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Doyle directs state agencies to cut $270 million

Steven Elbow  —  7/03/2008 1:33 pm

Gov. Jim Doyle's administration capped a drawn-out budget fix Thursday by telling state agencies to implement a total of $270 million in cuts.

A memo issued Thursday from Doyle's budget director, David Schmiedicke, said the administration directed the Department of Transportation to absorb $103 million of the shortfall in the budget fix signed by Doyle in May, which addressed a $527 million hole in the 2007-09 budget. The shortfall was the result of lagging tax receipts because of the ailing economy.

"Most agencies would be looking at, I would imagine, holding positions vacant, prioritizing their purchasing, things like that," Schmiedicke said in an interview.

The agencies have until Nov. 17 to submit plans for specific cuts.

The transportation cuts will be partially offset by $39 million in previously authorized revenue bonds, Schmiedicke said. The remaining $64 million in cuts would not affect any high-profile projects, he said, but the department might have to put some lower priority projects on hold.

"Just to put it into context, that $64 million they'll have to find will be coming out of about a $526 million increase in highway spending compared with the previous biennium," he said.

The state's newly reorganized Department of Health Services, formerly the Department of Health and Family Services, was directed to slash $13.7 million from its budget, and $53 million from its Medicaid programs.

Schmiedicke said the Medicaid cuts will be covered in part by federal reimbursement for program costs, savings in prescription drugs costs and other measures.

The University of Wisconsin System will take a $25 million hit. UW System spokesman David Giroux said it's too early to say where the university cuts would be coming from.

"We'll be working with our campuses over the coming days and weeks to figure that out," he said.

But he said university system officials have known the cuts were coming, though not the exact amount, and have had the opportunity to plan for some belt-tightening.

"We get about $1 billion from the state per year," he said. "Twenty-five million dollars is not a small number in anybody's book. But this is something we think with the right preparation and planning, which we've put in place, we should be able to do this and minimize the negative impact on our students."

Also sharing the pain will be the Department of Natural Resources, which will see a $13.2 million cut, the Department of Administration, which was directed to cut its budget by $12.9 million, and the Commerce Department, which was directed to take a $10.5 million cut.

After months of negotiations, the Republican-led Assembly and the Democratic-controlled Senate passed a budget repair bill in May calling for $69 million in cuts. The bill also included a plan to borrow $209 million against future payments to the state from a settlement with tobacco companies, and a plan to delay $125 million in payments to schools until the next budget, measures that Doyle opposed.

Doyle used his considerable veto powers to carve up the bill, eliminating the school payment delay and the tobacco money deal. He also restored $22 million to pay for the federal Real ID program, which tightens restrictions on drivers licenses--something lawmakers said should have been covered by the federal government because it was a federal mandate.

He paid for the amendments by writing in $201 million in cuts beyond the Legislature's proposal.

Steven Elbow  —  7/03/2008 1:33 pm