Wisconsin state budget (2010-2011)

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Wisconsin faces a budget shortfall of $137 million for the current FY2011.[1] Gov. Scott Walker proposed budget cuts to balance the state's budget, and a bill related to collective bargaining by unions triggered days of protests in the state capitol.[1]

Wisconsin had a total state debt of $17,971,519,547 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap as of July 2010.[2]

2011 State spending & deficit in billions[3]
Total spending Healthcare Education Protection Works and economic support Other
$14.2 $1.4 $6.4 $1 $0.15 $5.25
2011 Local spending & deficit in billions[4]
Total spending Pension Healthcare Education Welfare Protection Transport Deficit
$38.5 $0.4 $1.5 $11.7 $2.5 $3 $3.4 $18

Fiscal Years 2010-2011 State Budget

See also: Archived Wisconsin state budgets

Find the state’s FY2011 Comprehensive Annual Financial Report (CAFR) compiled by the state government online.[5]

The Legislative Fiscal Bureau estimated in January 2011 that the state would end FY2011 with $12.7 billion in taxes collected, less than the projected $13.4 billion.[6]

The state's general fund was expected to be $265 million short, reporting $71 million for the closing of the 2009-2010 financial year, instead of the expected $336 million.[7]

Governor-elect Scott Walker asked the Democrat-controlled legislature to not approve labor contracts with state employees before he takes office and the Republicans gain control of the legislature, but Democrats had said they plan to take up the no-pay-increase contracts because the contracts cover the current budget period.[8] Governor-elect Walker countered, saying that the contracts should be left to him and Republicans because they had an effect on the next budget, which faces a shortfall of up to $3.3 billion.[8] Walker had also called on state unions to pay more for their health care and pensions, saying it would help the state deal with a possible budget shortfall of $150 million or more.[9]

Gov. Jim Doyle signed the 2009-2011 biennium budget on June 29, 2009, vetoing a 0.65 percent sales tax in Milwaukee County and killing the proposed transit authority for the county passed by the Wisconsin State Legislature. Overall, the new state budget cuts overall spending by $3 billion, doing so while cutting 1,000 state employees, imposing across-the-board budget cuts for state agencies and the rolling back of 2 percent pay raises for state employees that were to take effect this month. State agencies also were directed to review all service contracts to reduce personnel costs.[10][11]

A July 20, 2010, ruling by the Wisconsin Supreme Court held that state must repay a medical malpractice fund more than $200 million it took to balance the budget three years ago.[12] The ruling potentially throwing the current budget into disarray, because the state budget was projected to finish Fiscal Year 2011 on June 30, 2010, with a balance of $45 million. Repaying the $200 million leaves the state with a deficit.[12]

The Pew report pinned Wisconsin's budget problems, in part, on the loss of 140,000 jobs and one-eighth of its manufacturing workforce in the current recession. The lagging economy drove down tax collections 11.2%, comparing the first quarter of 2008 with the first quarter of 2009, according to the report. Gov. Jim Doyle and the state Legislature began the 2009-'11 budget process with a $6.6 billion shortfall. They filled the hole with $2.1 billion in tax and fee increases, $2.2 billion in federal stimulus dollars and cuts in state agency spending and aid to local governments and schools. The report predicts the 2011-'13 budget would start with a structural deficit of $2 billion, and the slow economy was not likely to produce tax revenues to fill that gap. State numbers show tax revenues from July through September trailed the collection a year ago by 8%.[13]

The Pew report noted:[14] "The budget would have fallen short even without the national economic crisis, although the recession made the state deficit much larger than expected, said Andrew Reschovsky, professor of public affairs and applied economics at the University of Wisconsin at Madison. Federal stimulus funds of $2.2 billion helped plug some budget shortfalls this year. For the rest, lawmakers raised taxes on the wealthy, hospitals and smokers, and cut spending by $3 billion, mostly by cutting salaries for state employees.286 Experts predict Wisconsin could face a $2 billion deficit during the next biennium, which starts July 1, 2011, after the federal stimulus runs out."

