Paying Our Bills, Restoring Budget Stability

A few weeks ago, we received news that state revenue collections have increased above expectations by $233 million over the last few months.  While that naturally triggered a flood of Madison special interest demands to spend these taxpayer dollars on new and expanded government programs, Republicans in the State Capitol have no such intentions.  Instead, we plan to use the money to pay bills incurred by the previous governor’s administration.

Introduced as Assembly Bill 148, our plan does a number of things.  First and foremost, AB 148 directs the state to pay back the illegal 2007 raid of the Injured Patients and Families Compensation Fund within one year.  The bill will direct the payment of $200 million to the IPFCF while also setting aside $35 million for anticipated interest charges.

AB 148 also captures additional federal Medicaid funds through simple fiscal responsibility.  By making our June payment on time and our July payment early, we save an additional $23 million in federal Medicaid funds for Wisconsin.  Were we to make the payment in July as usual, we would be on the hook for $170 million.  Making it before the end of June, however, reduces that payment to $147 million.

Another important piece of this fiscal plan is the offset of $30 million in state employee pension and health insurance benefit savings that will not be realized due to the delay in the implementation of Act 10, the budget repair bill from earlier this year.  Act 10 continues to be bogged down in court.

AB 148 also pays for required-yet-unfunded department lapses that were passed as a part of the last state budget.  One of the ways in which the previous governor “balanced” his budget was to require state agencies to “lapse” $641 million back to the state’s General Fund.  However, no plan was put into place ahead of time on where the money would come from and we are now in the position of having to fulfill the remainder of this obligation.  Through action earlier this year, we were successful in reducing remaining lapses to $262 million and we will draw that number down by another $54 million under AB 148.

Our plan to pay the bills is an honest proposal that greatly helps our state’s long-term fiscal health.  Republicans remain committed to real budget reform – not making matters worse by squandering unexpected revenues like a kid in a candy store.  We have to remember that we still face a multi-billion dollar budget deficit and many painful decisions are still to be made.  Paying our bills and meeting our current obligations today – not creating new ones that will leave even more fiscal problems for our children and grandchildren – ensures a more fiscally sound Wisconsin tomorrow.

To contact me with any questions or comments or to sign up for my regular e-updates, please send an e-mail to Rep.Knodl@legis.wi.gov or call me at (608) 266-3796.