Dems are touting a Legislative Fiscal Bureau report released today as evidence that their mix of spending cuts, job creation efforts and revenue increases have helped to stabilize the budget.

Republicans said the report shows state finances continue to dangerously teeter toward fiscal disaster.

The LFB has revised its projections for the state's gross balance, dropping it almost $220 million to $55.7 million -- not a large enough gap to trigger a budget repair bill. State law requires a budget repair bill any time expenditures exceed revenue by one-half of 1 percent, a gross balance of roughly minus-$70 million in this biennium, according to DOA. The state budget exceeded that threshold in each of the last two years as revenue started to plummet due to the declining economy.

The latest estimates take into account $200 million in administrative lapses Doyle vetoed into the 2009-11 budget -- budget trims the guv referenced in his State of the State speech last night.

State Budget Director Dave Schmiedicke said decisions on administering $200 million in lapses will come in the next few weeks.

"We are looking at different approaches to keep in mind the key priorities of education and health," Schmiedicke said. Including the budget repair bill from 2009 and the 2009-11 biennial budget, more than $3.54 billion has been cut from state government thus far, Schmiedicke said.

Joint Finance Committee Chair Rep. Mark Pocan, D-Madison, said the estimates show the state economy is bouncing back.

"There is a lot of reason to have some hope," said Pocan. "A lot of states are seeing a lot tougher times right now."

But Rep. Robin Vos, one of four Republicans on JFC, said Democrats are ignoring the finding that state revenues remain nearly flat.

"If that continues, we will be headed for a massive fiscal train wreck," Vos, R-Caledonia, predicted.

More reaction can be found in the press releases from Pocan, Vos, JFC co-chair Sen. Mark Miller, and Assembly Speaker Mike Sheridan.

-- By Greg Bump

The state's books are projected to be about $225 million off due to a lapsed reciprocity agreement with Minnesota and lagging cigarette sales tax revenues.

The Legislative Fiscal Bureau today released its annual update, finding that the state has a projected gross balance of $55.7 million. Once statutory balance is figured in, the net balance at the end of the biennium in mid-2011 is projected to be -9.3 million.

Even so, Dem legislative leaders say a budget repair bill is not necessary.

-- By Greg Bump

Gov. Jim Doyle said today his warning of another round of budget cuts in last night's State of the State address was a reference to the $200 million in unspecified lapses called for in the 2009-11 budget bill signed last year.

Doyle used his veto pen to include an additional $200 million in cuts to state agencies, a move that gave the state a $290 million "cushion," Doyle said.

"It is very likely I will have to make those $200 million, or at least a significant portion of those $200 million in cuts," Doyle said today at a press conference in McFarland to tout a clean energy bill.

Doyle said the cuts will be meted out across state agencies, but said protecting education will remain a priority.

"Everybody may feel a little pain, but we're not going to see the kinds of destructive actions that have happened in other states," he said.

With new fiscal outlook numbers due to be released soon, Doyle said it looks like another budget repair bill may be avoidable.

"I think so. But I want to put a big 'I think so' on that," Doyle said. "Because frankly economists -- we base these budgets based on these projections -- and in this economy, economists have a hard time sort of projecting where we're going to be six months or a year from now."

Doyle said layoffs to state workers should be avoidable, but couldn't definitively say there won't be any.

"We really worked hard to avoid layoffs. Particularly in this economy, I don't want to be putting people out of work," he said.

Doyle said holding 10 percent of state positions vacant and requiring an eight-day furlough on state workers this year and next has helped to avoid about 1,500 layoffs of state workers.

-- By Greg Bump

A provision to provide $3 million in competitive grants focused on achieving a statewide policy to ban candy-flavored tobacco products and free tobacco samples was deleted by the JFC.

The funding request was made by the Department of Health Services as part of a request to spend nearly $24 million in federal stimulus funding over the next two years for prevention and wellness programs such as obesity and tobacco use prevention.

The committee, in a motion from Rep. Phil Montgomery, R-Ashwaubenon, removed the language on banning flavored tobacco and ordered the Doyle administration to resubmit the request.

