sen. Miller: Statement on Senate Democrats' budget plan

Rep. Fitzgerald: Senate Democrat budget repair - The wrong direction

Rep. Rhoades: Statement on Senate Finance Committee action on the budget repair bill

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The Senate amendment to the budget repair bill 6-2, with the two Republicans, Sen. Ted Kanavas, R-Brookfield, and Sen. Luther Olsen, R-Ripon, voting against.

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Sen. Jon Erpenbach, D-Middleton, chided Assembly Republicans for passing their budget repair bill without a committee hearing.

While he said he was not going to make the inference, some could infer that Assembly Republicans passed their bill without a hearing process because "they didn't want anybody to see what they were doing so they passed it and got out of town."

Erpenbach said members should remember this is a budget repair bill.

"This is not an answer to fix all the problems that are out there," he said. "Hopefully that will come next session."

He also called the combined reporting proposal a way to force "nameless, faceless corporations" to pay their fair share.

Sen. Luther Olsen, R-Ripon, rejected the notion of a "nameless, faceless" corporation and the idea that it won't effect the overall economy.

"I have no sympathy for corporations, but I think we understand at the end of the day people are going to pay that," he said, saying it could result in higher consumer costs and lower wages.

Note: Erpenbach and Kanavas are sitting in today for regular Finance Committee members Sen. Judy Robson, D-Beloit, and Sen. Alberta Darling, R-River Hills.

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Sen. Ted Kanavas, R-Brookfield, said the Senate Dem proposal "lurches" the state forward into the next fiscal crisis without addressing the root of the problem.

"Bascially what this plan is, 'Let's raise taxes, let's not cut spending, and let's make sure the taxes we do raise are permanent so we have a higher baseline going forward," he said.

Kanavas said he wants to "jump on the bandwagon" of spending and proposed a motion to provide $800,000 in new spending on assistant district attorney positions, since the Senate is treating taxpayer money like "Monopoly money."

"I've evolved in my views," Kanavas said, explaining his reversal on spending.

Kanavas' motion failed 5-3, with Sen. Lena Taylor, D-Milwaukee, voting in favor along with Sen. Luther Olsen, R-Ripon.

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The Senate proposal to repair the budget would result in the smallest structural deficit of the three current proposals, but not by much.

LFB director Bob Lang said this morning at the Senate Finance Committee meeting that the Senate plan builds a structural deficit of $1.37 billion at the close of the biennium. Gov. Jim Doyle's plan carries a structural deficit of $1.4 billion, while the Assembly's plan has a $1.6 billion structural deficit, Lang said.

Sen. Mark Miller, D-Monona, the chair of the committee, said the Senate plan closes a "substantial loophole used by multi-state corporations... whereby they can escape paying their fair share of taxes," referring to combined reporting.

He also said the proposal to delay school aid payments does ensure that categorical aids are protected, and that schools get the full funding obligation guaranteed in the 2007-09 budget.

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The start of today's Senate Finance Committee has been delayed until 10 a.m.

See the LFB memo on the Senate proposal here.

Among the proposals:

*Require DOA Secretary to lapse $40 million in unencumbered balances of appropriations to the general fund.

*Reduce statutory balance from $65 million to $55 million.

*Increase limit on interfund borrowing from 8 percent of GPR balances in a given fiscal year to 13 percent.

*Replace $11.2 million in GPR funding for public library system aid with $11.2 million from the Universal Service Fund.

*Transfer Real ID implementation funds to general fund.

*Does not modify the Assembly proposal to delay $125 million school aid payment from June to July.

*Limit lapse from transportation fund to $50 million; authorize $50 million in general obligation bonds for the state highway rehabilitation program.

*Lapse $800,000 in segregated funds provided to the JFC's supplemental appropriation for the Kenosha-Racine-Milwaukee commuter rail project. Authorize tax of up to $15 (currently $2) on car rental fees in the three-county area to fund the project.

*Increase transfer from the permanent endowment fund to the medical assistance trust fund by $18 million annually associated with additional tobacco bond proceeds from tobacco securitization.

*Create new assessment on hospitals and repeal current assessment of $1.5 million; assessment would collect $416 million over the biennium, but would return $408 million in federal cash, for net aggregate gain for hospitals of $293 million. The state would gain $125 million to offset MA costs, freeing up that amount for the general fund.

