Assembly Budget Plan Would Delay School Aid Payments

The GOP-run Assembly late Wednesday night OK'd its version of a budget repair bill that includes a delay in school aid payments to local school districts across the state.

The Assembly plan, passed on a 51-46 vote, also calls for across-the-board general purpose revenue cuts and taking money out of the budget stabilization fund and reducing the statutory balance.

The Senate will not take up the governor's budget repair bill today and has no plans to offer its own version, a spokeswoman for Senate Majority Leader Russ Decker said this morning. Decker spokeswoman Carrie Lynch said the Senate plans a full hearing on a budget fix before a floor vote.

Rep. Jim Kreuser, Assembly Democratic Leader, said Assembly Democrats remain willing to engage in bipartisan talks to find an acceptable solution.

The Assembly plan leaves the state with a net balance of $9 million at the end of the 2007-09 biennium by generating an additional $425 million, eliminating the projected $416 million negative balance at the end of the biennium. This is accomplished as follows:

• $125 million school aid payment pushed off to the next biennium.
• $250 million generated from lapses or transfers from general purpose revenue compensation reserves and appropriations other than general school aids and sum sufficient appropriations (such as funding for the Milwaukee private school voucher program and independent 2r charter schools).  This provision would leave vulnerable the $40 million increase in categorical aids in fiscal year 2008-09 approved under the biennial state budget act, including $3.6 million for sparsity aid, $10 million for boosting student achievement in Milwaukee Public Schools, $18.7 million in special education aid and $3 million for 4-year-old kindergarten grants. It also threatens $93.8 million in compensation reserves for state employee raises.
• $55 million transferred out of the budget stabilization fund, leaving $2.5 million.
• $45 million achieved by reducing the required statutory balance from $65 million to $20 million.
• A $50 million reduction to the general fund by eliminating some of the lapses from executive branch agencies required under the 2007-09 state budget act.

Senate Majority Leader Russ Decker released a statement today saying that the Assembly's plan offers no real long-term solutions and balances the budget "on the backs of school kids."

"This is an old budget gimmick that digs the budget hole deeper for next year," Decker said. "Republicans need to stop playing games with the schools in this state. Last year they delayed payments to schools by proposing a plan that would slash school spending and raise property taxes and now they are trying to delay the payments again for next year."

Governor Jim Doyle on Monday unveiled his plan to address the state’s budget shortfall. His proposal calls for the state to repair the budget with a hospital assessment, transportation fund transfers, reductions in executive branch appropriations and closure of a corporate tax loophole exploited by Wal-Mart.

Decker said Assembly Republicans didn't even consider the governor's proposal to close corporate loopholes. "The Assembly Republicans picked Wal-Mart over the school kids, businesses and residents of our state," he said. "Instead of asking profitable out-of-state companies to pay their fair share... they told school districts to just hold their breath and hope they get the money they are owed next year," he said.

The Legislative Fiscal Bureau has projected a $652.3 million shortfall for the biennium due to falling revenues. Doyle’s administration has already addressed a little more than $125 million of that through a change on payments for some short-term bonds.

Related articles:
“State faces 'tough choices' to address budget deficit” [2/15/08]

Posted March 11, 2008; Updated March 13, 2008