State Budget Update: Budget Repair Bill and 2011-13 Biennial Budget Deficit Detailed

The Walker Administration is expected to release late this week its plan for eliminating an estimated $136.7 million revenue shortfall in the state budget that expires June 30. Legislative Republicans are to be briefed on the plan Thursday.
According to a memo released by Gov. Walker’s office on Monday, the state expects to have $121.4 million available through June 30, with $258 million in revenue shortfalls. The memo appears to use all of the anticipated revenues to offset the deficit, leaving the state $136.7 million short for the fiscal year.


Here are the items included in the deficit:
·       $58.7 million in tax reciprocity payments and interest owed to Minnesota.
·       $153.2 million in the Medical Assistance Programs.
·       $16 million in Medical Assistance administrative services.
·       $5 million in Income Maintenance activities.
·       $3.5 million in State Public Defender’s Office.
·       $21.7 million in the Dept of Corrections.


Not included is a $200 million repayment to the Injured Patients and Family Compensation Fund, which has been ordered by the State Supreme Court, but the actual timing of the repayments is currently before a Dane County circuit court, which must determine the value of the money taken from the fund and amount of interest to be added to the $200.
Indications are Walker will propose refinancing some state debt and requiring state employees to begin making higher health care insurance payments and paying part of their retirement benefits as part of the deficit reduction plan. Changes in the SeniorCare program may also be proposed.


Walker and legislative leaders hope to introduce the bill into an extraordinary session of the Legislature on Friday, with the Joint Finance Committee taking the bill up as early as Tuesday and the full Legislature by Thursday.
Walker is scheduled to deliver his proposed 2011-13 biennial budget to a joint session of the Legislature on Feb. 22.
 

Please click here for the Walker deficit memo

2011-13 Biennial Budget Deficit Detailed

State Budget Director Brian Hayes, in a memo to DOA Secretary Mike Huebsch, said the Walker Administration faces a budget deficit of more than $3.6 billion in the next biennium. The figures represent what Hayes calls a “General Fund Condition Statement under realistic agency budget request assumptions (adjustments made for Medicaid and state agency lapse estimates.)

At the same time, Hayes provided Huebsch with a “General Fund Condition Statement under basic cost-to-continue assumptions (adjusted base appropriations, debt service reestimates, and standard budget adjustments to reflect current employee salary and fringe benefit levels).


Hayes said adjustments to “rectify unrealistic assumptions included in certain agency budget requests submitted to the Department of Administration on September 15, 2010” include:
· Adding $1.2 billion to the Dept of Health Services budget request “to reflect questionable caseload and federal aid assumptions in the Medicaid program.
· Removes over $800 million in assumed lapses included in the Dept of Administration budget request for prospective cuts.
Hayes said agency budget requests added $2.9 million to basic cost-to-continue, with nearly two-thirds of the increase for Medicaid, with much of that amount associated with replacing one-time federal Medicaid revenues under the federal American Recovery and Reinvestment Act of 2009.


Please click here for Hayes memo

Milwaukee Journal Sentinel