*(Las Vegas loophole) Beginning with tax year 2008, require corporations that are subject to the state corporate income and franchise tax, and that are engaged in a unitary business, to file a combined report for state income and franchise taxes, providing $131 million in GPR.

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The Senate Finance Committee plans to exec on the budget repair bill at 9 a.m. tomorrow.

If the Senate substitute amendment to the Assembly version of the bill isn't drafted, the committee could make multiple amendments to change the bill.

Some of those who testified at today's hearing on the budget repair bill pressed the committee to protect their interests or even add money for additional spending to any plan to fix the deficit.

Dennis Oulahan, president of the Milwaukee Teachers Education Association, urged the committee to refrain from cutting money allocated to MPS for math and other programs, saying it would impede the progress teachers have made in closing the educational gap.

Milwaukee Public Schools Superintendent William G. Andrekopoulos said the district has put $10 million it received from the state into a math initiative program that includes a partnership with the University of Wisconsin-Milwaukee and other
organizations. He also announced that MPS could have a 71 percent graduation rate this year, up from roughly 50 percent during the 1990s.

Milwaukee County DA John Chisholm asked to committee to consider including $886,000 in the budget repair bill, funds that he said would allow him to keep 22 prosecutors.

Terry McGowan of the Local 139 Operating Engineers stressed that a stimulus package was needed to keep the engineers working. Local 139 members made up nearly half of the audience, which numbered a little more than 100.

McGowan was critical of a plan forwarded by Gov. Doyle to take money from the transportation fund to pay for general fund expenses and backfill the transportation fund with bonding. He said replacing real dollars with bonds is not a sustainable situation.

-- By Samantha V. Hernandez

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One of Gov. Jim Doyle's top aides pressed a Senate committee this morning to support an assessment on hospital revenues as a way to close the state's budget deficit.

The Senate Finance Committee is meeting at the UW-Milwaukee Student Union Theater this morning for a public hearing on fixing the state's budget deficit.

Department of Administration Deputy Secretary Dan Schooff was one of the first to testify, telling the committee the governor's plan "protects essential state services that protect the public, like you and the public at large."

Doyle has called for the assessment on hospital tax revenues, a transfer from the transportation fund, a series of cuts in state agency spending and other moves to close the deficit.

The Assembly countered with a bill last week that would require deeper cuts in state spending while pushing off a school aid payment into the next biennium and draining the state's reserves to fix the shortfall.

Schooff said Doyle wanted to leave the $100 million in reserves for unforeseen circumstances that may arise. He said other states are dealing with similar budget problems, but Wisconsin lacks the proper reserves that other states have.

He asked for support for the provision in the bill that would do away the "hidden tax" in hospitals.

Schooff said hospitals are not fully reimbursed to treat Medicaid patients and much of the proposed hospital tax would be used to increase those payments, easing the "hidden tax" caused by the under payments. Approving the provisions would Passing this provision would leverage more federal dollars to hospitals so that they can continue treating these citizens.

But Sen. Alberta Darling, R-River Hills, complained the hospital tax it is a tax
on everyone because it would be passed on to patients.

Local officials also took their turn addressing the committee.

UWM Chancellor Carlos Santiago said the UW System has been successful at reducing spending, but urged the committee to "help us to retain the exceptional faculty and
staff." Santiago said that UWM has the largest enrollment rate and that the school is doing more with less.

Milwaukee Mayor Tom Barrett said the city is $5.9 million over budget from snow removal alone last year, and said the state needs to provide funding assistance so that the city does not have to cut back on services like firefighting.

Barrett proposed the passage of a program similar to the 911 surcharge, which
is set to expire this year. Barrett said the funds could be used for police and fire services.

Barrett, a former Congressman, also said he supports the proposed hospital assessment because it would help maximize federal dollars coming back to the state.

See Barrett's prepared remarks here.

See Schooff's prepared remarks here.

-- By Samantha V. Hernandez

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A memo released by the Legislative Fiscal Bureau figures the structural deficit will rise to more than $1.4 billion under the budget repair plan proposed by Gov. Jim Doyle, while the plan forwarded by Assembly Republicans would raise it to more than $1.6 billion.

