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budget

Bait and Switch?

Walker's budget plans don't fix what he says is the crisis.

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Republican Gov. Scott Walker has kicked off a firestorm with his budget proposals, but his most controversial plans wouldn't address this fiscal year's shortfall.

Updated at 8:10 a.m. on February 23.

Why now?

 

Wisconsin Gov. Scott Walker has sparked massive protests by proposing to curtail public-employee unions and give his administration the power to cut back health care and sell state public utilities through no-bid contracts.

But while Walker argues that his budget-repair legislation must be passed soon to avoid job cuts, the most controversial parts of his bill would have no immediate effect.

The state’s entire budget shortfall for this year -- the reason that Walker has said he must push through immediate cuts -- would be covered by the governor's relatively uncontroversial proposal to restructure the state’s debt.

 

By contrast, the proposals that have kicked up a firestorm, especially his call to curtail the collective-bargaining rights of the state's public-employees, wouldn't save any money this year.

“What we’re asking for is modest, at least to those of us outside of government,” Walker said in a televised address Tuesday night.

In January, the Wisconsin Legislative Fiscal Bureau reported that the state would face a $137 million shortfall before the end of the fiscal year on June 30. The governor’s budget repair bill proposes a debt restructuring that would save the state $165 million in the near term, more than covering the shortfall.

The legislation would also borrow money from a federal welfare program to cover further state shortfalls, and it includes a provision that would allow the sale of the state’s public utilities without a bidding process or public oversight.

 

While public unions have agreed to almost $30 million in pay cuts this year if they can keep their bargaining rights, Walker and other Republicans argue that restrictions on union bargaining are necessary to maintain the cuts over time.

Democrats say that there is no reason to make such sweeping changes before the start of the regular budget process, which will need to address the much bigger projected deficit of $3.6 billion between 2011 and 2013 (Wisconsin follows a two-year budget process). Walker delayed introducing his first budget today to campaign for the fiscal fix legislation.

“Let’s have hearings!” Rep. Peter Barca, the Democratic minority leader in the Wisconsin House, said in a speech criticizing the governor’s timetable. “If you don’t want to send this to committee and allow for more hearings... let’s pull the policy out [of this fiscal bill].”

The bill includes a provision that would allow the state to sell or contract out the operation of heating, cooling, and power plants without a bidding process and without consulting the state’s independent utility regulator. Democratic legislators worried aloud that the process would attract abuse, and Jon Peacock, director of the Wisconsin Budget Project, called the no-bid approach a “red flag.”

The bill also employs “emergency” powers that would allow the governor’s appointed health secretary to redefine the foundations of the state’s Medicaid program, Badgercare, ranging from eligibility to premiums, with only passive legislative review. The attorney in the legislature’s nonpartisan reference bureau who prepared the bill warned that a court could invalidate the statute for violating separation of powers doctrine.

The legislation, the lawyer wrote in a “drafter’s note” about the bill, would allow the state Department of Health Services to “change any Medical Assistance law, for any reason, at any time, and potentially without notice or public hearing... in addition to eliminating notice and publication requirements, [the changes] would leave the emergency rules in effect without any requirement to make permanent rules and without any time limit.”

“Our basic point is, why do that in a bill that’s being rushed through the legislature in a week’s time that could really stand a more deliberative review?” Peacock says. “We need to find ways to reduce the cost of Medicaid, [but] we expect legislators to make those decisions and be accountable to their constituents for those decisions.”

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