-- By Greg Bump

Rep. Phil Montgomery, R-Ashwaubenon, said a federal plan to map of broadband Internet service availability would create a tool that is "obsolete the second it's created."

The committee, despite Montgomery's claims, approved $1.7 million in ARRA funding to produce the map.

Montgomery said a better use for the funding would be to purchase the equipment needed to expand broadband.

But the majority disagreed, passing the expenditure 13-1. Sen. Mark Miller, the Monona Democrat who co-chairs the committee, said he applauds the feds commitment to expanding broadband access, and to do that a map is essential.

"I certainly wouldn't want us to stand in the way of the expansion of high-speed Internet," he said.

The Legislative Fiscal Bureau said the map is scheduled for completion by February 2011, and there may be subsequent grants available to update the mapping.

-- By Greg Bump

The Joint Finance Committee today approved spending $1 million in ARRA funding to cleanup leaky underground storage tank sites at the Chrysler Engine Plant site in Kenosha.

The funding will be allocated from a pot of nearly $6.4 million in federal stimulus funds set aside by the JFC in August for underground storage tank site remediation.

Sen. Luther Olsen, R-Ripon, voted against the measure, saying the state was being too hasty to clean up Chrysler's mess.

"They haven't come to the conclusion they have no money to do this," said Olsen of the embattled automaker.

Sen. Judy Robson, D-Beloit, joined Olsen in voting against the expenditure. She said the company previously "got U.S. money and then took jobs to Mexico. Enough."

The item passed 11-3, with Rep. Phil Montgomery, R-Ashwaubenon, joining Olsen and Robson in voting against it. Rep. Robin Vos of Caledonia and Sen. Alberta Darling of River Hills, both Republicans, are absent from today's meeting.

-- By Greg Bump

The Joint Finance Committee will exec tomorrow on the CORE Jobs package proposed by Senate Democrats and vote on a handful of supplemental funding requests through the American Recovery and Reinvestment Act.

Among the 13.10 requests is one from the Department of Health Services to use nearly $5 million over the next two fiscal years to plan and implement a statewide health information exchange. In addition, DHS is requesting nearly $1.4 million to plan and develop a state Medicaid health information technology plan.

The DHS requests for ARRA money also include $2.4 million this fiscal year and $21.4 million in 2010-11 for obesity prevention and tobacco use prevention.

In addition, the Department of Workforce Development is requesting the use of $9 million in federal money for employment assistance and unemployment insurance administration.

The meeting begins at 10 a.m.

See the exec session agenda here.

See the 13.10 meeting agenda here.

See the LFB papers on the 13.10 requests here.

-- By Greg Bump

Department of Health Services Secretary Karen Timberlake says there are several pieces of federal legislation pending that could alleviate the potential $150 million GPR shortfall for the BadgerCare Plus and Childless Adults Core programs. But she said they are not counting on the federal government to bail the programs out.

"We can't sit back and wait," she told the Joint Finance Committee.

Timberlake is before the JFC to detail the agency's plan to cut more than $600 million in spending over this biennium. See details of the plan here.

See Timberlake's prepared remarks here.

The cut plan was devised before news of the shortfall in the state health coverage programs, which are experiencing higher than expected enrollment due to the downturn in the economy. Timberlake said many other states are facing the same difficulties, and that's why Congress may get involved.

Timberlake said the working groups that worked on the plan to cut the agency budget will be reconvened to come up with a plan to balance the budget in case the federal legislation fails.

"There are additional savings that can be achieved," she said.

Enrollment in BadgerCare Plus has averaged 687,000 individuals per month this fiscal year, above estimates included in the budget that assumed enrollment averages of 638,000 in 2009-10 and 648,000 in 2010-11. As of Nov. 30, about 700,000 individuals were enrolled in BadgerCare Plus, according to an LFB analysis.

GPR cost overruns from the higher than expected enrollment could range from $100 million to $125 million, according to the LFB.

