Every budget year, the legislature’s Joint Finance Committee and its non-partisan budget office, the Legislative Fiscal Bureau (“LFB”), must complete a number of routine – if not ministerial – tasks prior to taking a single vote on the budget bill. Typically, those actions are bookended by the JFC receiving budget briefings from major agencies and cabinet-level departments, (held March 2, 3, and 4), and a series of public hearings on the budget bill, (held March 18, 20, 23 and 25). In between, however, a number of other important actions are completed, including the LFB’s release of a budget summary, and numerous other reports detailing tax and fee modifications, the use of fund transfers, and a general fund condition statement.
This budget cycle, that process was completed nearly three weeks ahead of schedule as compared to recent budgets, and is consistent with the Governor’s and Legislature’s stated desire to complete budget deliberations no later than June 31, 2015, if not earlier. However, four key issues have emerged that could prevent an on-time budget for the first time since Scott Walker was elected Governor. Those issues include:
- K-12 funding and the expansion of the statewide school voucher program.
- Spending and revenue-generating alternatives for the state’s transportation fund.
- Cuts to the University of Wisconsin System.
- State-local financial support for a new arena for the Milwaukee Bucks.
Although July 1, 2015 marks the statutory deadline for adopting a new budget, there are only minor consequences if the legislature fails complete its work by that date. Unlike the federal government, which shuts down if a new budget is not adopted by Congress, state government continues to operate on a cost-to-continue basis until a budget is signed into law. With few exceptions, most state programs can operate on a cost-to-continue budget for many months before facing a funding crisis. One exception is the Medicaid program, a sum-sufficient appropriation, which requires the government fund all program expenditures on a routine basis. Oftentimes, the Medicaid program faces programmatic increases in the hundreds of millions of dollars from one biennium to the next and, without the authority to implement cost-saving measures, the Department of Health Services can quickly find that it lacks the resources to pay its bills.
Still, the smart money is on the passage of an on time budget. Late budgets have become somewhat of an anomaly, with the last one occurring in 2009 when Democrats controlled the Senate and Republicans controlled the Assembly and a stalemate emerged. Already, legislative leaders have hinted at plans to reduce the cut to the UW System (while scuttling the Governor’s proposal to give it greater independence); identified alternative funding mechanisms for the Milwaukee Bucks’ arena; and, pledged to increase K-12 spending with the new revenue likely to be revealed by the LFB’s revenue estimates to be released in May.
Despite this progress towards resolving some of the budget’s major issues, however, this year doesn’t have quite the same feel as recent budgets that, by comparison, seemed to sail through the legislature. Democrats and Republicans alike have indicated that some of the Governor’s cost-saving proposals – like scaling-back Senior Care and revamping Family Care – are all but dead. It’s unclear whether the Senate and the Assembly share the same vision for K-12 spending, UW System or the Bucks. There has been little progress towards a palatable solution to the transportation funding crisis. And, while the LFB’s revenue estimates are likely to produce additional revenue, it’s not likely to produce a windfall as it did during the 2013-15 budget deliberations. This year’s revenue estimates are expected to be more in the order of saving a few programs slated for elimination than authorizing historic property tax cuts.
The bottom line is that there’s a lot in this budget that both parties want to change. While the budget deficit facing the state isn’t as severe as it has been in recent years, there are more programs on the table to be saved---and that costs money, money that is yet to materialize. So, while a number of the JFC’s statutorily required functions may be behind it, the real heavy lifting is yet to begin. And this year, that may mean that there is some extra time before the first vote is ever taken.