Tony Evers seeks another $250 million in state budget cuts to offset pandemic revenue losses

MADISON – Gov. Tony Evers is seeking another $250 million in state spending cuts in the coming months to offset drops in revenue because of the coronavirus pandemic.  

The reductions seek to stabilize the state’s budget as the economy weathers the virus outbreak that has prevented normal daily life from resuming for most Wisconsinites. 

The $250 million in cost savings come after $70 million in spending cuts were made in May, for a total of $320 million in cuts so far. 

“All state and local governments are now experiencing the difficult balance of providing vital services to residents in crisis while also managing tough fiscal realities,” Evers said in a statement.

“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,” he said.

Minutes after Evers announced the plan, University of Wisconsin interim president and former Gov. Tommy Thompson pointed out that the system’s campuses had already absorbed more than half of the first round of cutting and signaled the system would have trouble with further reductions. 

“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 a statement.

“The UW System has already borne a disproportionate share of state cuts to date. I am working with the Governor’s office to manage these further cuts, as well as to secure the resources we need to ensure our classrooms and university communities are safe this fall,” he said.

The UW System transferred $40.7 million back to the state’s general fund, far more than any other agency cut by dollar amount — the next largest cut was $7.5 million to Department of Health Services operations.

The $40 million hit to the university system coincided with major losses across the UW System, with its flagship campus incurring at least a $150 million loss in revenue as a side-effect of the pandemic.

The University of Wisconsin-Madison Chancellor Becky Blank said the campus is facing the loss in addition to state funding cuts. But the system also received about $47 million of the federal stimulus money to help offset the revenue decreases. 

UW-Madison usually thrives on revenue streams from tuition, athletics, fundraising, research funding, summer camps and student housing — all of which have experienced large losses as the outbreak keeps much of the state shut down.

Not all state agencies were forced to make reductions during the first round of cuts. About two dozen were spared because of their small size, or because of the little amount of general funding they had in the first place but were asked to find savings where they could, according to the Evers administration.

Such funding comes from revenue from income and sales taxes. 

Alberta Darling, co-chairwoman of the Legislature’s budget-writing committee, said Evers should “continue looking for ways to protect taxpayers”

“State government must live within its means, especially during times of fiscal uncertainty,” she said. 

It’s unclear whether the administration will be required by state law to begin the process of drafting what’s known as a budget repair bill — a tool to stabilize state finances that hasn’t been used in about a decade.

In April, the state’s tax collections were nearly $900 million less than what the state brought in a year ago that month. But part of that shortfall was a result of a state and federal decision to delay tax filing deadlines to July. 

Between July 2019 and April 2020, collections were down about $300 million from the same time period the year before. 

If spending exceeds revenue by more than one-half of 1% of the estimated general purpose revenue for that fiscal year, a bill must be drafted.

Contact Molly Beck at molly.beck@jrn.com. Follow her on Twitter at @MollyBeck.