Most students at the University of Wisconsin can remember a night where they came back from the bar with less money than they thought they would.
The state Legislative Fiscal Bureau had a similar experience when tallying up the gross budget balance at the end of this fiscal year, except the shortfall was bigger than the average excessive bar tab: Wisconsin had about $265 million less than expected.
Bureau director Bob Lang said in a memo the closing balance for the 2009-10 fiscal year was $71 million, far less than the $336 million balance estimated at the end of the legislative session.
Lang attributed the gap to reduced departmental revenues and increased expenditures.
While revenue dropped by $43 million, spending for programs such as Health Assistance increased by $222 million, Lang said.
Spending for Medical Assistance under the Department of Health Services exceeded budget estimates by $207 million, according to Lang.
Medical Assistance is a Medicare program that pays for essential health care services for individuals living below the poverty level.
The gap in the state’s gross budget balance was not related to decreased tax revenue, however, Lang said tax collections for the general fund were nearly identical to last year.
As a result, the budget allotment for Medical Assistance programs will fall short by about $148 million for the 2009-11 budget period, Lang said.
DHS is looking to make up for the shortfall, Lang said, by seeking approval to use $20 million in surplus funds from the SeniorCare program toward Medical Assistance.
SeniorCare is a program that pays for prescription drugs for seniors whose incomes fall near the poverty level. Seniors still need to pay a yearly fee and co-payments to take advantage of the program, according to DHS.
The decrease in SeniorCare expenditures was due to more seniors using Medicare to pay for prescriptions and an increase in drug rebates, according to DHS.
Lang said DHS is also seeking approval to delay fee payments to certain managed care organizations under the Medical Assistance program to the 2011-12 fiscal year in order to make up another $44 million.
The Department of Administration is looking at other options to cover the remaining $84 million deficit, including seeking more federal matching funds, Lang said.
