CHICAGO — Wisconsin lawmakers could vote as soon as Tuesday on the remaining pieces of legislation designed to eliminate a shortfall in the current state budget primarily by restructuring outstanding general obligation debt.

The bill is aimed at fully eliminating a $137 million deficit in the fiscal 2011 budget that runs through June 30 and covering a $176 million shortfall in Medicaid funding.

“This legislation will allow the state to finish this year’s budget in the black without raising taxes on the middle class,” Gov. Scott Walker said in a statement Wednesday after introducing the legislation, which includes various measures stripped from the budget repair bill approved last month by the Legislature.

The bill grants authority for a restructuring deal to push $165 million of debt service that comes due next month further out into the original bonds’ maturity schedule. The authority would boost to $220 million the amount of May debt service that could be restructured, as the state has existing authority to refund $61 million.

Wisconsin’s capital finance office faces a tight deadline to get the transaction completed as the May 1 debt service must be funded by April 15 under current state rules. Citi is serving as the senior manager on the deal and Foley & Lardner LLP is bond counsel.

Senate Democrats had stalled the Republican majority’s passage of the original legislation — which raised state employee pension contributions and health care premiums and gutted the collective bargaining rights of most public unions — by fleeing the state in mid-February.

That left the Senate one member short of the special majority needed to establish a quorum. The GOP ultimately got around the requirement last month by stripping the bill of its fiscal elements, including the debt restructuring, which had triggered the need for a larger majority to establish a quorum.

The higher pension contributions and health care premiums will save the state $30 million in the current budget and $300 million in the next two-year budget cycle.

Meanwhile, litigation over the legality of that legislation is still pending. Wisconsin on Thursday halted its efforts to begin implementing the legislation following Dane County Circuit Court Judge Maryann Sumi’s signing of an order that makes clear the law cannot take effect until it is published by the secretary of state. Sumi’s previous temporary restraining order blocked the secretary of state from publishing the law.

The state Legislative Reference Bureau did publish it last week and the Department of Administration believed that action allowed it to begin implementing the law.

Dane County district attorney Ismael Ozanne is challenging the law, arguing that the legislative committee that passed the revised budget-repair bill and then sent it to the chambers for a vote didn’t provide sufficient notice of the meeting in violation of open-meetings laws.

The state believes that Sumi overstepped her authority in granting a TRO against publishing the law and that her action interferes with legislative powers. An appellate panel last week said the case should go directly to the state Supreme Court.

Walker has proposed a $59 billion two-year budget for the biennium beginning July 1. The budget relies mostly on cuts to eliminate a $3.6 billion deficit and proposes the restructuring of $364 million of debt service that comes due in fiscal 2012.

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

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