STAR, Juvies, court fees, and other things we don't have enough cash for

The Wisconsin Joint Finance Committee comes back tomorrow for its first meeting in several months. The JFC will deal with several fund transfers and modifications of various funds based on needs and expenses that have popped up, and a sizable amount of the meeting will discuss overdrafts on several state accounts that are supposed to be self-sustaining (click here for a list of them), but are not, and sometimes they remain overdrawn for several years.

These overdrafts total $76.1 million, and by far the largest of them involves the state’s new STAR System. STAR added another $5.4 million to its deficit in Fiscal Year 2016-17, and is now nearly $35.9 million in the hole. As the Legislative Fiscal Bureau explains, STAR was a multi-year project that intended to consolidate many state agency operations.

Under 2007 Wisconsin Act 20, the Department [of Administration] was required to implement, operate, maintain, and upgrade an integrated business information system for all executive branch agencies for the following: (a) all financial services (including accounting and auditing of payroll); (b) procurement; (c) human resources; and (d) other administrative duties. The Department was authorized to provide these services to any executive branch agency as long as those services could be provided efficiently and economically. Legislative and judicial branch agencies were allowed to participate at their discretion.

After Great Recession budget issues and numerous discussions on what the STAR System would ultimately do, the Walker Administration gave it the go-ahead in 2013, with STAR being operated by agencies beginning in late 2015.

In the 5 years since the project got re-started, STAR has spent funds on implementation, setup and maintenance , but hasn’t gotten nearly enough of those costs back in the process. So to make up the $35.9 million difference, Walker’s DOA will start make other state agencies pay more for “their share” of the STAR project.

In its s. 16.513 plan, DOA indicates that, beginning in 2017-18, it "will begin to assess state agencies for the STAR Project costs in an amount necessary to fully recover project and financing costs incurred in its development" over a period of 19 years, phased in over three fiscal years in increasing amounts. In 2017-18, assessments to agencies for project costs will total $4,357,900. The assessment will increase in 2018-19 and 2019-20 and remain the same for each year thereafter. The Department will also continue to annually assess state agencies to recover ongoing maintenance and operations costs for the system, for which charges will total $11,370,700 in 2017-18. Each of the assessment amounts will be based on an allocation of costs according to each agency's percentage share of the following measures relative to totals for all state agencies: number of authorized full-time equivalent positions, procurement spending, and adjusted state operations expenditures.

This means that all state agencies will be kicking more of their funding back to DOA to pay for STAR, meaning they have less funding to help the general public. With $2 billion in deficits looming between the General Fund and the Transportation Fund for the next budget, that means even more service cuts than we were already looking at for 2019-21.

Among the other overdrafts that is intriguing to me is a $3.2 million overpayment for Juvenile Corrections services. The money for this account comes from counties and other state areas that send serious juvenile offenders to state facilities, and the most recent state budget made counties pay another $6 in an attempt to close this deficit, and will move around some other tax-supported funds to pay for juvenile corrections services.



Given that the State Legislature just voted last month to close the Lincoln Hills and Copper Hills juvenile facilities in 3 years and pass off those inmates to regional and local facilities, it makes me wonder if that issue will come up as a means to deal with this $3.2 million deficit. I think that the recent $19 million settlement that the state will have to pay due to Lincoln Hills guards ignoring a suicidal inmate’s requests for help is not part of this account. But tomorrow’s hearing seems like a proper place to find out if we need to prepare for another overdraft somewhere else in 2019 as a result of that horrible screw-up.

Another overdraft that’ll be discussed at tomorrow’s meeting involves the funding of various law enforcement duties via fee that is levied on various court proceedings.

Subject to certain exceptions, a $21.50 justice information system (JIS) surcharge is assessed with a circuit court fee for the commencement or filing of certain court proceedings, including: civil, small claims, forfeiture, wage earner or garnishment actions; an appeal from municipal court; a third party complaint in a civil action; or a counterclaim or cross complaint in a small claims action. Of the $21.50 received from the JIS surcharge, $6 is allocated to the Court System to support the operation of the Consolidated Court Automation Programs (CCAP). The remaining revenue ($15.50) is received by the Department of Administration's (DOA) justice information fee receipts appropriation (henceforth called the JIS surcharge fund). The JIS surcharge fund is required to lapse the first $700,000 it receives to the general fund to be recorded as GPR-earned. Subsequent JIS surcharge revenues received by DOA are transferred to state agencies to support various programs generally related to the criminal justice system.

The problem here is that what was sent out for these programs was $1.13 million more than the surcharge took in for Fiscal Year 2017, which raises its overall deficit to $3.47 million. So let’s see if JFC decides to raise the fees involved in these court proceedings, or if they have to use General Fund dollars to pay off the difference.

On a related note, Attorney General Brad Schimel may make an appearance before Joint Finance tomorrow to explain why the DOJ has a deficit of nearly $8 million for a similar fee that’s slapped on top of many state and local ordinance violations. Nearly $2.4 million of that deficit came in Fiscal Year 2017, and $6.3 million over the last 2 years, so it seems like some changes are in order. But all the LFB paper mentions is that Schimel’s DOJ and Walker’s DOA will determine how to fix this at some other time.

(Side note: It’s funny how Walker can throw away $3 million by extending the stupid sales tax holiday by 3 days, but actually paying for the bills we’ve rung up? Nah, let it ride).

So while tomorrow’s hearing on overdrafts at the Joint Finance Committee isn’t the sexiest issue around, it may be one that draws some unexpected headlines and actions due to the millions of dollars that need to be dealt with. Keep your eyes peeled on it, because it’s these little things that the officials don’t want to you to look at that often tell the larger story of how things are really doing.