Governor Walker has proposed a budget that nearly freezes an important funding source for counties and municipalities, which would make it harder for local governments to provide the services that make Wisconsin communities attractive places to do business and raise families. A new budget summary released today by the Wisconsin Budget Project describes this and other changes that would affect Wisconsin communities and local governments.
The new summary describes:
- How a near-freeze on support for communities would leave them unable to keep up with population growth, and diminish their capacity to provide police and fire services, maintain sidewalks and parks, and repair roads.
- How a proposed change in the way technical colleges are funded by the state could result in fewer resources for colleges located in poorer parts of the state; and
- How the budget would limit the amount of property taxes communities and schools are able to raise.
In recent years, the Wisconsin legislature has passed more than 60 measures that represent unfunded mandates for local governments or restrict the authority of local governments.
Many state lawmakers embrace the idea of local control, saying that they believe governing should take place at the local level when possible. But instead of expanding local control, the Wisconsin legislature has limited the ability of local governments to make decisions in a wide variety of areas.
The Wisconsin legislature added 64 new limitations or unfunded mandates for local governments in the last four years, according to this memo from the Legislative Fiscal Bureau. New limits added by lawmakers include:
- Constraints on the ability of counties, municipalities, technical college districts, and school districts to set property tax levels;
- Restrictions on local ordinances that protect tenants and limit landlord authority;
- A limit on the ability of local governments to impose residency requirements on employees; and
- The repeal of regional transit authorities.
By including only token increases in local aid, the state budget could lead to cutbacks in local services or further reductions in employee compensation, according to a new budget summary from the Wisconsin Budget Project.
Under the budget, state support for aid to local governments would be frozen or nearly so, according to the summary. This freeze comes after several years of steady decreases in state spending for local assistance.
The budget, which is on the verge of final approval today, makes the following changes to local aid amounts over the two-year budget period:
- Wisconsin Technical College System: +1.6%;
- General transportation aid: +0.5%;
- Mass transit: +0.5%;
- Direct aid to counties and municipalities: +0.4%;
- Funding for juvenile justice services provided by counties: no change;
- Children and Family Aids to counties for services related to child abuse: -1.0%
- Community Aids for counties: no change in the state share.
This budget continues strict controls on the amount of property taxes that local governments are able to raise. Read more
Legislative Proposals Squeeze Local Governments from Many Directions
In Wisconsin and across the country, most government bodies finance the cost of post-retirement health benefits for their former employees on a pay-as-you-go basis. A number of Republicans in the legislature want to change that and begin requiring local governments, including school districts, to pre-pay those benefits for any public employees hired after 2014.
Evidently, the proponents of the change decided that converting to up-front financing of those benefits is working so well for the U.S. Postal Service that it’s time to do much the same thing for local governments. Okay, that’s probably not their reasoning, and I have to confess that I’m not sure what their primary argument is. However, a good State Journal article by Steven Verburg about the debate over the proposed legislation says that the bill’s proponents contend their intent is to protect workers from being cheated out benefits they have been promised. Read more
Governing.com Article Raises Questions about Who Should Set Property Tax Rates
Schools in Wisconsin are caught in a very difficult position because their budgets get squeezed by rising costs, cuts or freezes in state aid, and state-imposed revenue caps that are increasingly tightening the state’s grip on local property taxes. Governing.com examines the fiscal challenges of Wisconsin schools in a very good article today.
“A 20-year-old cap on how much property tax revenue Wisconsin public school districts can earn has become a thorn in the sides of local officials as shrinking home values and dwindling state funding have put a squeeze on their budgets. As the provision comes under increased scrutiny in that state in the wake of the Great Recession, larger questions are being raised [about] whether limiting local public education revenue is a sustainable policy for the future.”
I’d like to think that the 2013-15 budget will provide some relief for schools, but I’m not very optimistic. Read more
At a press conference in the Capitol on Tuesday, the League of Wisconsin Municipalities urged state policymakers to use the better-than-anticipated tax revenue to restore $48 million in shared revenue that was cut in the last state budget. As we noted in a previous blog post, the Dept. of Revenue announced in early September that fiscal year 2011-12 tax collections surpassed the estimated level by $126 million.
The League’s Executive Director, Dan Thompson, says the additional funding would allow municipalities to invest in the services and infrastructure necessary to grow their economies, and could also help hold down property taxes later this year. (Of course, that would require legislative action in a special session within the next couple of months.)
A resolution approved by League members at their conference last October: “urges the Governor and the Legislature to restore shared revenue funding to 2002 levels when the state’s future tax collections increases as a result of job creation and economic growth in our communities.”
Big Change #6: State Budget Cuts Mean Fewer Crossing Guards, Sheriff’s Deputies, and Snow Plows
In Fond du Lac, the city has reduced the number of crossing guards who help children safely cross the street on the way to school. In LaCrosse, the city is weighing buying less road salt for the coming winter, and waiting to plow until five inches of snow have accumulated, up from three inches. In Kenosha, the city has plans to scrap Saturday bus service altogether – or double fares.
Significant reductions in support for communities included in last year’s state budget mean that scenarios like these are playing out in communities across Wisconsin. Whether it’s deferred road maintenance in Green Bay or four dozen sheriff’s deputies laid off in Milwaukee County, cuts included in last year’s budget are affecting the safety, stability, and livability of many of our communities.
Last year’s state budget reduced investment in communities by at least $128 million over two years, including:
- a $76.8 million reduction in general support for counties and municipalities;
- a $24.2 million cut for local recycling programs;
- a $17.5 million cut for road maintenance in communities;
- a $9.6 million cut for public transportation.
Both the federal government and the state government are reducing spending, in large part by shifting costs to other levels of government. Faced with cascading cuts in spending, local governments have fewer options and are facing the possibility of having to make steep cuts in areas important to keeping our communities safe, well-functioning, and economically viable.
The debt ceiling deal means the federal government is going to be reining in spending, probably in part by sending less money to the states. Earlier this week, the Wisconsin Budget Project described the mechanism by which cuts in federal spending will take place. The cuts of more than $900 billion that the debt deal immediately locks into place come from discretionary spending – and fully one-third of this spending goes to state governments to support education, health care, human services, law enforcement, infrastructure, and other programs, according to the Center on Budget and Policy Priorities (CBPP). Read more
Legislators passed the budget adjustment bill with the intent of severely curtailing collective bargaining rights of public employees at the state and local level. Ironically, their actions may have the unintended short-term effect of making it more difficult for unions to make financial concessions.
The budget repair bill, part of which is currently tied up in court as Act 10, was justified in part as a way to make it easier for local governments to impose significant compensation cuts on local employees without having to bargain with the unions. Removing the ability for public employees to bargain on benefits and limiting their ability to bargain on wages would (in theory) make up for the steep cuts in local aid in the Governor’s 2011-13 budget. Local governments have pointed that the governor’s cuts exceed the amount that can be recouped in compensation cuts to local employees by a significant amount. We explored this topic in an April 13th blog post. Read more