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“We’re Broke!” If Dems Don’t Return, Wisconsin Faces “Horrible Options,” Lt. Gov. Says

Aaron Task
Editor in Chief
Fin - Daily Ticker - US

The political stalemate in Wisconsin continues but the calendar keeps moving and the state's bills keep piling up. On Tuesday, Republican Gov. Scott Walker unveiled his bi-annual budget, which calls for 6.7% cuts in overall state spending and 7.9% in education spending. The governor seeks to close a projected $3.6 billion budget shortfall in fiscal 2012.

"We're broke," Wisconsin Lt. Governor Rebecca Kleefisch tells Dan Gross and me in the accompanying clip. "We're in dire fiscal times. Nobody will question that."

Indeed few, if any, observers will question the state's fiscal difficulties. But the Governor's methods? Well, that has caused a bit of a stir, to put it quite mildly. (See: Wisconsin Labor Fight Spreads to Ohio, Oklahoma and Indiana)

Tuesday's budget is for fiscal 2012. For the current fiscal year, Gov. Walker has proposed a separate "budget repair" bill, which even Kleefisch admits has "generated a lot of controversy."

The "budget repair" bill is the one that calls for steep concessions from public sector unions as well as severe restrictions on union rights to collectively bargaining. The bill also includes authorization for the state to refinance $165 million of debt that otherwise comes due on May 1.

The nonpartisan Wisconsin Legislative Fiscal Bureau has set a March 16 deadline for the refinancing, which typically takes about two weeks complete, The WSJ reports. The state had originally planned to do the refinancing deal either this week or next and Gov. Walker has been threatening even steeper budget cuts and mass layoffs of state employees, should the state be unable to get the deal done.

"We are looking at some potentially horrible options," including massive layoffs and an inability to make Medicare payments, Kleefisch says. "We urge those Democratic Senators to return because we need them to do what they were elected to do."

The state's 14 Democratic Senators have been holed up in Illinois since Feb. 17 where they remain as of this writing, effectively blocking a vote on the bill, which requires a forum in the State Senate.

"We urge them to return [because] we need this budget repair bill passed," Kleefisch says. "We know good things will happen once the wheels of democracy finally start to regenerating and moving the right direction."

In fact, Kleefisch says the so-called repair bill will give school districts, counties and local municipalities the "tools with which they can deal with those cuts" in the fiscal 2012 budget. And by "tools," she means restrictions on unions' collective bargaining rights -- a highly controversial issue we discuss with the Lt. Governor in more detail in part two of this interview.

Aaron Task is the host of Tech Ticker. You can follow him on Twitter at @atask or email him at altask@yahoo.com