JFC Approves New Budget Adjustment Bill Setting Aside Revenue for Medical Malpractice Fund Debt
The Joint Finance Committee (JFC) voted today to advance a new budget adjustment bill that appears to be intended to establish some of the parameters for deliberations on the rest of the biennial budget. The bill, AB 148, which was unveiled just a couple of days ago, makes a few changes that affect the current budget for fiscal year 2010-11, but that doesn’t seem to be the primary purpose.
- Commit $235 million to be used in fiscal year 2011-12 for the $200 million and estimated interest that the Wisconsin Supreme Court has ordered the state to repay to the medical malpractice fund. That’s an increase of $185 million above the $50 million the Governor recommended paying in the next biennium.
- Move $147 million of Medicaid payments to manage care organizations into the current fiscal year, in order to capture the higher federal match rate, which will decline on July 1. This maneuver will yield a net savings of $23 million., and it appears to be the only part of the bill tht really needs to be done by the end of June.
- Reduce anticipated agency lapses to the General Fund by an additional $54 million because agencies haven’t been able to find the full amount they were directed to lapse.
- Repeal the provisions in Act 10 that would lapse $29.8 million to the General Fund from the increased state employee contributions to their health insurance and retirement benefits, since it is now too late to capture those savings.
- Reduce spending by $7.7 million in the current fiscal year by incorporating into the bill several cuts or spending lapses that were included in Act 10 and have been held up by the litigation over that bill.
The net efect of the bill is to reduce the projected General Fund balance at the end of the next biennium by about $208 million. (See Table 1 in the LFB paper.) That still leaves about $400 million from the newfound state revenue, which could be used to reduce the magnitude of cuts proposed by the Governor in the 2011-13 budget. Reducing those cuts by $200 million each year is reasonable fiscally because it can be done without increasing the state’s structural deficit.