CHICAGO — Wisconsin lawmakers reconvened Tuesday with the clock ticking on Gov. Scott Walker's plan to restructure $165 million of debt service due May 1.

The current refunding of general obligation bonds with the savings captured up front is part of a budget repair bill that has triggered protests and prompted a walkout by Democratic senators because of a provision that curtails public employees' collective bargaining rights.

The state has posted a preliminary offering statement for $61.6 million of current refunding bonds that would restructure a chunk of debt coming due on May 1. Citi is the book-running senior manager. The state had existing authorization for that amount of refunding, but authority to complete another $165 million is included in the budget repair bill Walker unveiled on Feb. 11.

The state is facing an estimated $137 million shortfall in the fiscal 2011 budget that runs through June 30. It also owes more than $200 million to a medical malpractice fund as the result of a Wisconsin Supreme Court ruling overturning a previous transfer of funds. The state is also facing a $3.3 billion deficit in the next two-year budget cycle.

To whittle away at the deficit, the freshman Republican governor wants to restructure more than $220 million of debt service that comes due May 1, pushing the maturities out over 10 years.

The state needs legislative approval for the $165 million in the coming days in order to sell and close on the restructuring by March 15, said capital finance director Frank Hoadley. That's the deadline for funding the debt service payment coming due May 1 under state rules.

"The window opened Feb. 1 and it closes March 15," he said. "We need two weeks to get the deal done. The transaction risks are incredible" as the timeline for issuing the bonds shrinks.

The House and Senate, both controlled by Republicans, reconvened on Tuesday. The Assembly began debate on the budget-repair bill while the Senate lacked a quorum to discuss fiscal issues, due to the flight last week of the 14 members of the Democratic minority to Illinois. They oppose the bill's collective bargaining rights language. At least one Democrat would be needed to establish a quorum that would allow Republicans to push through the bill.

The bill requires state, local, and school district employees to pay more towards their pensions and health care premiums for an estimated savings of $30 million in the current budget and $300 million in the next budget cycle. The bill's most controversial component severely limits the collective bargaining rights of most public employees.

As both sides have dug in their heels over the bill, Walker on Friday pushed back the release of his proposed fiscal 2012-13 budget from Tuesday to March 1. Walker last night was scheduled to discuss the stalemate in a televised speech. He has warned up to 1,500 layoffs loom if no action is taken.

Under the bill, local and state employees in public-sector unions would lose virtually all bargaining rights, would have to hold annual elections to keep their organizations intact, and would lose the ability to have union dues deducted from state paychecks.

Police, firefighters, and state troopers would be exempt from the changes.

Health care premiums would double to 12.6% and employees who currently pay little towards their pensions would have to cover half the contribution, which is equal to about 5.8% of their pay.

Fitch Ratings, Standard & Poor's, and Moody's Investors Service all rate the state's $7.2 billion of GOs in the mid-double-A category.

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