That's a big leap from the $896 million structural deficit built into the 2007-09 budget signed by Doyle last October.

See the memo here.

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The Senate Finance Committee has sent notice that it will hold an executive session on the budget repair bill on Thursday.

The Senate committee will hold a public hearing tomorrow on the budget repair proposals offered by Gov. Jim Doyle and the one passed in the Republican-controlled Assembly last week.

Senate Democrats are drafting their own repair bill, but it isn't expected to be ready to be introduced at tomorrow's public hearing.

Numbers released by the Department of Revenue show state revenue collections for July through February of this fiscal year were up compared to the same period last year. But Legislative Fiscal Bureau director Bob Lang said the upswing doesn't change the projection the bureau made last month of a $652 million revenue shortfall for the biennium.

"I think the numbers are tracking right now to what we did in February," Lang said.

The February numbers show slippage in some sectors from the percent change Revenue reported following January collections.

According to the Revenue numbers, individual income tax collections from July to February have risen from just more than $4 billion to a little more than $4.1 billion, a 2.6 percent change over the same period last year.

Following January, collections on individual income showed a 3.2 percent change over the July-January period.

General sales and use tax collection went up from $2.48 billion to $2.52 billion, a 1.6 percent increase. The percent change after January was 1.5 percent.

Corporate and franchise tax collections were down 9.5 percent, from $472.37 million to $427.62 million. Following January, these collections were down 9.2 percent.

Public utility collection have risen about $5 million to $146.17 million, a 3.5 percent change, matching the July-January numbers.

Insurance revenue collection rose about $5.5 million to $82.22 million, a 7.4 percent change a boost from the 4.6 percent increase reported for July-January.

The 33-page memo details the potential impacts of funding lapses included in budget adjustment proposals from Gov. Jim Doyle and the Assembly. See it here.

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The Senate Committee on Finance will meet on Wednesday to take up the governor's budget repair bill and the Assembly's substitute amendment to the bill, according to Sen. Mark Miller's office. Miller, D-Monona, is the chairman of the Senate committee.

The Senate committee will meet on Wednesday, possibly for a public hearing, with a time and place to be determined.

The Republican-controlled Assembly passed its version of a repair bill last week. Leaders in both houses have indicated the bill will go to the Joint Committee on Finance, which consists of members of the Senate and Assembly finance committees, but no JFC meeting has been set.

Eric Schutt, chief of staff to Rep. Kitty Rhoades, R-Hudson and chair of the Assembly Finance Committee, said Rhoades is willing to call a JFC exec session this week on the repair bill if asked.

The bill could bypass the JFC is the Senate Finance Committee approves its own version. The bill could then be "dipped" into JFC before being taken to the Senate floor.

Update: The public hearing will be at 10 a.m. Wednesday at the UW-Milwaukee Student Union Theater. Details.

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Wisconsin Manufacturers & Commerce, the state's largest business lobby, has lent its support to the 0.7 percent assessment on state hospital revenues.

"Current underfunding of Medicaid is driving up health care costs for employers," WMC vice president of government relations James A. Buchen said today in a statement. "Hospitals have not seen Medicaid reimbursement increases in 13 years and that has led to a hidden health care tax on employers as costs get shifted to private health care payers."

WMC originally opposed the assessment when Gov. Jim Doyle first proposed it as part of his 2007-09 budget package last year. The assessment is supported by Democrats in the Legislature, but was removed in final negotiations as the budget was approved in October.

Doyle also included the assessment in his budget repair bill introduced last week. He says it will bring $450 million in federal revenues back to the state over the biennium. Most of the federal cash will go toward raising reimbursement rates for hospitals that treat Medicaid patients, but $125 million could be used to help balance the state's general fund, Doyle said.

Republicans have called the proposal a tax that will hike the cost of health care for everyone. The assessment was removed in the budget repair bill passed by the Republican-controlled Assembly Wednesday.

WMC is the second large conservative-leaning organization to back the hospital assessment this week. The Metropolitan Milwaukee Association of Commerce voiced its support for the plan on Wednesday. See the MMAC statement here.

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Gov. Jim Doyle derided the budget repair bill passed by Assembly Republicans last night as "a sham" and "fiscally irresponsible," but also emphasized the he and Assembly Speaker Mike Huebsch have "good open lines of communication."

