Wisconsin lawmakers approve budget and bond fix

MADISON, Wis (Reuters) – Wisconsin lawmakers on Tuesday approved proposals to close a gap in the state budget that were not voted on when majority Republicans pushed through a controversial anti-union measure last month.

Approval of the measure on Tuesday, introduced by Republican Gov. Scott Walker, came as Wisconsin voters headed to the polls for a normally staid Supreme Court election that has escalated into a proxy fight over the union measures.

Senators on Tuesday voted 22 to 11 to approve the bill, which includes a $165 million debt restructuring and other fiscal elements left out of legislation approved in March that eliminated most collective bargaining rights for public sector workers. The anti-union measure spawned massive protests.

The bill quickly moved to the state Assembly, where representatives approved it 58 to 36 after less than an hour of floor discussion.

Walker is expected to sign the measure immediately. In a statement, Walker thanked lawmakers — both Democrats and Republicans — for “working quickly to allow us to finish this year.” The state’s fiscal year ends June 30.

The state Senate convened in full for the first time since its 14 Democratic senators left the state in mid February to prevent a vote on the proposals to limit union powers by denying Republicans the necessary quorum.

Republicans hold a 19-14 majority in the Senate, but 20 senators must be present to vote on fiscal matters. Republicans rammed the proposals through anyway using a procedural maneuver. .

The bond restructuring and other fiscal proposals approved Tuesday push debt payments to future years. They also use additional federal appropriations to meet Medicaid costs to close a $137 million gap in the fiscal budget ending June 30.

The state needs to complete the bond restructuring by April 14 to meet a debt service deposit deadline.

One alternative under consideration to meet the mid-April deadline is to privately place the debt with Citigroup, said Frank Hoadley, Wisconsin’s capital finance director. Citigroup would act as the senior underwriter for a subsequent deal that would replace the notes with longer-term bonds.

Wisconsin would restructure the $165 million of outstanding general obligation bonds, while tapping other existing refunding authorization, for a deal that would total about $220 million, Hoadley said. The restructuring could spread debt service payments over 10 years starting in 2013, he added.

The state faces a projected $3.6 billion deficit for the two-year period that begins July 1.

(Reporting by David Bailey, James B. Kelleher, Karen Pierog and Jeff Mayers; Editing by Greg McCune)

Wisconsin lawmakers approve budget and bond fix