1. Introduction 2011-13 State Budget Because of the $3.6 billion deficit entering the 2011-13 budget cycle it was an extremely difficult process  We relied heavily on $2 billion in stimulus money from the federal government  Previous Administration postponed making difficult decisions We had to make difficult choices and limited options– just like you  Raise revenue (ie taxes)  Cut Spending  Return to one time fixes Raising revenue in this economy was not an option

2. Additional Challenges In addition to the budget deficit we faced these carry over “IOUs”:  Repay $234 million that was raided from the Patients Compensation Fund (court ordered repayment)  Overdue $65 million in reciprocity payments to Minnesota The previous Administration used much of the federal stimulus money to backfill K-12 education in the previous budget A weak economy and revenues made the task of balancing the budget extremely difficult

3. 2012-13 General Fund Condition Statement* July 1 st Opening Balance $73 Revenues (Taxes and Departmental Revenues) $14,392 Total Available $14,465 Net Appropriations $14,391 Gross Balance $74 Less Required Statutory Net Balance -$65 $9 *2012-13 is the “base year” for construction of the 2013-15 budget.

4. Tax and Fee Changes in Budget Repair Bill and 2011-13 Budget Prior to passage of the budget the legislature cut General Fund (GPR) taxes by $55.2m this year and $62.0m next year. Thus the Budget Repair and 2011-13 Budget combined to produce net GPR tax and fee cuts of $140.8m. There were 25 tax and 15 fee changes in the 2011-13 budget. Only 12 had a biennial impact, up or down, or more than $1m and a majority of those were fee changes. The bulk of fee increases ($111.4m) comes from a 5.5% UW tuition increase. It should be noted that the budget actually capped the increase at the 5.5% rate which was already approved by the Board of Regents. It is the first time we have capped tuition in the budget.

5. 2011-13 All Funds

6. Fund Source General Purpose Revenue Federal Revenue Program Revenue Segregated Revenue Bond Revenue 2011-13 Total $29,027,930,800 $19,078,556,300 $8,725,083,600 $7,492,356,300 $1,731,700,900 % Total 44.0% 28.9% 13.2% 11.3% 2.6%

7. 2011-13 General Fund Taxes

8. Tax Source Individual Income Sales & Use Corporate Income Public Utility Insurance Company Excise *Cigarette/Tobacco * Liquor/Wine/Beer 2011-13 $14,090,233,000 $8,656,870,000 $1,757,925,000 $697,200,000 $297,000,000 $1,354,300,000 $114,300,000 % of Total 52.0% 32.0% 6.5% 2.6% 1.1% 5.0%.4%

9. 2011-13 General Fund Appropriations

10. 2011-13 General Fund Appropriations By Functional Area Functional AreaAmount% of Total Education$12,881,454,10044.4% Human Relations/Resources$8,879,227,60030.6% Shared Revenue/Tax Relief$4,342,420,00015.0% Environmental Resources$497,887,7001.7% General Executive$1,399,765,9004.8% General Appropriations$392,896,3001.3% Miscellaneous: Compensation Reserves, Judicial and Legislature $773,201,7002.2%

11. 2011-13 General Fund Appropriations By Purpose Aid to Individuals/Organizations $6,509,520,30022.4% State Operations$7,792,975,00026.9% Local Assistance$14,725,435,50050.7%

12. State Revenues and Federal Appropriations GF TaxesOther GF Revenues & Transfers Federal Appropriations 2000-2001$10,063$316$4,703 2001-02$10,020$1080$5,493 2002-03$10,199$415$5,606 2003-04$10,739$409$6,343 2004-05$11,396$410$6,172 2005-06$12,030$804$6,668 2006-07$12,618$592$6,780 2007-08$13,042$737$7,135 2008-09$12,113$560$7,268 2009-10*$12,131$819$10,566 2010-11*$12,925$803$8,774 2011-12**$13,927$674$9,535 2012-13**$13,779$613$9,481

13. 2011-13 County & Municipal Aids MunicipalityPercentage Change to 2011 Aid Amount Change to 2011 Aid Washington County-25.0%-$120,452 City of West Bend-15.0%-$197,473 Town of West Bend-25.0%-$19,984 Town of Addison-25.0%-$14,435 Town of Jackson-25.0%-$15,170 Town of Trenton-25.0%-$19,034 Town of Polk-25.0%-$16,854 Village of Slinger-25.0%-$28,101 Village of Richfield-25.0%-$43,031 Village of Jackson-25.0%-$70,647

14. Estimated 2012 General Transportation Aid Payments Municipality2011 Actual Aid 2012 Projected Aid Amount Change to 2011 Aid* Percent Change to 2011 Aid* Washington County$2,241,370$2,017,233-$224,137-10.0% City of West Bend$1,545,716$1,391,145-$154,572-10.0% Town of West Bend$96,472 $00.0% Town of Addison$136,652 $00.0% Town of Jackson$125,248$125,348$00.0% Town of Trenton$139,531 $00.0% Town of Polk$122,786 $00.0% Village of Slinger$185,859$167,273-$18,586-10.0% Village of Richfield$309,357 -$00.0% Village of Jackson$323,263$290,937-$32,326-10.0%