"We are way ahead in understanding what an agreement might be and what a package might look like," Doyle, comparing the repair bill process to last year's full-scale budget battle, said in a press conference today.

Doyle said the Republican proposal, which calls $250 million in additional cuts to state government but does not name what areas to cut, would mean slashing K-12 schools and university funding, and basic health care services offered by the state like SeniorCare, Doyle said.

"Obviously the level of cuts they propose are extremely harmful to state government, and extremely harmful to the services people rely on," he said.

Doyle also blasted the proposal to push off some school aids payments into the next fiscal year. While Doyle was reluctant to say anything is off the bargaining table as negotiations continue, "that's about as close to getting off the table as you can be for me," he said.

Listen to audio of the press conference here.

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Some press release reaction:

Assembly Speaker Mike Huebsch, R-West Salem

Assembly Majority Leader Jeff Fitzgerald, R-Horicon

Rep. Kitty Rhoades, co-chair of the Joint Finance Committee, R-Hudson

Rep. Steve Nass, R-Whitewater, the lone Republican to vote against the bill

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An LFB memo has been released that outlines the state programs that will receive general purpose revenue increases in the 08-09 fiscal year.

The GOP plan proposes to cut $250 million across the board in the 08-09 fiscal year. Speaker Huebsch says the plan amounts to a spending freeze for the second year of the biennium. The plan does not delineate where the cuts should be made, leaving those choices up to the Doyle Administration.

Assembly Democrats say that important social programs will feel the brunt of the cuts.

See the memo here.

Among the agencies with funding increases, according to the memo:

Children and Families - $26.7 million

Dept. of Administration - $1.2 million

Dept. of Corrections - $12.4 million

Dept. of Health and Family Services - $17.3 million

Higher Ed Aids Bd. - $7.6 million

Dept. of Public Instruction - $40.8 million

Dept. of Revenue - $2.7 million

UW System - $37.2 million

Dept. of Workforce Development - $4 million

Compensation Reserves - $93.9 million

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The GOP Assembly plan to balance the budget passed by a 51-46 vote.

Only two legislators voted opposite the rest of their party - GOP Rep. Steve Nass voted against the bill, and Dem Rep. Bob Ziegelbauer voted for it.

See the roll call here.

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Rep. Huebsch responded to Kreuser's comments by saying in this time when state revenues are down, the government will simply have to get by with less because raising taxes on those who fund the government is not an option.

"When you have $7 billion you're going to spend, you can certainly cut $250 million," he said, referring to the plan's across-the-board cuts.

The West Salem Republican said there are over 50 different stae agencies where savings can be found.

Assembly Minority Leader Jim Kreuser, D-Kenosha, ripped the Republicans alternative budget fix, calling it "intellectually lazy" and said Republicans "don't have the intestinal fortitude to identify where (budget cuts) are going to come from."

Kreuser called claims that the plan won't raise taxes "a lie," and that cuts to services like youth aids will result in tax increases at local government levels.

"When you do something at the last minute, it looks like a minute's worth of work," Kreuser said.

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Rep. Roger Roth, R-Appleton, is back from his deployment in Iraq and has returned to the floor of the Assembly this evening.

Roth was introduced by Rep. Mark Honadel in dramatic fashion, and received a long standing ovation from his colleagues.

Roth is a member of the 115th Fighter Wing, Wisconsin Air National Guard, based in Madison. He has been deployed in Iraq since mid-January.

Rep. Steve Nass, R-Whitewater, will vote against the substitute amendment to the budget repair bill, his aide Mike Mikalsen says.

The Assembly will be coming to the floor in a matter of minutes.

Assembly Speaker Mike Huebsch, R-West Salem, said the GOP Assembly's plan for fixing the state's revenue shortfall meets Republicans' No. 1 criteria: It doesn't raise taxes.

"It is fiscally responsible, I believe, to balance this budget without raising taxes," Huebsch said in a press conference to announce details of the budget fix.

Listen to audio of the press conference here.

Assembly Republicans will amend Gov. Doyle's budget repair bill on the floor, replacing it with their plan to close the budget hole with $250 million in across-the-board GPR cuts, delaying $125 million in school aid payments to the next biennium, taking $55 million out of the budget stabilization fund and reducing the statutory balance by $45 million as part of a $425 million plan.

