Wisconsin is facing a potential $3.6 billion shortfall for its next biennium, or two-year budget cycle, according to figures released by the nonpartisan Legislative Fiscal Bureau in January. The budget period begins on July 1, 2011, and ends on June 30, 2013. That figure is more than $2 billion less than the $5.9 billion projected deficit that former Democratic Gov. Jim Doyle had to tackle at the beginning of the 2009-2011 fiscal cycle. So, that was not quite "double" the deficit that Walker is potentially looking at, as our reader was told.
Doyle was able to erase a large portion of his projected gap through a series of spending cuts and tax increases. But funds from the American Recovery and Reinvestment Act — known as the stimulus act — also played a significant part in easing the state’s budget woes. More than $2 billion in stimulus funds were used to narrow the budget gap for the 2009-2011 cycle. That’s money the state will have to do without this time around, since those funds run out at the end of June, according to Robert Lang, the fiscal bureau director.
And the state’s financial business hasn’t been completely settled for the current fiscal cycle, either. Walker is trying to find a way to fill a projected $137 million gap for the remainder of the 2011 fiscal year. His controversial budget repair bill seeks to do so, in part, by increasing state worker contributions for pension and health benefits, among other things.
A false claim that the state would end this fiscal year with a surplus stems from a misreading by some — including MSNBC’s Rachel Maddow — of a memo issued in January by the Legislative Fiscal Bureau showing a $121 million gross balance in the state’s general accounting fund. That figure, however, doesn’t factor in more than $170 million for Medicaid services, or $21 million for corrections programs, that haven’t been funded. It also doesn’t include more than $58 million Wisconsin owes the state of Minnesota for a tax reciprocity deal involving income tax collected from Wisconsin residents who worked in Minnesota. Lang told us in an e-mail that those amounts were not reflected in the January memo, because they would require further action from the Legislature and the governor. Dealing with those costs before the end of June would push the general fund into the negative, he said.
The fiscal bureau says the bill being pushed by Walker would address funding for the Medicaid and corrections shortfalls, but wouldn’t address the outstanding payments to Minnesota, or an additional $3.5 million shortfall in appropriations for the state public defender’s office.