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MADISON - State payments to schools, local
governments and others will have to be prorated starting in August
unless a $527 million budget shortfall is addressed soon, Gov. Jim
Doyle's administration warned in a letter sent to legislative leaders
Thursday.
Doyle, just hours before he held a
closed-door meeting with leaders of the Legislature, said the letter
shows why there is an urgent need to reach a budget agreement.
"The time is ticking here and we
need to get this done," Doyle said. "It means that people
are going to have to make compromises but we're going to have to come
to a conclusion here."
About $100 million in payments to
schools, local governments and others would have to be delayed
starting in August because there wouldn't be enough cash on hand to
meet obligations, state budget director David Schmiedicke said.
Absent a budget deal, a plan showing
what payments would be reduced by how much would have to be drawn up
by June 15, he said.
Doyle and lawmakers have been meeting
regularly in secret to avoid that. The latest meeting, which lasted 45
minutes Thursday, didn't result in a deal.
Assembly Speaker Mike Huebsch, R-West
Salem, said he, the governor and Senate Majority Leader Russ Decker
all agreed to resolve the shortfall as soon as possible.
"While there's still differences,
we're still going to work through those and try to get to an answer
very quickly," he said.
Huebsch and Decker declined to comment
on the specifics of what was discussed.
"We're taking steps forward,"
Huebsch said.
He said the letter released Thursday
underscored the importance of reaching a deal soon.
Sent to members of the Legislature's
budget committee, the letter shows the state will have a negative
balance of $1.1 billion in July. Prorating the payment of bills is
required when the general fund balance gets below a certain level.
That trigger point will happen in
August without a budget agreement, Department of Administration
Secretary Michael Morgan warned in the letter.
Doyle has said that one of the first
areas affected will be road repair and construction projects scheduled
to be let out for bids this spring.
If a deal is reached soon, none of
those steps will have to be taken, Huebsch and Decker said.
The budget shortfall is blamed on a
weakening economy, resulting in a lower-than-projected tax collections
for the state.
Proposals to fix it include delaying a
$125 million payment of state aid to schools, refinancing bonds from
tobacco settlement payments and taking money from the state's
transportation fund to be replaced with increased borrowing.
Doyle and Democrats also proposed a new
hospital tax under which hospitals would be reimbursed with federal
money. But Assembly Republicans have opposed the idea, saying there is
no guarantee the federal government will provide the reimbursement and
the tax will be passed on to patients.
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