Court Rules Against State’s Transfer of Funds

gavel_court-1Earlier this week, the Wisconsin State Supreme Court ruled that the 2007 raid of the state’s medical malpractice fund was illegal. Governor Doyle and the Legislature approved the $200 million transfer of funds from the Injured Patients and Families Compensation Fund as a way to help balance the 2007-09 budget in October 2007. Two months later, state doctors (who pay fees into the fund) sued to¬† have the the transfer declared illegal and the money returned.

The 5-2 decision overturns an earlier decision by a lower court and requires the state to pay back the funds with interest. The case returns to Dane County Circuit Court to determine the amount of interest owed and when it will be paid back.

The decision is a serious blow to the state, which faces a possible $2.5 billion structural deficit. It also calls into question previous raids on special funds, a practice that has transferred a total of more than $2.1 billion from 18 funds since 2003. It’s unlikely that the practice will continue — all three major gubernatorial candidates declared Tuesday that they will not use such transfers if elected.