fedgazette

Budget repair bill: up in smoke

Wisconsin State Roundup

Published September 1, 2002  |  September 2002 issue

After lengthy and rancorous deliberations, the Legislature and governor have signed off on a so-called budget repair that remedies a $1.1 billion shortfall in the state's biennial budget.

A special legislative session was called back in January and had to go to conference committee after the Senate and Assembly passed different bills. The conference committee spent almost three months sifting through 315 items of disagreement between the two proposals, many of which were small projects or items sought by individual legislators. Compounding the problem was an acrimonious relationship between party leaders at the negotiating table.

The new bill—which modifies the existing two-year budget bill—punted much of the problem into the next biennium budget. It handed out cuts totaling $104 million to state agencies and about $44 million to the University of Wisconsin System. It largely jettisoned Gov. Scott McCallum's controversial proposal to wean local communities from $1 billion in state aid over a steep three-year curve, cutting only $40 million from local aid.

Filling the biggest part of the hole was tobacco money. The state had previously sold the rights to future tobacco settlements for a lump sum payment of $1.3 billion. It had already used about $450 million in the original state budget, and the rest was to go into an endowment fund. But budget negotiators decided otherwise, eliminating the endowment fund and using the $825 million to cover the deficit.

Though it balances the books for the remainder of this biennium, the repair bill essentially ignored the structural part of the budget shortfall—slower state tax revenue stemming from the recession and Sept. 11. Budget forecasters are already predicting a shortfall of between $1 billion and $3 billion for the next two-year budget.

One of the other major riders in the repair bill was a campaign finance reform package that would create a public financing system for state offices through a $20 checkoff on income tax returns. It also requires independent parties to report if they are going to run ads for or against a particular candidate within 30 days of the election, and how much they plan to spend on the ads. But the new law does not apply to any of this year's state elections, including what may be easily the most expensive gubernatorial race in state history.

Ronald A. Wirtz

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