When a Percent is Not a Percent
May 26, 2009 4:28 PM
We continue to wait and work behind the scenes to learn more about (and influence if we can) the outcome of the state budget deliberations that are currently before the Joint Finance Committee.
Last week the Governor announced an additional 2.5% reduction in shared revenue (shared revenue is one part of our state aid payments that helps fund basic city services like police, fire and streets). This now amounts to a 3.5% reduction when added to the 1% reduction that was already part of his base budget. On the one hand, we're relieved that it's not worse. A 5% reduction was on the table. But we still don't know exactly what the dollar amount of the reduction is. You might think that since Madison's shared revenue payments total around $8 million, a 3.5% reduction would mean about $280,000. However, a complicated formula means that Madison will see a reduction in shared revenue greater than this simple calculation.
Under the Governor's initial 1% cut proposal, the state planned to distribute the cut using a formula that first looked at a municipality's share of statewide property values. The formula then held every community to a reduction of not more than 15%. This overage was distributed based on a municipality's share of statewide population. Because Madison is relatively property rich, because other communities hit their 15% limit and because we are the second largest city in the state, our original 1% cut was well above a simple 1%. In fact, it was going to be about $325,000 closer to a 4% cut.
So, we're still waiting to see what formula the state uses to allocate the additional cut, but we can bet that our 3.5% reduction in shared revenue will be somewhat higher than a straight percentage. Using the same formula suggests that our cut could potentially be in excess of $1 million or as much as 12.5%.
On a much lighter note, City Recycling Coordinator George Dreckmann sold the Brat Heard Around the World on Monday afternoon. George was selling brats at the Brat Fest only a few feet from me when the world record setting brat passed through his hands. Congratulations to Tim Metcalfe and his team for putting on another great community event that benefits so many charities. And congratulations to George for being at the right place at the right time just as Bill Hall was in the Brewers extra inning win over the St. Louis Cardinals.