Wisconsin Governor Scott Walker To Outline Budget Amid Ongoing Crisis Republican Gov. Scott Walker's two-year spending plan will likely include major cuts to schools and local governments to help close a projected $3.6 billion budget shortfall. State funding for schools is expected to fall by $900 million — a 9 percent drop.

Wis. Governor To Outline Budget Amid Ongoing Crisis

Wis. Governor To Outline Budget Amid Ongoing Crisis

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Wisconsin Gov. Scott Walker speaks to the media outside his office at the Capitol last week in Madison. Protesters have occupied the building for two weeks while the governor has tried to push through a bill that would restrict collective bargaining for most government workers. Scott Olson/Getty Images hide caption

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Scott Olson/Getty Images

There's another shoe to drop in the Wisconsin budget battle, and it could drop Tuesday when Republican Gov. Scott Walker delivers a budget address before a joint session of the state Legislature.

But there will likely still be 14 empty chairs, as Wisconsin Senate Democrats continue to stay out of state to prevent a vote on a bill Walker says he needs to fix this year's state budget.

If Walker has said it once over the past couple of weeks, he has said it dozens of times: "We're broke. We don't have any money."

Walker says the state's projected budget shortfall for this fiscal year, which ends June 30, is close to $140 million. Wisconsin, he says, has a deficit of $3.6 billion for the next two years.

"You really can't negotiate when you don't have money to negotiate on," he said.

Walker insists that he cannot compromise on his call to eliminate nearly all collective bargaining rights for most public employees in the state because he doesn't want local governments to have their hands tied by collective bargaining agreements, especially after they see the budget cuts he'll likely announce Tuesday.

"If you don't make the changes for collective bargaining in this budget repair bill, you make it very difficult for local governments in particular to balance the budget in the next biennium and the years to come," he said.

But labor leaders and Democratic lawmakers say Walker's proposal is intended to undermine unions and weaken a key Democratic voter base. The state's largest public employee union filed a complaint Monday alleging Walker has engaged in unfair labor practices by refusing to negotiate.

J.R. Ross, editor of WisPolitics.com, a nonpartisan news service on Wisconsin government and politics, says Tuesday's proposed cuts might be huge.

"He basically teed up the pain with his budget repair bill, and now real pain comes with the budget itself," Ross said. "It really will lay out the depth of the cuts in state aid to local governments, changes that will be coming, you know, what the fiscal picture's going to look like for Wisconsin going forward, at least under his vision."

Over the weekend, tens of thousands of demonstrators in Madison, Wis., marched around the Capitol building, protesting the proposed budget repair bill. Scott Olson/Getty Images hide caption

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Scott Olson/Getty Images

Over the weekend, tens of thousands of demonstrators in Madison, Wis., marched around the Capitol building, protesting the proposed budget repair bill.

Scott Olson/Getty Images

Walker suggested Monday that he will propose cutting state funding for schools by $900 million — a 9 percent drop from this year's allocation. Schools last week started putting teachers on notice that their contracts may not be renewed for next year given the budget uncertainty.

There will also likely be big cuts to cities, towns and counties.

In addition, Walker is expected to limit the revenue that schools and local governments can raise from property taxes, deepening their budget pain.

In theory, eliminating collective bargaining rights could allow school districts, cities, towns and counties to reduce employee pay and benefits, or even lay off workers, without having to follow collective bargaining agreements.

"Fiscal stress for school districts in Wisconsin is nothing new, particularly in rural areas that are losing enrollment, and they don't have the flexibility to decide who to let go if last hired and first fired is in the union agreement, which it generally is," said Todd Berry, president of the nonpartisan Wisconsin Taxpayers Alliance.

Berry says Wisconsin is one of the nation's most decentralized states, with the state government really just collecting tax revenue and sending it to local governments to deliver many services.

He says he thinks the impact of budget cuts expected to be announced Tuesday will be breathtaking. He suggests that some of the school board members, superintendents, mayors and city managers who now say they don't want sweeping changes to collective bargaining will change their minds.

Recent public opinion polls suggest that most Wisconsin voters don't want collective bargaining rights taken away from public employees, and the state Senate Democrats say they will continue to stay out of state if the governor doesn't back down.

"There's nothing under state law or the constitution that allows them to be arrested, from what anybody can tell that I've talked to, for being out of state," said Ross of WisPolitics.com.

But significant risks remain for both sides, who continue to dig in their heels in week three of the Wisconsin budget battle.