Doyle finds costly budget fixMADISON (AP) — Gov. Jim Doyle’s plans to get cash to offset the state’s budget shortfall
MADISON (AP) — Gov. Jim Doyle’s plans to get cash to offset the state’s budget shortfall will cost the state $94 million down the road, according to an independent analysis.
Doyle wants to refinance a loan so the state can use more of the money it receives from tobacco companies to pay for state health programs for the poor.
An analysis released by the Legislature’s nonpartisan budget office showed the delay in paying off the debt will cost taxpayers $94 million.
Doyle announced the plan last year but expanded it after learning the state’s current two-year budget would be $527 million short if nothing is done.
It’s a switch for Doyle, who has long criticized a similar decision by his predecessor, Scott McCallum, and other lawmakers to help solve budget woes in 2001 and 2002.
‘‘I don’t call that anything other than essentially what McCallum did,’’ Todd Berry, president of the Wisconsin Taxpayers Alliance, said of Doyle’s refinancing plan. ‘‘We were told we weren’t going to repeat the tobacco problem.’’
As attorney general, Doyle helped win a settlement with tobacco companies over the costs of smoking. The settlement called for yearly payments from the companies to the state in perpetuity.
In 2002, under a plan authorized by lawmakers and McCallum, Wisconsin borrowed against that future stream of tobacco company money, receiving $1.6 billion upfront and using the annual payments to pay off the loans. The annual payments were potentially worth more than $5 billion.
Doyle wants to refinance the loans to receive a lower interest rate and extend the payments. He estimates it would free up $68 million a year for the state through 2020 to be used to balance the budget and cover health care costs.
The plan would delay by a decade the state’s payoff of the so-called tobacco bonds to 2027, according to the analysis. The delay will cost the state $94 million over the next two decades, the report said.
Doyle can do the refinancing without legislative approval, but lawmakers must OK how the money is spent.