The state received approximately $408 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.[15] $194 million of that money was for Medicaid.[16][17]

Summary of 2009-11 Appropriations and Authorizations[18]

Fund Source FY 2010 FY 2011 Total % of Total
General Purpose Revenues $13,470,870,900 $14,200,780,300 $27,671,651,200 42.1%
Federal Revenue $9,380,918,100 $8,809,515,000 $18,190,433,100 27.7%
Program Revenue $4,296,691,900 $4,403,424,200 $8,700,116,100 13.2%
Segregated Revenue $3,844,369,800 $3,785,542,100 $7,629,911,900 11.6%
Bond Revenue $3,581,172,100 5.4%
Total $65,773,284,400 100.0%


2009-11 All Fund Appropriations by Functional Area[18]

Functional Area Amount  % of Total
Education $23,181,424,300 37.3%
Human Relations and Resources 22,502,889,300 36.2%
Environmental Resources 6,863,414,600 11.0%
Shared Revenue and Tax Relief 4,719,345,800 7.6%
General Executive 2,724,505,100 4.4%
Commerce 912,178,000 1.5%
General Appropriations 515,153,500 0.8%
Compensation Reserves 351,141,700 0.6%
Judicial 274,324,500 0.4%
Legislative 147,735,500 0.2%
TOTAL $62,192,112,300 100.0%

The state plans to set aside 2.3% of revenue as reserves this year, as compared to a national average of 6.2 percent.[19]

Wisconsin was rated by the Pew Center on the States in November 2009 among the top ten states with budget problems, citing the practice of taking money from the transportation fund (then borrowed to cover the transportation budget) to fill gaps in education and day-to-day operations, and running negative balances in the general fund for five straight years, before the recession. State Sen. Alberta Darling (R-River Hills) said the Pew analysis hit the mark in identifying the consequences the state faces for spending more money than it collects and adding programs while the overall economy was in a recession. Total spending in the 2009-'11 budget was up 6.2%, to roughly $65 billion, a level of spending "that was unsustainable," Darling said. "It's practically a textbook case of how not to engage in fiscal policy and budget-making," Mordecai Lee, professor of government affairs at UW-Milwaukee, says in the Pew report. "Structurally, we were around the corner of becoming like California."[20] The state ended the FY2009 with a $2.71 billion budget deficit, 8.4% more than the prior year's deficit, according to a state report.[21][22]

Wisconsin was also the nation’s fourth most indebted state, per capita, for unemployment cost which had exceeded $1.4 billion.[23]

Maintenance of Effort Rule

The budget included a "maintenance of effort" rule, which requires municipalities and counties spend at least as much on police and fire services as they did in 2009. If local government fail to meet that spending level, they could lose some of the tax money the state annually returns to them.[24]

Budget background

See also: Wisconsin state budget

Wisconsin operates on a biennium, covering two fiscal years at a time. A fiscal year begins on July 1 and ends on June 30 of the following year with the biennium starting July 1 of odd-numbered years. Agency budget requests were submitted in September of even-numbered years. During the following months, the Governor meets with the departments and agencies to hear their budget proposals for the following fiscal year. Following the hearings the Governor issues a budget recommendation for the upcoming fiscal year to the Legislature. Both the State Assembly and the Senate were required to make any necessary changes or adjustments to the budget until the bill was passed in both houses.[25] When the Lesgislature passes the bill the Governor approve of the bill as a whole, veto the entire bill or execute line-item vetoes.[26] Gov. Doyle signed the FY 2010-2011 biennial budget (covering July 1, 2009 to June 30, 2011) with 81 vetoes.[27]

Budget figures

The following table provides a history of Wisconsin's expenditures and gross domestic product (GDP).