Huebsch defended the plan to draw the state's "rainy day" fund down to $22 million.

"It's raining, there's no question," Huebsch said.

Huebsch said the $250 million in GPR cuts are not delineated in the Republican plan, which gives the governor flexibility to make the cuts as he sees fit.

Asked whether it was good government to present the bill only a couple hours before voting on it, Huebsch and Assembly Majority Leader Jeff Fitzgerald said the proposal has been in the works for a couple months and Doyle is aware of the details.

"I don't think we've rushed into anything," Fitzgerald, R-Horicon, said. "This is not just something that popped up overnight."

Huebsch said the GOP plan budgets the same way that families do, saying even families sometimes have to delay payments on a bill in order to make ends meet.

"I think in very difficult fiscal times you make very tough decisions," Huebsch said, explaining the decision to delay the school payment, a move that would be permanent under the budget proposal. He said the thrust of the plan was to "take every opportunity to not raise taxes."

Huebsch also took some jabs at Senate Majority Leader Russ Decker, D-Weston, for tax increase proposals. He warned, "Senator Decker may be willing to shut down state government if we do not raise taxes."

Huebsch said he would be willing to take the proposal to the Joint Finance Committee or to a conference committee if that process is necessary. But he said it's important to move quickly.

"Every day that goes by with the current budget, we're spending more than we have," he said.

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The state would implement $250 million in across-the-board GPR cuts and push off $125 million in school aid payments to the next biennium to fix the state's budget shortfall under a proposal Assembly Republicans released late Wednesday.

The proposal also calls for taking $55 million out of the budget stabilization fund and reducing the statutory balance by $45 million. The plan also calls for wiping off $50 million in lapses that were included in the budget signed last year, giving the package a total price tage of $425 million.

School aid payments, the Department of Transportation, sum sufficient appropriations and federal appropriations would be exempt from the across-the-board cuts.

According to a Legislative Fiscal Bureau summary of the proposal, the state would have a net balance of $9 million on June 30, 2009.

Read the LFB memo.

The latest:

Assembly Org will meet in the next half hour to introduce the governor's budget repair bill.

Assembly Speaker Mike Huebsch will host a press availability after Org to give the details of the Assembly Republican alternative for budget repair.

Members have been told to be ready to hit the Assembly floor at 9:30 p.m.

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Gov. Doyle's staff called to clear up the statement before that the special session date for the budget repair bill was moved up to today so the Assembly could take up the legislation.

Doyle spokesman Lee Sensenbrenner said the governor's office moved up the date "to give (the Assembly) the ability to take it up, but we're not saying what they plan on doing."

"We're not trying to say what their plans are," Sensenbrenner said.

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Carrie Lynch, spokeswoman for Senate Majority Leader Russ Decker, said unlike the Assembly the Senate won't be acting on a budget bill tonight.

She said Decker wants to see the bill go through the Joint Finance Committee process before it gets to the Senate floor.

"They may not take the business of making sure the budget balances seriously, but we do," Lynch said.

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Gov. Jim Doyle has changed the special session date to today because the Assembly plans on taking up the bill tonight, a spokeswoman from Doyle's office said.

See more later.

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See the analysis here.

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AFT-Wisconsin has a new radio ad that will begin running statewide tomorrow urging support for the hospital assessment Gov. Jim Doyle has proposed as part of the budget repair bill.

The ad, made to sound like a news update, says Assembly Speaker Mike Huebsch and Assembly Republicans blocked the assessment last year even though it could have generated "nearly $1 billion for Wisconsin" and the state now faces a $655 million shortfall as a result.

The "newscasters" say the state could still get $450 million from the plan that's supported by the governor, Senate Democrats and "even Wisconsin hospitals."

"But will Mike Huebsch and Assembly Republicans stand in the way again?" one newscaster asks.

Listeners are urged to call Huebsch.

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Gov. Jim Doyle's $527 million budget repair bill was released minutes ago.

See the 48-page bill here.

