When it comes to urgency on passing a budget repair bill, "there’s no rush on this thing" because the fiscal year doesn’t end until June 30, 2011.
Jon Erpenbach on Thursday, February 17th, 2011 in a television interview
Wisconsin state Sen. Jon Erpenbach claims there is no urgency to pass budget repair bill
Hanging over the standoff on union rights in Wisconsin is the question: How long will Democratic state senators continue their out-of-state boycott in an effort to delay a vote and get a compromise with Republican Gov. Scott Walker?
The 14 Democrats are holed up in Illinois to avoid being forced to return to Madison for a vote. Their absence means the Senate lacks a quorum to vote on spending measures.
And that means a delay on Walker’s plan to solve a $137 million budget shortfall – in part by forcing most public employees to pay more for their pensions and health care. It also would sharply curtail collective bargaining rights. That budget year ends June 30, 2011.
The next two-year budget, which begins July 1, 2011, has a much larger projected deficit, one that tops $3 billion.
So, how long will the Democrats stay away?
State Sen. Jon Erpenbach answered that question Feb. 17, 2011, as a guest on MSNBC’s Rachel Maddow show.
Erpenbach, a Democrat from Middleton near Madison, suggested there was no quick timetable, noting June 30 is the key date.
"This budget doesn’t need to pass right now," Erpenbach told Maddow. "And keep in mind it’s not the big budget, it’s just a minor budget repair bill that’s totally porked up with all sorts of things that Gov. Walker wants – it’s a huge power grab. There’s no rush on this thing. We have time to deliberate, we have time to debate, we have time to change it, we have time to make it better."
So, amid all the talk of a state budget "crisis," is it true there is not much urgent about it?
We asked Erpenbach to explain.
He said his point was there is no urgency on the portion of Walker’s repair bill that severely limits collective bargaining – because that policy move has no fiscal impact on the state budget.
Walker could drop his demand on collective bargaining and the repair bill still would be fully funded, Erpenbach contended.
However, in making the statement, Erpenbach made no such distinction. Rather, he spoke of the budget repair bill as a whole.
Let’s take a look.
The non-partisan state Legislative Fiscal Bureau analyzed Walker’s repair bill funding plan.
The main source of funds is a debt-restructuring plan that saves money in the short term by pushing principal payments into the future. The other, much smaller, source is the $30 million from a plan to impose the higher health care and pension co-payments on state employees.
That piece represents about 22 percent of the overall shortfall.
The fiscal bureau paper notes the Walker plan to eliminate collective bargaining rights for public employees over fringe benefits and working conditions, and limit wage negotiations, would have no fiscal impact in the current budget year.
So Erpenbach is correct the math of Walker’s budget repair bill does not hinge on the controversial union rights provision.
However, as we noted in a previous item, the short-term deficit is real.
And it is based on some pending shortfalls in key programs, and that clearly adds urgency to the proceedings.
Debt restructuring: The Walker administration says the debt-restructuring plan must be approved within days – by Feb. 25 or 26, 2011 – to make sense financially. Fiscal Bureau Director Robert Lang is trying to confirm that, but Erpenbach and other Democratic staff members we talked to said they did not dispute it.
Medicaid funding: There’s also a projected $153 million shortfall in state Medicaid-funded programs for the needy. The state could run out of cash as soon as April 1 to keep Medicaid funds flowing, Lang told us. Walker said some Medicaid providers might not get reimbursed if the money isn’t there.
Meanwhile, the changes to force more in health and pension payments from state employees also have a ticking clock.
According to Lang, the savings figure will start to drop if those cuts can’t be put in place by March 13 payrolls. Walker said the deadline was April 1 if the full $30 million in savings was to be realized.
So far, Democrats have not offered their own plan for closing the deficit, though they have signaled a willingness to accept the higher employee contributions for pensions and health care.
So they cannot argue that the deadlines on debt restructuring and employee givebacks are not in play.
Erpenbach argued that Walker could simply rescind the $140 million in business tax breaks the Legislature approved earlier in 2011 at his urging. That, he said, could be used to finance the budget repair bill.
But as we noted in a recent item, those tax cuts don’t kick in until the next two-year budget. So they have no impact on the immediate shortfall. Erpenbach is wrong on that point.
There is an interesting historical footnote regarding Erpenbach’s claim about the repair bill moving too fast. In 2009, when Democrats were in charge, Erpenbach was in the party-line majority that approved a budget fix that raised taxes by $290 million.
It got exactly one day’s review by the state Senate and no public hearing.
Let’s get to the bottom line.
In answering a question about when he and other Democrats would return to the Capitol, Erpenbach said there was no sense of urgency surrounding the vote on the budget repair bill. The collective bargaining changes – the most controversial part of the measure – do not have a fiscal impact in this bill. Erpenbach said that’s what he meant, though he did not say it that way.
But the entire budget bill – as currently constructed – is not something that can wait as long as summer. A Medicaid shortfall is projected to hit the state by the end of March. The pension and health care contributions lose some of their impact on the budget if not approved within weeks. And the bill is reliant on a debt plan that apparently must be approved within days.
The PolitiFact definition of Barely True is "the statement contains some element of truth but ignores critical facts that would give a different impression."
That’s our rating of Erpenbach’s statement, Barely True.
(Editor's note: After this item was published, Lang clarified his statement to say Medicaid money would run out to April or May. Also, on Feb. 24, 2011, Gov. Scott Walker put the projected date as "mid-May.")
Editor's note: This statement was rated Barely True when it was published. On July 27, 2011, we changed the name for the rating to Mostly False.
Published: Tuesday, February 22nd, 2011 at 11:12 a.m.
Interview with State Sen. Jon Erpenbach, Feb. 21, 2011
Interview with Robert Lang, director, state Legislative Fiscal Bureau, Feb. 21, 2011
Interview with Julie Laundrie, spokeswoman for State Sen. Jon Erpenbach, Feb. 21, 2011
Interview with Cullen Werwie, spokesman for Gov. Scott Walker, Feb. 21, 2011
Senate Bill 11, budget repair bill, Feb. 14, 2011
Wisconsin Legislative Reference Bureau, summary of budget repair bill, Feb. 14, 2011
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