DHS, OCI implement spending cuts in wake of COVID-19

Several state agencies overseeing healthcare implemented millions in spending cuts to buttress state finances in the wake of COVID-19.

The Department of Administration announced $70 million in cuts last week across 18 of the state’s largest agencies.

The Department of Health Services identified

$7.4 million in cuts, second to the University of Wisconsin System, which is expected to cut $40.7 million.

Department of Administration Secretary Joel Brennan said Gov. Tony Evers made the cuts “without jeopardizing current public health efforts or day-to-day public safety and law enforcement activities.”

“In addition, Gov. Evers has laid out plans to aggressively deploy more than $1.5 billion to preserve public health, prevent homelessness and assist healthcare providers, farmers, small businesses, local governments and citizens in our state,” Brennan said in a statement.

Olivia Hwang, spokeswoman at the Office of the Commissioner of Insurance, said they lapsed $986,200 to the general fund, about 5 percent of their fiscal year 2020 operating budget.

They achieved that through salaries and fringe benefits for vacant positions, a reduction in supplies and services and a cut in travel and training costs canceled because of the pandemic, she said.

“This reduction did not impact OCI’s regulatory operations or its ability to protect Wisconsin consumers,” Hwang wrote in an email.

The agency plans to lapse $24 million the general fund from exam assessments, premium tax revenues and agents’ fees at the end of the fiscal year.

DHS did not return a request for comment by deadline on how it achieved its cuts.

Joint Finance Committee Co-Chair Rep. John Nygren, R-Marinette, said in a statement that Evers’ plan “leaves more questions than answers.”

Nygren raised concerns about how some of the cuts would be implemented. For instance, he noted Evers cut an appropriation at the Department of Agriculture, Trade and Consumer Protection, an agency that funds farmers’ mental health programs.

“The cuts announced by Gov. Evers raise questions about his priorities,” Nygren said.

Grace Atherton, spokeswoman for the Department of Agriculture, Trade and Consumer Protection, said the agency’s $1.2 million reduction does not involve funds for farmers’ mental health.

She said they achieved the cost savings through a “number of factors,” including delaying the hiring of vacant staff. Also their inspection staff are not incurring usual travel expenses due to adjustments made for COVID-19.

Nygren questioned why the governor exempted the budgets of other state agencies, including “his political buddies, Lt. Gov. Mandela Barnes, State Treasurer Sarah Godlewski and Secretary of State Doug La Follette.”

Brennan said the “lack of urgency” by Nygren and his colleagues cost Wisconsin taxpayers $25 million in federal support by not moving fast enough on an aid package. He encouraged lawmakers to identify taxpayer savings within their own operational budgets.

“The residents of Wisconsin know who is really working on their behalf during these challenging times,” Brennan said.

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