Despite a projected $5.7 billion state deficit in the next fiscal year, lawmakers Monday unveiled a plan to decrease the over $600 million current deficit that still needs to be solved by June 30.
The proposal does not solve this year's deficit, but reduces it by $183 million, according to analysis by the state's Legislative Fiscal Bureau. The proposal does not mention cuts to the UW System, meaning any reductions will be announced in the larger budget package Gov. Jim Doyle will unveil Tuesday.
According to Andrew Reschovsky, a public affairs and applied economics professor at UW-Madison, lawmakers tried fixing this fiscal year's shortfall earlier in the year, but the underperforming economy continues to reduce tax revenues.
He said a repair bill is more difficult to create now than earlier in the fiscal period.
Cutting spending in the last two months is particularly difficult,"" he said. ""You can't tell people 'sorry, you have to pay higher tuition for the months of March and April' or tell a teaching assistant 'you're fired' halfway through the semester.""
Under state law, Wisconsin must maintain a $65 million ""rainy day"" fund in case of financial emergencies. The proposal shown today eliminates the statute for this year.
Reschovsky said many states use similar financial maneuvering in tough economic times and said while a ""rainy day"" fund is smart policy in a strong economy, the current crisis likely forced lawmakers to eliminate the provision to not raise taxes by $65 million.
He said states with large rainy day funds, upward of $1.4 billion, were still not able to stop the fiscal downturns in 2002 to 2004 and the looming national economic crisis is substantially larger than that episode.
Lawmakers and residents could only speculate Monday on what they hope is in Doyle's larger bill.
State Assembly Majority Leader Tom Nelson, D-Kaukauna, said he is hopeful Doyle will present a budget that prioritizes state infrastructure, fire services and police but that still recognizes ""families are cutting their budgets, and we're going to be cutting our budgets, too.""
State Rep. Phil Montgomery, R-Green Bay, said Doyle's proposal Tuesday would be full of tax increases and Doyle needs to ""take responsibility for getting us into this mess.""
- Caitlin Gath contributed to this report