Fiscal Year Expenditures (billions) GDP (billions)
2000 $34.5[28] $175.7[28]
2001 $36.9[28] $180.9[28]
2002 $39.3[28] $188.6[28]
2003 $40.8[28] $195.9[28]
2004 $42.4[28] $205.9[28]
2005 $43.1[28] $214.1[28]
2006 $45.3[28] $223.4[28]
2007 $47.5[28] $232.3[28]
2008 $49.9[28] $241.5[28]
2009 $52.4*[28] $251.2*[28]

Accounting principles

See also:Wisconsin government accounting principles

The Wisconsin Legislative Audit Bureau was a nonpartisan legislative service agency created to assist the Legislature in maintaining oversight of state operations. The director of the Legislative Audit Bureau was Janice Mueller the State Auditor, who was appointed by the Legislature's Joint Committee on Legislative Organization. The Bureau conducts objective audits and evaluations of state agency operations to ensure financial transactions had been made in a legal and proper manner and to determine whether programs were administered effectively, efficiently, and in accordance with the policies of the Legislature and the Governor. The results of these evaluations were provided to the Legislature, along with recommendations for improvements in agency operations. The Legislative Audit Bureau was created by Chapter 659, Laws of Wisconsin 1965. Prior to the creation of the Bureau, financial audits were performed by the Department of State Audit, an executive branch department created in 1947. The Legislative Audit Bureau was organized into four sections: Financial Audit, Program Evaluation, Information Systems Support, and Administrative Services.[29][30]

The Institute for Truth in Accounting (IFTA) rates Wisconsin “Timely” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA did not consider Wisconsin's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis did not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[31] Wisconsin's CAFRs were publications of the Wisconsin Department of Administration, Division of Executive Budget and Finance, State Controller's Office. Stephen J. Censky was State Controller. Michael Morgan was Secretary of Department of Administration.[32][33]

Credit Rating Fitch Moody's S&P
Wisconsin[34] AA- Aa3 AA

Economic Stimulus Package

Wisconsin would receive approximately $209 million from the federal government under HR 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.[35][17]

Wisconsin was expected to receive $3.8 billion from the $787 billion dollar economic stimulus of 2009.[36] All told, the federal stimulus plan would create or save 70,000 jobs in Wisconsin, based on White House estimates.[37]



According to preliminary reports Wisconsin was expected to receive:[36]

  • $1.2 billion towards Medicaid
  • $107 million for the Clean Water State Revolving Fund
  • $529 million for highway funding
  • $81 million for transit
  • $27 million for homelessness prevention
  • $55 million towards the state energy program
  • $144 million towards weatherization
  • $9 million towards Head Start
  • $717 million towards the education stabilization fund
  • $180 million towards Title I education for the disadvantaged
  • $8 million for education technology

Budget transparency

Wisconsin had no government-sponsored state spending database. As mentioned below, Milwaukee residents had some level of transparency, thanks to the independent transparency site hosted by Citizens for Responsible Government (CRG).

See also: Wisconsin Rep. Molepske re-introduces Open Government Act'

Government tools

The following table was helpful in evaluating the level of transparency provided by a state spending and transparency database:

Criteria for evaluating spending databases
State Database Searchability Grants Contracts Line Item Expenditures Dept/Agency Budgets Public Employee Salary Exemption Level
None n/a n/a n/a n/a n/a n/a n/a
See also: Evaluation of Wisconsin state website

Economic stimulus transparency

  • The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it was estimated that 69%, or over $541 billion, would be administered by state governments.[38]
  • Wisconsin was to receive an estimated $2,495,140,902 of the Economic Recovery and Reinvestment Act of 2009.[39]
  • Wisconsin established an economic recovery website to show how legislators and government officials in Wisconsin were spending Federal funds.[40]

Independent transparency sites

The Citizens for Responsible Government (CRG) group sponsors the Government Accountability in Spending Project, a movement to place all of Wisconsin’s government spending online in a searchable database format. The group was focusing on the Milwaukee area, and had a database of agency expenditures and vendors. Thanks to CRG efforts, information from the Milwaukee Public Schools was available. As of September 15, 2008, the Milwaukee Area Technical College District financial data had been placed online.[41][42]

