Wisconsin Gov. Jim Doyle’s administration warned last week in a letter to lawmakers that state aid payments to schools and local governments would be cut by more than $100 million in August if no agreement is reached to eliminate a $527 million deficit in the current two-year budget.
The state must set the level of payments in mid-June. A cut in payments would be needed because the state will have a negative fund balance when the new fiscal year begins in July, and when that occurs the state is required to prorate its bills. Doyle has warned that without an agreement soon, Wisconsin would also have to delay construction projects because it will have to put off signing contracts this month.