Walker, Legislature may need emergency steps to balance budget

MADISON, Wis. (AP) -- Wisconsin's state budget condition has worsened to the point that Gov. Scott Walker and possibly the Legislature will need to take emergency steps to avoid being out of balance.

The nonpartisan Legislative Fiscal Bureau on Thursday released the new projections that show the two-year budget will be $143 million short of balancing by July 2013.

That's bad news for Walker, who faces a drive to recall him from office based largely around criticisms of choices he made in the two-year state budget passed last year. Four Republican state senators, along with Walker's lieutenant governor, also face potential recall elections this summer.

The budget news also comes in the wake of six straight months of job losses in Wisconsin.

Walker has argued that he made the tough choices necessary to balance a $3.6 billion budget shortfall last year without widespread layoffs or tax increases. The most controversial part of his plan reduced collective bargaining rights for public workers and increased how much they had to pay for pension and health care benefits.

Walker's budget also cut aid to schools by about $800 million over two years and reduced how much schools can collect from property taxes per student, a combined cut expected to reduce revenue to districts by about $1.6 billion.

Walker's spokesman Cullen Werwie had no immediate comment on the Fiscal Bureau's report. A spokeswoman for Walker's Department of Administration also did not immediately respond.

Fiscal Bureau Director Bob Lang said in the memo to co-chairs of the Legislature's budget committee that the Walker administration is looking to address the problem through debt refinancing and restructuring.

The administration could take action that would not necessitate the Legislature passing an emergency budget bill, Lang said in an interview.

At the time of the last estimate in October, the state's budget was projected to end with a positive $73 million balance. A large reason for the change is a $273 million drop in projected tax collections, the memo said.

The Democratic leader of the Wisconsin state Assembly says a new projection showing Wisconsin faces a $143 million budget shortfall illustrates irresponsible action by Gov. Scot Walker.

Assembly Minority Leader Peter Barca issued the statement Thursday in reaction to the new estimates from the nonpartisan Legislative Fiscal Bureau.

Barca says Walker's policies have left Wisconsin fiscally unsound and caused the state to fall behind on the road to economic recovery. Barca says Walker's economic plan isn't working.

Walker views the new figures differently, saying he believes the state is headed in the right direction after Republicans made tough budget choices last year to balance a $3.6 billion shortfall. Barca is considering running against Walker in a recall election.