There was a lot of budget talk on the weekly "Rewind" show on Wisconsin Eye this week, and it gave a pretty good rundown about where we are at in late-July 2020. Here's the show if you want to watch it yourself.
I wanted to hit on a few of the notes given by Capitol reporters Steve Walters and Patrick Marley.
1. The Evers Administration is clearly worried that revenues will be far below January's projections. We won't know the total numbers until August (as Walters quotes Legislative Fiscal Bureau director Bob Lang in the video), but Evers' recent announcement of $250 million in pre-emptive budget cuts for FY 2021 goes along with the belief that there will be a shortfall that has to be dealt with.
2. Naturally, Republicans take Evers' move and run with it by asking for more severe cuts. The Rewind show quotes Joint Finance co-chair John Nyrgen as saying that he thinks spending for Fiscal Year 2021 should be kept at the same levels as Fiscal Year 2020. Let me give you an idea at how much that would change plans for next year (I am also going to leave out the expected deposits to the rainy day fund, because that isn't going to happen with revenues falling short).
Walters and Marley add that this idea of freezing spending really doesn't work because the 2nd Fiscal Year has inflation-like increases in aid to K-12 schools, local governments, benefit costs and debt already baked in. In addition, there will be hundreds of millions more state dollars spent on Medicaid than what was expected in the budget (as the recent Medicaid projections indicated), since more people need assistance with hundreds of thousands of additional Wisconsinites out of work.
You can claim that Nygren's talk is out of an ideology to hamper government's ability to respond to social needs, but it's more likely because the WisGOPs are fine with Wisconsin struggling in the next 2 years, because it would allow them to try to blame Governor Evers for the subpar situation during the 2022 gubernatorial campaign.
3. There doesn't seem to be a lot of expectation of help for state government coming with whatever type of stimulus bill might get through Congress (if there is one). Marley mentions that part of the reason that Evers has held back the last $280 million of CARES money is because it is possible that GOPs in Congress will give more "flexibility" to that prior CARES money instead of giving more funds in the next stimulus bill.
That's kind of ridiculous, as the CARES money also has to set aside and used by the end of December. So for Congress to turn around 3 months later and change how that money can be used seems like quite the double-cross to state and local governments. Especially since a lot of that money has already been set aside and/or spent out under the old rules.
So those 3 things lead me to a 4th conclusion. Given that we will know how much revenue is down as of August, and we (hopefully) will know whether or not the Feds will offer assistance to state and local governments around that time, we should have a good idea about how far in the hole we might be in the next month. Once we have those numbers, Evers should call a budget emergency and call a special session to consider a budget repair bill that uses Medicaid expansion to balance the budget.
By law, the gerrymandered GOP Legislature would have to at least consider the bill. If they turn it down, Wisconsin voters that overwhelmingly favor Medicaid expansion would have that fresh in their mind as they go to the polls a few weeks later. And it would cement the (correct) image of the WisGOP Legislature as a bunch of do-nothing obstructionists who have no real answers to the problems that exist in 2020.
The next few weeks may be the last bit of relative calm on the budget front, because the big reports and realities are going to come to light very soon, in an economic situation that looks very different than it did a month ago. Combine that with what likely will be a lack of help from DC, and it's going to be a tight situation.
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