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Conservatively Speaking

State Senator Mary Lazich (R-New Berlin) represents parts of four counties: Milwaukee, Waukesha, Racine, and Walworth. Her Senate District 28 includes New Berlin, Franklin, Greendale, Hales Corners, Muskego, Waterford, Big Bend, the town of Vernon and parts of Greenfield, East Troy, and Mukwonago. Senator Lazich has been in the Legislature for more than a decade. She considers herself a tireless crusader for lower taxes, reduced spending and smaller government.

State Supreme Court rules raid on Patients Compensation Fund unconstitutional

State budget


The Wisconsin Supreme Court has ruled that the transfer of $200 million from the Patients Compensation Fund (PCF) to the state’s general fund during the 2007-09 state budget process is unconstitutional. The court’s decision came on a 5-2 ruling.

According to the Wisconsin Office of the Commissioner of Insurance, “The Fund was created by statute in 1975 to provide excess medical malpractice coverage for Wisconsin health care providers. Health care providers obtain primary medical malpractice insurance from private insurance companies in an amount required by statute.  As of July 1, 1997, that amount is $1,000,000 per occurrence, and $3,000,000 annual aggregate. Coverage in excess of the primary insurance is provided by the Fund. The Fund operates on a fiscal year basis--July 1 through June 30. Administrative costs, operating costs, and claim payments are funded through assessments on participating health care providers.”


The Wheeler Report writes:

“In the majority opinion by Justice Prosser, the court concluded:

  • Health care providers have a constitutionally protected property interest in the fund.
  • From their equitable title in the Fund, the health care providers have at least three corresponding rights:
    • The right to the security and integrity of the entire Fund.
    • The right to realize the Fund’s investment earnings to moderate, perhaps even lower, their assessments.
    • Health care providers and the proper claimants have the right to have excess judgments paid to the proper claimants. Any transfer of money from the fund for an improper purpose infringes upon these rights."

 Justice Prosser also writes in the majority opinion:

“We conclude that § 9225 of 2007 Wis. Act 20 is unconstitutional because it authorizes an unconstitutional taking of private property without just compensation. Accordingly, we reverse the circuit court's order granting summary judgment and dismissing the Medical Society's suit. We remand with directions that the circuit court issue (1) an order requiring Secretary Morgan to replace the money removed from the Fund, together with lost earnings and interest that has been charged to the Fund; and (2) a permanent injunction prohibiting Secretary Morgan from transferring money out of the Fund.”

Here is the court opinion. 

I opposed the raid of the Patients Compensation Fund. On December 15, 2007, I blogged:

After the 2005-07 state budget was approved by the Legislature, Governor Doyle partially vetoed 752 words out of a large section of the budget to create a 20-word sentence. The result was a raid of $427-million from the Transportation Fund to pay for schools, an appropriation the Legislature never authorized.

The 2007-09 state budget transfers $200 million from the state's Patient Compensation Fund to the general fund. The Wisconsin Medical Society is now suing the state because of the raid that could be illegal.

When citizens pay a tax or fee designated for a specific purpose, they expect the funds will be used in that manner. The use of funds for other programs or services other than those the funding was intended for is a serious breach of faith and trust with the public. These raids are wrong and must be stopped.”

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