Saturday, December 3rd, 2016

State Supreme Court rules against state budget raid on medical malpractice fund

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In a 5-2 decision this morning, the Wisconsin Supreme Court dealt the state budget a $200 million blow by declaring the raid on the medical malpractice fund unconstitutional. Reaction from the MacIver Institute:

The ruling, which Capitol observers say is a stunning rebuke of the Doyle Administration’s budgeting practices, reversed a lower court ruling and will force the state to reimburse the $200 million to the Fund. The State of Wisconsin currently has only $45 million in projected reserves on their books.

“Governor Doyle and his legislative followers broke a promise to families and the medical community when they raided the fund,” said State Representative John Nygren (R-Marinette). “This raid has already driven up health care costs and is now going to contribute to an already huge state budget deficit.”

State law requires doctors and hospitals to contribute to the fund to pay for medical malpractice claims that exceed the $1 million paid by private malpractice insurance. Until the raid, the fund has helped keep malpractice insurance costs lower than most other states.

In October 2007, the state legislature approved a proposal from Governor Jim Doyle to balance the state budget by transferring $200 million from the Fund to pay for ongoing state operations.

Local reaction from State Representative Bill Kramer:

“The ruling today should come as no surprise to anyone; not to the people who voted for the budget and certainly not to anyone who voted against it. Wisconsin’s budgetary process needs immediate reform or we will continue to have unbalanced budgets and will continue to shuffle dollars around to create a patchwork of solutions held together by a thread. Controlling spending and taxes must be part of that reform.

For two decades the challenges facing Wisconsin’s state budgets have been masked by raids such as this one. This throws into stark contrast the challenges facing state government and the failure to budget maturely and responsibly.”

Update! Reaction from the candidates for governor:

Milwaukee County Executive Scott Walker:


“The raids enacted by Governor Doyle are inexcusable and have wreaked havoc on our state budget, and now the taxpayers are yet again on the hook for his misguided policies. As governor, I’ll find ways to do more with less to fill the $2.5 billion gap created by Governor Doyle, and support an amendment that will protect funds like these from future raids.”

Former Congressman Mark Neumann:

“I applaud the Supreme Court decision. These budget gimmicks in Madison wouldn’t be tolerated at any small business in Wisconsin, and as Governor I would reject any raids on segregated funds.

“These raids are nothing more than irresponsible shell games conducted by career politicians who have failed at one of their key jobs – to properly cut spending and balance the state budget.”

Milwaukee Mayor Tom Barrett wants to keep taxes high:

“Patchwork budgeting and the bipartisan raiding of funds are precisely why we need adult supervision in state government. The addition of $200 million to the $2.5 billion deficit is another reason we can’t afford massive tax giveaways for the wealthy and huge corporations. As governor, I’ll get Madison’s fiscal house in order with responsible budgeting, and I will fight everyday for Wisconsin’s working and middle class families.”

More local reaction from State Senator Neal Kedzie:

During the 2007-09 state budget, Senate Republicans criticized and voted against the $200 million raid of the Injured Patients and Families Compensation Fund precisely for the reasons offered today by the Wisconsin Supreme Court as it ruled it unconstitutional. We warned legislative Democrats that this gimmick authored by Governor Doyle to take money which did not belong to the state would never pass constitutional muster.

We also knew a decision by the Court would create a massive hole in the state budget, which now must be fixed. While it may be difficult to do so, there is a teachable moment here and I hope the Democrats are paying attention: don’t spend money you don’t have, and don’t take money that’s not yours.

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