Updated at 5:18 p.m. CT
Wisconsin Gov. Tony Evers is implementing a second round of state budget cuts as the economy continues to flounder. Evers announced Wednesday that he is telling state agencies to find $250 million in cost savings for the current fiscal year.
“While I am still hopeful that the federal government will adopt further bipartisan proposals to stabilize funding for state and local services, in the face of continued inaction and uncertainty, the unfortunate reality is that we must take these steps and make more significant cuts," Evers said in a statement.
Tough decisions will be made in the weeks ahead, but Wisconsinites are resilient and I know if we put the health and safety of our communities first and work together to flatten the curve, we can get Wisconsin on track to bounce back stronger than ever.
— Governor Tony Evers (@GovEvers) July 22, 2020
Department of Administration Secretary Joel Brennan will work with agency leaders to identify where that $250 million will come from.
Wisconsin is losing tax revenue because of the COVID-19 pandemic and its ensuing economic downturn. Jason Stein with the Wisconsin Policy Forum says the state is probably starting to get an idea of how much income tax it has lost since the tax filing was moved to July 15. Stein says that will indicate whether the governor and legislature need to work together on a budget repair bill.
"Right now, the governor is talking about the administration itself taking steps to try and manage this problem," Stein said. "And the question is whether or not that will prove adequate or once we see more numbers about what the tax impact is, whether they will have to go to Legislature for a full-blown budget repair bill."
This isn’t the first step Evers has taken to bring spending down. Earlier this summer, the largest state agencies took a $70 million cut with just weeks left in the fiscal year. The UW System took the biggest hit – about $41 million. The next largest reductions were $7 million from the Department of Health Services and about $5 million in the Department of Revenue.
Stein says the university system tends to be a target for state cuts during recessions. He says it’s one of the largest expenditures the state has complete control over.
"And universities, unlike prisons and psychiatric hospitals, are not 24/7 institutions where it’s very hard to furlough staff," Stein said.
UW System Interim President Tommy Thompson hopes the system doesn’t have to shoulder more major cuts. Thompson released a statement Wednesday saying he would work with Evers’ office to “manage” further cuts.
The system’s financial struggle is compounded by major losses from closing down campuses last spring, and new costs for the upcoming school year as universities attempt to reopen for some in-person classes.
“Our universities are doing everything we can to provide in-person classes safely this fall and reductions in state support for the UW System are an obstacle to that work,” Thompson said in his statement. “We are a vital economic engine and one of the state’s largest employers. The UW System has already borne a disproportionate share of state cuts to date."
Thompson recently requested $110 million from Evers for testing, contact tracing and personal protective equipment. Instead, the UW System now may be faced with another cut in state support heading into a school year unlike any other.
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