Public employee salary information

The City of Appleton posts public employee salary information online.[43]

The Wisconsin Department of Public Instruction posted all public school staff salary and benefits data.[44]

See also

Wisconsin government sector lobbying
Wisconsin state budget
Wisconsin public pensions

External links

Additional reading

References

  1. 1.0 1.1 New York Times "Democrats Missing, Wisconsin Vote on Cuts was Delayed" Feb. 17, 2011
  2. State Budget Solutions “States Hide Trillions in Debt” July 22, 2010
  3. Wisconsin Department of Administration, Budget in Brief
  4. USA Spending, State Guesstimated* Government Spending
  5. FY2011 CAFR
  6. The Green Bay Press Gazette "Flawed Wisconsin revenue projections were factor in deficit" May 1, 2011
  7. Watchdog, Wisconsin’s General Fund Balance $265 Million Below Estimates Medicaid Spending $207 Million More than Budgeted, Oct. 20, 2010
  8. 8.0 8.1 The Milwaukee Journal Sentinel "Walker asks lawmakers to halt work on labor contracts" Nov. 29, 2010
  9. Bloomberg "Wis.-Gov.-elect renews calls for union concessions" Dec. 8, 2010
  10. The Business Journal of Milwaukee, June 29, 2009
  11. 2009-2011 biennium budget
  12. 12.0 12.1 "Court says Wis. must repay malpractice fund $200M" July 20, 2010
  13. The Journal Sentinel, "Wisconsin budget rated in worst 10," November 11, 2009
  14. Pew Center on the States, "Beyond California: States in Fiscal Peril," November 2009
  15. Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  16. Cite error: Invalid <ref> tag; no text was provided for refs named illegal
  17. 17.0 17.1 H.R. 1586
  18. 18.0 18.1 Wisconsin Legislative Fiscal Bureau, "2009-11 State Budget: Summary Tables and Charts," July 22, 2009
  19. Milwaukee News Buzz "Who'll stop the rain" Aug. 30, 2010
  20. The Journal Sentinel, "Wisconsin budget rated in worst 10," November 11, 2009
  21. Wisconsin State Journal "Deficit in Wisconsin up 8.4% from year before" January 3, 2010
  22. Pew Center on the States
  23. Watchdog, Wisconsin’s Unemployment Debt Among Nation’s Worst, Aug. 4, 2010
  24. The Post Crescent "Maintenance of effort law affects municipal budgets" July 18, 2010
  25. Mental Health America of Wisconsin,"Wisconsin budget process," accessed March 18,2009
  26. State of Wisconsin,"The Wisconsin Biennial Budget Process Overview of Governmental Structure," accessed March 18,2009
  27. National Conference of State Legislatures, "Fiscal Year 2010 Budget Status," November 2, 2009
  28. 28.00 28.01 28.02 28.03 28.04 28.05 28.06 28.07 28.08 28.09 28.10 28.11 28.12 28.13 28.14 28.15 28.16 28.17 28.18 28.19 US Government Spending,"Wisconsin State and Local spending," accessed March 18,2009
  29. The Wisconsin Legislative Audit Bureau Web site, retrieved November 18, 2009
  30. audits and evaluations
  31. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  32. Wisconsin Department of Administration Web site, retrieved November 18, 2009
  33. CAFRs
  34. State of Indiana, “State Credit Ratings-as of June 24, 2009"
  35. Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  36. 36.0 36.1 State of Wisconsin,"American Recovery and Reinvestment Act Estimates for the State of Wisconsin," accessed March 18,2009
  37. American Recovery and Reinvestment Act,"Estimated job effect," accessed March 18,2009
  38. National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
  39. Wall Street Journal,"Stimulus Spending by State," March 12,2009
  40. Recovery Wisconsin
  41. Citizens for Responsible Government, "Milwaukee County GASP Database"
  42. Milwaukee Public Schools Spending Reports
  43. Appleton public employee salaries
  44. Wisconsin DPI public school staff salaries