Here's a breakdown of where the $527 million comes from:

State agency lapses and transfers: $330.4 million (includes transfer from transportation fund; 3 percent cut to cabinet agencies; $30-40 million in FY09 program cuts; $70 million yet to be determined)

Hospital assessment: $125 million (the assessment would sunset at the end of the biennium)

Permanent Endowment Fund transfer to Medical Assistance Trust Fund: $30 million

Real ID funding reduction: $5 million

Tax Fairness - Real Estate Investment Trusts: $6 million

Universal Service Fund: $11 million

Transfer from budget stabilization fund: $22 million

*In addition, the proposal would dedicate $2.5 million to the Rural Hospital and Institutions for Mental Disorders Supplement.

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Despite a special legislative session on Thursday called by Gov. Doyle to deal with the bill, its looking very unlikely there will be a vote this week.

Leaders in both houses have said they are waiting to see an analysis from the Legislative Fiscal Bureau before moving forward with a vote. The bill would also have to go to the Joint Finance Committee. A meeting of the JFC has not yet been scheduled, according to the committee co-chairs' offices.

LFB director Bob Lang said this morning that he hasn't yet received the bill. If the bill was delivered to LFB today, he said they would try their best to get something out.

"As soon as I get a bill, we'll get cranking on it," he said.

As with the special session Doyle called late last year on campaign finance reform, the Assembly and Senate could convene in a "skeletal" session on Thursday and keep the session open until they are ready to vote on the bill.

Doyle said yesterday that the bill needs to be dealt with in the next couple weeks, but there is some flexibility.

"The real hard and fast deadline is in early June if we have fixed this then we probably have to begin pro-rating payments we make to contractors," he said. "We have to really at that point be figuring out what we have to do with shared revenue and school aids."

Doyle said many local governments are holding back on letting road repair projects until the revenue shortfall is solved. He said those community leaders need to be assured that the budget repair will not cut shared revenue or road aid to local communities.

"Really almost every day that passes here is a deadline," he said. "In terms of having to move, where we have to take formal action as a state to back away from commitments that were made in the budget, we have a few weeks before we reach that point."

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In a press conference yesterday announcing his budget repair bill, Gov. Jim Doyle urged "prompt, responsible action" on his $527 million plan to use money from the transportation fund and a new assessment on hospital revenues to fix much of the state's budget hole.

"All across the country, states are grappling with budget shortfalls," Doyle said. "And here in Wisconsin we are not immune."

Doyle said his plan cuts spending and looks for "good sources of revenue," while protecting education funding, job creation and health care without raising taxes.

"The earlier it can be enacted, the more good it will do," he said.

Doyle was joined by Assembly Minority Leader Jim Kreuser, who said as with the budget that passed last fall, he's willing to work across the aisle to get the votes necessary for passage of the repair bill.

"Assembly Democrats are willing to meet the Assembly Republicans at the fence," Kreuser said. "Twenty-five votes (from Assembly Democrats), 25 votes (from Assembly Republicans). No matter how we have to do it, we'll get it done."

Among the details:

- A transfer of about $243 million for the state transportation fund, which would be backfilled by a combination of general obligation bonds, federal transportation funds and revenue bonds.

- The transfer is part of $330 million in lapses, transfers and cuts that includes $30 million to $40 million in reductions to new programs that begin in the 2008-09 fiscal year. "Some good programs that we intended to start full force in the second year of the budget will either have to be delayed, or in many cases, we will start the programs; they just simply will not get as much as what had been planned for," Doyle said.

As an example, Doyle pointed to the renewable energy fund, which would be cut from $15 million by "several million dollars," Doyle said.

- Doyle is again proposing an 0.7 percent assessment on hospital revenues, a plan that was pulled out of the budget following Republican objections last fall. Doyle says the assessment would secure $700 million in federal revenue over the biennium, $125 million of which could be used to reduce taxpayers' share of the Medicaid program and go toward plugging the hole in the general fund.

"There is no good argument against taking this step," Doyle said.

- The plan includes a move to prevent corporations from taking advantage of captive rental real estate investment trusts to avoid paying an estimated $6 million in state property taxes. Media reports have detailed Wal-Mart, for example, using the arrangement in Wisconsin.

- Adjustments to the state's tobacco bond finances would mean $15 million in annual savings, but will keep the fund "sound and whole," Doyle said.

- The state's budget stabilization fund would be tapped for $22 million, but Doyle said $100 million would be left in the fund. "It is simply irresponsible to budget to a point where we have nothing left in reserve," he said. "We would be in a greater bind had our budget not included a cushion, and we must make sure that we prepare ourselves for an uncertain future."

