To prepare the state for a potentially significant drop in revenue from the COVID-19 economic downturn, Gov. Tony Evers on Wednesday announced another $250 million in cuts to state agencies’ budgets this fiscal year.
It’s not yet clear which agencies will weather the biggest spending reductions. Evers has directed Joel Brennan, secretary of the Department of Administration, to identify the $250 million in cost savings.
The spending cuts announced Wednesday follow a $70 million round of spending reductions to state agencies Evers ordered in April, representing a 5% reduction.
“The COVID-19 pandemic has had a tremendous impact on our nation, state, communities, businesses and families,” Evers said. “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. 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.”
The cuts could apply to most state agencies, including the Department of Public Instruction and the University of Wisconsin System.
In making the cuts, the Evers administration said it will keep in mind that the responsibility of state government is to provide Wisconsinites with relevant, quality and timely services; be mindful that state and local government spending choices are intertwined; and maintain transparency and accountability.
In addition to the rounds of cuts Evers previously announced, the state has already placed restrictions on state-sponsored out-of-state travel, implemented a hiring freeze with exceptions for COVID-19-related positions and those essential for business functions, and suspended discretionary merit compensation.
During the $70 million round of cuts, smaller state agencies and those with limited taxpayer resources were exempted from the budget reduction requirement, though they were expected to do everything possible to reduce expenditures. During that round, the University of Wisconsin System took the biggest cut, at about $41 million for the last fiscal year that ended June 30.
The Department of Health Services, which has coordinated the state’s COVID-19 response effort, took the second-biggest cut, at more than $7 million.
UW System President Tommy Thompson said the budget reductions are an obstacle to providing in-person classes safely this fall.
“The UW System has already borne a disproportionate share of state cuts to date,” Thompson said. “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. We have a compelling case, and I believe the Governor will be helpful.”
State officials will have a better idea of the state’s revenue situation in late August, when the Legislative Fiscal Bureau produces its next major fiscal report.
Concerned about COVID-19?
Sign up now to get the most recent coronavirus headlines and other important local and national news sent to your email inbox daily.