In order to avoid massive layoffs and deeper cuts to programming, Gov. Scott Walker said the state Legislature must come to a vote on the controversial budget repair bill by Friday or Saturday at the latest – a deadline complicated by the absence of 14 state Democrats.

If the Legislature fails to come to a vote on the bill by the end of the week, it would lose the option of refinancing debt to address the current fiscal year’s $137 million shortfall, according to a memo released Tuesday by the Department of Administration Secretary Mike Huebsch.

Debt currently owed to the Injured Patients and Families Compensation Fund and to Minnesota would be refinanced and paid in the future. However, the memo stipulates the bill must pass into law before Feb. 25 in order to allow for time to sell refinancing bonds.

Restructuring Wisconsin’s debts to Minnesota and the Patient Compensation Fund would provide state government with fiscal flexibility toward paying those bills, Huebsch said in the memo.

Although the budget repair bill itself would create benefit concessions amounting to about $30 million by the end of 2011, Walker said the largest savings would come from refinancing the debt – creating a statewide savings of $165 million.

Walker said if the bill does not pass through by Friday, deeper cuts would be necessary and could potentially result in dismissing 1,500 Wisconsin workers throughout the next four months.

Still, refinancing debt does not remove the state’s responsibility to pays its bills. Wisconsin would still have to pay debt to Minnesota and the Patient Compensation Fund – around $59 million and $250 million respectively, with interest of $4,900 a day on the Minnesota debt – but could pay back debts at a later date, said Andrew Reschovsky, a University of Wisconsin economics professor.

Reschovsky added refinancing debt is like “kicking a can down the road” because the underlying problems are still there.

Wisconsin law requires a budget repair bill when the current fiscal year shortfall exceeds a certain amount. Reschovsky said the trigger amount is still larger than the current shortfall facing Wisconsin.

Common Cause in Wisconsin spokesperson Jay Heck said the budget repair bill might have been necessary only after the Republican majority legislature passed tax break legislation early in Walker’s tenure.

“Right now, the Democrats claim there is no budget shortfall,” Heck said. “In January, Walker provided tax cuts to businesses in order to encourage them to come to Wisconsin, so the Democrats believe this budget shortfall has been deliberately manufactured.”

Even with the pressing deadline Walker gave the state Legislature to vote on the bill, Walker acknowledged the legislation could not move forward until the Democrats in the Senate return to Wisconsin.

All 14 Senate Democrats have left Wisconsin in a move to block passage of Walker’s bill.

“Senate Democrats need to come back to work the jobs that they are getting paid to do,” Walker said in a statement. “With more than 17 hours of public testimony and a five day vacation to Illinois, Senate Democrats say they need more time.”

–  The Associated Press and News Reporter Sarah Jarvis contributed to this story