Listen to audio of the press conference here.

Listen to the Q&A with reporters here.

Labels: Budget_Repair_Bill

Assembly Speaker Mike Huebsch, R-West Salem, says Assembly Republicans will not accept tax increases to solve the 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 Wisconsin families, individuals and businesses," Huebsch said in a statement. "What the tax-first crowd doesn't seem to realize is that this economy is hitting those folks too, and higher taxes means less in their pockets for mortgages, gas, groceries and other family bills."

Senate Majority Leader Russ Decker, D-Weston, said he's glad the budget repair process is starting, and took a jab at Huebsch.

"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," Decker said in a statement. "Hopefully we will see their plan for cutting what he calls 'unnecessary spending' in the near future instead of just empty catch phrases."

Assembly Minority Leader Jim Kreuser, D-Kenosha, said Doyle's bill is "a balanced and reasonable compromise which addresses the budget shortfall while respecting the interests of the majority parties in each house."

"If we adjourn this session without doing our job and allow this impasse to go on for another hundred days then the people of Wisconsin will undoubtedly hold us accountable for our inaction," Kreuser said in a statement.

More reaction:

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Wisconsin Hospital Association

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Labels: Budget_Repair_Bill

The Center for Medicare and Medicaid Services has extended a deadline that could have jeopardized the state's ability capture the full amount of federal money flowing back from the proposed hospital assessment.

Gov. Jim Doyle said today that the March 15 deadline has been extended by the feds. Doyle's budget repair plan implements a .7 percent assessment on hospital revenues, which will result in $700 million in federal revenue coming back to the state over the biennium.

The bulk of that will go to increase the reimbursement rates hospitals receive for the treatment of Medicaid patients. But about $125 million over the biennium will be used to reduce taxpayer support for Medicaid, freeing up more money for general purpose spending, Doyle said.

State budget director Dave Schmiedicke wasn't sure how long the deadline will be extended, but thought it could be one to three months. He said the state won a reprieve from the looming deadline to get the assessment in place because the feds asked a question about the state's plan.

UPDATE: In a follow-up, Schmiedicke said the Department of Health and Family Services has not yet received the query from the federal CMS that would formally extend the deadline, so the deadline remains March 20.

When the question is received, the deadline will then be extended for 90 days, Schmiedicke said.

Labels: Budget_Repair_Bill

Gov. Jim Doyle informed legislative leaders today that he wants to take care of the state's budget shortfall largely through a transfer out of the transportation fund and a new assessment on hospital revenues.

Doyle sent a letter to lawmakers today outlining his proposal to fix the shortfall, which the Legislative Fiscal Bureau estimated at $652.3 million.

Doyle's administration has already addressed $125 million of that through a change on payments for short-term bonds. The bulk of the rest would come from the transfer and the assessment.

See the letter.

Labels: Budget_Repair_Bill

Wisconsin voters would like lawmakers to figure out a fix for the state's budget problems now rather than waiting until after the November election, according to a new WisPolitics/Checkpoint survey.

Sixty-one percent of those surveyed said they would prefer lawmakers extend their work period and fix the projected deficit now. Twenty-nine percent said they preferred lawmakers to deal with the problem after the election when the state's "fiscal picture will be clearer." The rest weren't sure or had no opinion.

The telephone survey of 400 likely voters was conducted Feb. 26-March 2. The margin of error was plus or minus 5 percentage points.

See more in Friday's REPORT.

Labels: Budget_Repair_Bill

Gov. Jim Doyle will unveil his budget repair bill at a news conference in the Capitol at 2 p.m.

Doyle has called a special session of the Wisconsin State Legislature for Thursday.

Stop by later for updates.

One proposal that many believe will be part of the budget reapir bill is to take money from the transportation fund and then bond to backfill the transfer, according to multiple sources who said the idea has been trotted out to some lawmakers.

The transportation fund borrowing measure is likely to appear in Doyle's repair bill, because it would be more palatable to Assembly Republicans than a tax increase, budget observers agree. Speculation puts the amount that would be taken from the fund at $300 million, though other amounts have been floated.

Senate Majority Leader Russ Decker, D-Weston, sounded a cautious tone about borrowing last week.

