State budget faces problems, Walker delays $101M in payments

Scott Bauer, AP writer

Gov. Scott Walker’s administration said last week it’s delaying $101 million in debt payments to help the state budget’s bottom line. But how big of a problem the state’s budget may be facing isn’t clear.

The decision to restructure debt suggests that the Walker’s administration is concerned there will not be enough cash on hand for the state budget to balance at the end of the current fiscal year on June 30, as required by law.

The latest estimate, prepared by the nonpartisan Legislative Fiscal Bureau in January, projected that the state budget was going to end this year with a $219 million cushion, but a razor-thin $71 million buffer in June 2017.

Walker administration spokeswoman Laurel Patrick called delaying the payment a “prudent financial management tool,” but did not say why it was necessary.

“Normally, if you’re in strong financial condition, you’re not kicking the can down the road,” said state Rep. Gordon Hintz, a Democrat from Oshkosh who sits on the Legislature’s budget committee. He said it was embarrassing and an indication that there wasn’t enough money available to pay for tax cuts approved in the last budget.

Pushing off debt payments into a different budget year is a common tactic used by Republican and Democratic governors alike as a short-term method of balancing the books. Since 2001, more than $1.6 billion in such payments have been delayed.

The accounting move was first detailed in a memo by the Fiscal Bureau to the Legislature’s budget-writing committee. That memo said Walker intended to defer $50 million, but Walker’s administration later said it was actually going to be $101 million.

Walker has now delayed more than $741 million in payments since 2011, including $108 million last year. His predecessors, Democratic Gov. Jim Doyle and Republican Gov. Scott McCallum, also made similar delays totaling about $872 million.

Delaying $101 million will cost the state nearly $2.3 million in additional interest over the next eight years, according to the Fiscal Bureau.

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