Pew: Facts Show Wisconsin Faces Serious Fiscal and Economic Challenges

WASHINGTON, Nov. 12 /PRNewswire-USNewswire/ -- Susan Urahn, managing director
of the Pew Center on the States, issued the following statement today
responding to claims made by Wisconsin Department of Administration Secretary
Michael Morgan about Pew's study, Beyond California: States in Fiscal Peril.

"Pew's report is factually accurate and fair. Wisconsin was highlighted in our
report because it exhibits many of the same fiscal warning signs seen in
California, as documented by widely accepted, publicly available data.

"The facts are clear. Wisconsin, like California and the eight other states
Pew profiled, faces serious fiscal challenges. In reaching this conclusion,
Pew relied on data from respected sources including the U.S. Department of
Labor Statistics, the Nelson A. Rockefeller Institute of Government, the U.S.
Census Bureau and experts in both academia and government.

"Our report states that California's budget problems are in a league of their
own. But Wisconsin has had persistent budget shortfalls -- the state has had a
negative general fund balance from fiscal years 2002 to 2008, according to its
own Comprehensive Annual Financial Reports. Additionally, Wisconsin has used
short-term fixes to meet budget challenges, such as relying on its
transportation funds to cover day-to-day operating expenses.

"Prior to the 2010 fiscal year, Wisconsin faced a more than $3.2 billion
budget gap -- nearly a quarter of its general funds, according to the Center
on Budget and Policy Priorities. During the first quarter of 2009, the state's
revenues declined by $370 million from the same quarter of the previous year,
according to the U.S. Census Bureau and the Rockefeller Institute. Wisconsin's
revenues declined even further in the next quarter from the previous year,
down $1.25 billion or 24.3 percent.

"Wisconsin's third-quarter unemployment rate shows job losses are moderating.
However, while Wisconsin manufacturing may be performing better in the current
downturn than that of some of its neighbors, such as Michigan, the job losses
in this sector have been heavy. The Center on Wisconsin Strategy, based at the
University of Wisconsin-Madison, reported in September that, from December
2007 to July 2009, the Badger State lost one-eighth of its manufacturing
workforce.

"As our report reflects, Wisconsin, like other states, has made attempts to
deal with its fiscal challenges. The legislature passed the current spending
plan on time, before the biennium started, for the first time in 32 years. It
used $2.2 billion in federal stimulus funds to plug some budget shortfalls
this year. To cover the rest of the gap, lawmakers took difficult steps such
as raising taxes on the wealthy, hospitals and smokers, and cutting spending
by $3 billion. But for the next biennium, which starts July 1, 2011,
additional budget shortfalls of about $2 billion are expected, according to
the Wisconsin Legislative Fiscal Bureau."

Background: For the report Beyond California: States in Fiscal Peril, Pew
identified factors that have contributed significantly to California's
difficulties, then determined the degree to which other states are
experiencing the same challenges. These factors are: (1) loss of state
revenues; (2) the relative size of budget gaps; (3) increasing joblessness;
(4) high foreclosure rates; (5) legal obstacles to balanced budgets --
specifically, a supermajority requirement for some or all tax increases or
budget bills; and (6) poor money-management practices.

Pew scored all 50 states using the best available data as of July 31, 2009.
The snapshot captures an important juncture: the first and second quarters of
2009, the pressure point for governors and legislatures in the throes of
crafting their budgets for fiscal year 2010 (which began on July 1 in all but
four states). More information on the methodology and the report in its
entirety is available at www.pewcenteronthestates.org/beyondcalifornia.

SOURCE Pew Center on the States

Nicole Dueffert of the Pew Center on the States, +1-202-552-2274,
ndueffert@pewtrusts.org