"You don't rule anything out, but I think you need to be careful with borrowing because you create a long-term debt that needs to be paid back," he said. "It's no different than borrowing money on a home. You stretch yourself too thin, it really becomes a problem."

Craig Thompson of the Transportation Development Association said the plan is a bad idea, and the timing is particularly bad as Wisconsin drivers are dealing with pothole-riddled roads.

"We've tried this idea two budgets prior, and we've only made the situation worse," Thompson said. "Eventually we're going to have to decide on the general fund side to reduce costs, raise more revenue or both. But borrowing form the transportation fund in hopes we'll grow our way out of it does not work."

Other ideas that have been discussed are delaying the elimination of the estate tax, a proposal that Senate Democrats favor, but Assembly Republicans will oppose.

Decker has continued to say he'd like closing corporate tax loopholes as part of the budget repair package. But Assembly Republicans and the governor are not on board with the "Las Vegas loophole" proposal.

One proposal publicly mentioned by Gov. Doyle, an assessment on hospital revenues meant to capture more federal aid for Medicaid, may not pay off fully if not passed quickily. According to several sources, if the hospital assessment isn’t adopted by the end of March, the state could lose out on about $225 million in federal revenue for the 2007-08 fiscal year.

Doyle says the hospital assessment could bring back $450 million in federal money to the state over the biennium; $125 million of that could be applied to the Medicaid program to reduce the burden on the general fund. State hospitals, which originally opposed the assessment, now favor it and say it will boost their reimbursement for treating Medicaid recipients. Republicans, however, label it a tax and appear as united against it as they were during last year's budget drama.

Without an assessment on the books by the end of this month, however, the first year of the federal match may be lost to the state. With the way Medicaid payment methodology plans are handled, the timing of the budget fix could mean the state would be unable to go back and capture the entire federal match of the hospital assessment, state budget director Dave Schmiedicke said this week.

Schmiedicke said last week he couldn't say yet whether the hospital assessment will be a part of the bill, but did speak positively of the assessment.

"We're looking at a number of different options," he said. "Clearly the hospital assessment is an approach where in effect we're just getting our fair share of federal Medicaid dollars, and in addition the hospitals are getting a much higher rate payment from the federal government."

Labels: Budget_Repair_Bill

Senate Majority Leader Russ Decker, D-Weston, said today that voting on a budget repair bill at the special session next Thursday would be a "euphoric scenario."

"You still have to have a hearing. Fiscal Bureau still has to do an analysis," Decker said. "We're just not going to take something with that big of an impact and push it right through. It needs some thought to it. We need to look at the short-term and long-term impact of it."

Decker said he and Assembly Speaker Mike Huebsch spoke "in general terms" about the budget repair bill at a meeting this morning.

"The governor has not put anything out yet. I have not seen any proposals in any detail other than general descriptions of what he'd like to see done," he said.

Asked if the process of budget repair could drag on for the next few months, Decker replied, "It depends what's in the bill. It depends how people want to put the state's finances in order. There's a lot of variables out there."

Decker reiterated his position that the Senate Democrats would like to close corporate tax loopholes.

Gov. Jim Doyle is calling for a special session of the Legislature at 10 a.m. on March 13 to take up a budget repair bill.

"I am working closely with and calling on legislative leaders to reach an agreement and quickly address the budget gap the state of Wisconsin is facing," Doyle said in a statement. "The budget imbalance has serious consequences if left unresolved. It is imperative that we find a responsible solution that protects our basic values, continues vital services, and maintains our financial integrity."

Doyle will introduce the budget repair bill early next week, according to his office.

In a formality that sets the stage for Gov. Jim Doyle to issue a budget repair bill, Secretary Mike Morgan today issued a letter certifying the state revenue shortfall.

Despite administrative cuts of more than $125 million, Morgan says state expenditures will exceed revenues by nearly $77 million in the 2007-08 fiscal year, and nearly $351 million in 2008-09.

"Failing to quickly address this spending imbalance will have severe consequences for the state's fiscal health," writes Morgan.

"This spending imbalance may also seriously affect the state's ability to secure short- and long-term debt," writes Morgan."Issuance of operating notes that may be required in the next fiscal year will not be possible until this imbalance is corrected."

See the letter here.