This seems sketchy, given that the Walker folks are out the door on Monday, but it's actually an annual report that's required. These overdrafts happen when a government program is supposed to pay for itself with non-tax funds, but it doesn't end up doing so. These shortfall grew from $76.1 million to $94.6 million in 2018 alone, has almost tripled in size since the end of 2013, and a lot of it involves ongoing deficits that seem to keep growing with each year.
The largest of these items is related to the ongoing implementation of the Enterprise Resource Planning System, more commonly known as....
This was a plan by Governor Jim Doyle to house numerous back-office state operations “under one roof”, but it was put on hold in April 2008 due to various concerns. In 2012, Scott Walker’s Department of Administration decided to revive STAR, and we’ll let the Department of Administration describe what was supposed to happen as STAR got up and running.
In fiscal year 2015-16, the department implemented the project’s financial module (Release 1) and human resources/payroll module (Release 2). In addition, the department implemented the STAR financial module for the Department of Transportation (Release 3).The problem is that these assessments arent covering the costs, and STAR's overall deficit has grown to $44.8 million, with,nearly $9 million of that deficit happening in Fiscal Year 2017-18.
With the deployment of STAR Releases 1 and 2 in fiscal year 2015-16, the department began incurring postdeployment maintenance and operations costs for the system. These costs began to be recovered from agencies starting in fiscal year 2015-16 and annually thereafter. As such, the maintenance and operation costs do not contribute to the deficit in this appropriation (it’s for the implementation, not after STAR is put in place). The STAR Project development costs began to be recovered through an annual assessment to start agencies beginning in fiscal year 2017-18. The department assessed agencies $4,357,895 for STAR development, which represented 60 percent of the annual amount necessary to fully recover project and financing costs of the project. This assessment will be established at 80 percent of the annual costs in fiscal year 2018-19.
In fiscal year 2017-18, the department expended $16,631,954 in costs associated with STAR Project implementation, of which $2,691,250 was for continued development activities and $13,940,704 was for ongoing maintenance and operations expenses.
One of the big looming questions is when does the “development” of STAR ever end? And what happens when DOA asks for their money back in higher amounts from agencies? Sounds like there needs to be a hearing to figure out what’s going to have to be done in the 2019-21 to fill in this increasing hole in the STAR project - and it only takes one Joint Finance member to call such a hearing (HINT!).
Another modification is required when it comes to paying for a couple of criminal justice matters where the expenses aren’t being covered by the fines that are supposed to pay for all of it. One of this is the Justice Information System Surcharge, which slipped below $0 after 2013 and has run a deficit in 4 of the last 5 years. It’s $15.50 of a $21.50 fee that is assessed for a lot of civil court proceedings, and it pays for items like centralizing court information, various Department of Justice support programs for law enforcement and drug treatment, and notification of crime victims.
There is also a requirement to send $700,000 to a General Fund that (Republicans love to tell us) was $588 million in the black as of June 30. By comparison, this Justice Info System surcharge is now $4.5 million in red, and it makes you wonder if the fee should be raised, or if we should stop sending $700,000 to the General Fund when this account can’t even pay for itself as it is.
Likewise, the Department of Justice has a Penalty Surcharge account that spent $2.65 million more last year than it took in. This Penalty Surcharge is a kickback to the state on any fine that happens for many local ordinance violations and other minor convictions, and much of the money goes to pay for training for law enforcement and Corrections staff, along with anti-drug operations and AODA programs in schools.
So how should this be fixed, especially since the Penalty Surcharge has lost $8.6 million over the last 5 years? Brad Schimel's Department of Justice doesn’t seem to have a clue.
….It is expected that an unsupported cash deficit will continue without changes to the appropriation of penalty revenues or surcharge amounts.
Gee, thanks guys! Maybe you should have spent less time suing to try to end Obamacare and more time figuring out how to afford your own programs at home. Maybe new Attorney General Josh Kaul can come up with a few fiscally responsible ideas when he takes over on Monday.
There are another couple of biggies in the overdraft list that may be part of larger initiatives for soon-to-be Gov Evers to tackle in his first budget.
Juvenile Corrections cumulative deficit
2017-18 $4,441,383 (+$1,213,845)
Northern Wis Psychiatric Center cumul deficit
2017-18 $18,919,886 (+$4,489,818)
Both of these items are part on ongoing reforms in state government. One deals with the closing of the scandal-plagued Lincoln Hills and Copper Hills facilities in Northern Wisconsin, and the subsequent opening of smaller regional facilities for juvenile offenders. The other deals with how we handle individuals with disabilities that have long-term care needs. It might also be worth a hearing to get input not only on how we can close these deficits, but for better policies going forward that deal with these growing issues.
These rising overdrafts underscore that there is more to the state's fiscal picture beyond the cash surplus or deficit in the General Fund over one year. And a lot of these problems resulted from Walker-era negligence that demands real answers before we have to use that General Fund money to bail out these deficit-ridden accounts.