Enrollment in the Childless Adults Core Plan was closed on Oct. 9 due to demand. The program was budgeted for 24,900 enrollees in FY 2010 and 39,500 in FY 2011. As of Nov. 30, 55,000 individuals were enrolled in the program, and a cost overrun for the biennium is estimated at $20 million to $25 million.

-- By Greg Bump

Department of Administration Deputy Secretary Dan Schooff and Republicans on the Joint Finance Committee today tangled over the impact of stimulus funds, with Republicans saying reports on jobs created by the federal American Recovery and Reinvestment Act are overblown.

Rep. Phil Montgomery, R-Ashwaubenon, disputed Schooff's accounting of how many of the 8,284 jobs reportedly created by the stimulus are private jobs. Schooff estimated that roughly half of those jobs were private sector in the energy and road construction fields, but he didn't have the exact breakdown with him today.

"I thought since you were coming to testify on this you would have brought those," said Montgomery, who said about 6,000 of the jobs created are in the public sector.

Rep. Robin Vos, R-Caledonia, said the federal government is "spending more money on ACORN" than on job creation.

Schooff said the next quarterly report on the state stimulus spending, which comes out in January, will have updated data.

Republicans also attacked the DOA and Office of Recovery and Reinvestment for inaccuracies in the reporting of job creation due to stimulus funds. But Schooff said those errors occurred on the federal level, and have been corrected by the feds.

Rep. Pedro Colon, D-Milwaukee, said from a Milwaukee perspective the stimulus has been successful.

"We've done very well," he said.

Sen. Alberta Darling, R-River Hills, said she would like more transparency and detailed information so she could tell her constituents what exactly the stimulus has done.

"What's been spent, how it's being spent. What difference is it making in the state of Wisconsin," Darling said.

"That seems very reasonable," Schooff said.

Executives from the state construction industry told JFC members today that the federal recovery act will save or create 54,000 jobs.

"It's nice to end a tough year with some hopeful news about jobs and economic recovery," said Madison Dem Rep. Mark Pocan, co-chair of the Joint Finance Committee, in a press release. "The work the Wisconsin legislature has done this year on jobs is accomplishing its goals is saving and creating jobs."

-- By Greg Bump

With plans already in place to cut more than $600 million in all funds from the state's health care programs, the state is facing potential cost overruns for the bienniums of up to $150 million in GPR for the BadgerCare Plus and Childless Adults Core Plan, according to an analysis by the Legislative Fiscal Bureau.

But the memo also notes pending federal legislation could result in additional federal matching dollars for medical assistance program from stimulus funds.

Enrollment in BadgerCare Plus has averaged 687,000 individuals per month this fiscal year, above estimates included in the budget that assumed enrollment averages of 638,000 in 2009-10 and 648,000 in 2010-11. As of Nov. 30, about 700,000 individuals were enrolled in BadgerCare Plus.

GPR cost overruns from the higher than expected enrollment could range from $100 million to $125 million, according to the LFB.

Enrollment in the Childless Adults Core Plan was closed on Oct. 9 due to demand. The program was budgeted for 24,900 enrollees in FY 2010 and 39,500 in FY 2011. As of Nov. 30, 55,000 individuals were enrolled in the program, and a cost overrun for the biennium is estimated at $20 million to $25 million.

The analysis notes that proposals in Congress could help mitigate those cost overruns. The federal health care reform bill passed by the House would provide $317 million in additional funds in FY 2011. The provision is not included in the bill currently being considered by the Senate, but the Senate has a separate bill that would provide a similar increase to the House proposal. But the LFB notes that whether either proposal "will become law cannot be said at this time."

Department of Health Services Secretary Karen Timberlake on Thursday will present to the Joint Finance Committee a 66-point plan to cut $608 million from the agency during the biennium as mandated in the biennial budget.

The plan includes delaying payments until 2011 and other one-time savings measures. Cuts to pharmacy costs, including saving $71.3 million by purchasing generic drugs, will provide $199.3 million in savings, according to the DHS plan. In addition, the plan proposes savings of $122.9 million through rate reductions to managed care programs.

