Wisconsin Legislators Cut Spending To Plug $400M Budget Shortfall

CHICAGO - In a rejection of Wisconsin Gov. Jim Doyle's proposal to balance the current state budget, the Republican majority in the Assembly passed a plan this week that would plug a $400 million shortfall through a mix of spending cuts, nearly draining the state's small rainy-day fund and delaying a school aid payment.

The plan specifically cuts spending by $250 million though cuts are not outlined, uses $55 million from the rainy day fund that holds $57.5 million, and delays a $125 million school aid payment into the next biennium.

"We are doing exactly what families do in tough times: we're tightening the belt, cutting unnecessary spending, and dipping into the savings account," Republican Assembly Speaker Mike Huebsch said in a statement. "It's not raising taxes as the easy way out, it's a real-world solution that keeps the government's hand out of people's pockets during tough times."

Aides to Doyle, a Democrat, did not have an immediate comment, though they have said that the governor does not support dipping into the reserve into which the state only just made its first deposit at the close of the last fiscal year. The Senate, controlled by Democrats, has not yet voted on a plan to shore up the budget.

Doyle on Monday unveiled his package to eliminate the deficit. It would enact a hospital tax on a facility's revenue to leverage at least $450 million in additional federal Medicaid matching dollars, freeing up about $125 million in the budget that would have gone to cover health care spending.

The governor also proposed transferring $243 million from the transportation fund, borrowing to cover some of the lost funds. Another $87 million in spending would be cut or pushed off a year.

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