See the LFB memo here.

The JFC will also be briefed Thursday on state use of federal funds made available through the American Recovery and Reinvestment Act.

Testifying before the committee will be Department of Administration Deputy Secretary Dan Schooff, Associated General Contractors Executive Vice President Robert Barker and Wisconsin Transportation Builders Association Executive Director Patrick Goss.

The Transportation Builders reported last month that the 2009-11 state budget for transportation infrastructure and remaining federal stimulus projects will support more than 28,500 jobs in the state over the next year.

The Thursday JFC meeting will also include a handful of 13.10 requests. See LFB papers on the requests here.

-- By Greg Bump

Wisconsin could be eligible for up to $250 million in federal education funding under the $4.35 billion "Race to the Top" program, according to the U.S. Department of Education.

Education Secretary Arne Duncan is kicking off the program today, and the department announced each state's potential intake of funding from the program. Wisconsin is listed as a Class 3 state, meaning it -- along with Virginia, Arizona, Indiana, Washington, Tennessee, Massachusetts, Missouri and Maryland -- could receive $150-$250 million under the program.

The Class 1 states -- California, Texas, New York, Florida -- could receive up to $700 million.

Gov. Doyle and state lawmakers have been working quickly to ensure the state's ability to acquire as much Race to the Top funding as possible, with the governor signing four education bills into law this week. Two more measures related to the program -- one to give the state superintendent greater authority over struggling districts, the other to place Milwaukee Public Schools under mayoral control -- are still being worked out in the Capitol.

-- By Andy Szal

DOA Secretary Michael Morgan issued the following statement responding to a Pew Center report that Wisconsin is among the most fiscally challenged states in the country:

"In no way can Wisconsin be compared to the nation's most financially troubled states, especially California.

"While Wisconsin has been affected, like all states, by the national economic downturn, we have balanced our budget by cutting spending and raising revenues as needed.

"In addition, recent reports have shown that many other states have large revenue shortfalls in the current fiscal year. But Wisconsin does not.

"The Pew Center report is factually inaccurate. From the outset, the report is fundamentally flawed.

"It is not true that the recession has hit Wisconsin harder than other states. While we have taken hits like everyone else, Wisconsin has fared much better than other states and manufacturing is doing better in Wisconsin compared to our neighboring states.

"While Wisconsin's unemployment rate increased during the national economic recession, again like all states, it is now improving and is more than two percentage points below the national average of 10.2 percent.

"Finally, the report fails to take into account many of the good budgetary practices of Wisconsin. For the first time in 32 years, the state's budget was finished on time. In spite of tough times, the budget the Governor signed cut spending from state general fund taxes by 2.5% and includes a $270 million surplus for the period that ends July 1, 2011.

"We have worked hard in Wisconsin to ensure that we can come out of this national economic recession in a strong position."

-- By Greg Bump

The Washington, D.C.-based nonprofit Pew Center on the States has identified Wisconsin as one of 10 states facing fiscal peril in a report released Wednesday.

The report -- which ranked states based on six factors that the Pew Center blamed for California's budget programs -- gave the Badger State a C+, the 10th worst grade in the nation. States were ranked by change in revenue, size of budget shortfall, change in unemployment rate, foreclosure rate, and the requirement for a supermajority.

Wisconsin was aided by the fact that lawmakers do not need a supermajority to enact tax increases or budget bills. But the state's budget shortfall was well above the national average, resulting in a fiscal climate that, according to the report, is worse than every state except California, Arizona, Rhode Island, Michigan, Oregon, Nevada, Florida, New Jersey and Illinois.

"(T)he recession has hit Wisconsin harder than most state governments, especially when it comes to lost tax revenues and the size of the hole in its budget. On top of that, unemployment is climbing as the state's largest sector -- manufacturing -- sputters," the report says. "Wisconsin's history of budget shortfalls and pattern of borrowing frequently to cover operating expenses, among other measures, made it poorly positioned to weather the most recent severe economic downturn."

See the press release here.

See the full report here.

-- By Andy Szal