Tackling the Budget Deficit

THE BUDGET CHALLENGE

For three evenings, November 12-14, the Common Council will debate and adopt a 2025 operating budget and capital budget. That may seem a long way off, but the long predicted budgetary cliff is now before us. The educational part of the budgetary process began in January as our Finance Department began providing the Council with a series of four background presentations explaining the basics of annual budgeting, the sources of the estimated $27 million deficit, tools for reducing expenses, and tools for increasing revenues. At our February 13 Council meeting, Finance Director David Schmiedike summarized this information.

Those four foundational presentations are available on-line as PowerPoint and video files. I highly recommend them for gaining a basic understanding of the challenge which will dominate our Council deliberations for the rest of the year. 

Link to Finance Department Presentations

FINDING A WAY TO THINK ABOUT THE BUDGET

This may seem obvious, but at this early stage the Council will be figuring out how best to attack the budget challenge. The budget is large and complex and can be viewed from many angles. On Tuesday, March 5, the Council will shift into a “Committee of the Whole” and discuss ways to move forward, to understand the choices that can be made, and the consequences, especially the impact on city services. We will probably talk about priorities. Like all Council meetings, this will be open to the public in person or by video.

SOME THINGS WE ALREADY KNOW

Madison is not alone. Cities and school districts across Wisconsin are struggling with expenses that are rising faster than the revenue straight jacket imposed by state law, and without the recourse to local sales taxes and more generous revenue sharing of many other states. Madison, at least, has benefited from a growing economy and tax base.

There are no silver bullets. It would be nice if there were one or two puffed up programs that could be cut and thereby eliminate the deficit. That is not the case. 

THIS IS A MULTI-YEAR PROBLEM

If you dive into the Finance Department presentations mentioned above, you will find that we do not have a $27 million problem. If current trends were to continue, in five years it would be a $60 million problem.  Multi-year problems require multi-year solutions. If we seek only a solution for the 2025 deficit, we will have another problem to solve in 2026, a bigger problem in 2027, and on and on.

The Common Council this year cannot bind the Common Councils of future years. We can suggest a pathway and begin the hard work of making some changes which take time to implement.

The problem is of such large proportions that it is very likely that we will not be able to solve it without using every tool available to the City, both on the expense and revenue sides. Ultimately, since this is a statewide problem, we may have to look to a willingness by the state legislature to provide a sustainable adjustment to local school and municipal revenue, a solution that does not require us to rely so heavily on property taxes. That will not happen in time to rescue Madison and many other cities for the next year or two. 

PLEASE BEAR WITH US

One thing I know with certainty is that every Alder takes this budget challenge seriously. It is both an intellectual and emotional issue. We bring different perspectives and priorities. That is good for Madison. I know that my perspective isn’t the only one. I encourage us all to pay attention to the analysis that will be offered during open meetings and in blogs. For instance, there is a lot of useful information in this week’s blog from my courageous and eloquent colleague, Alder Bennett. Here is a link.

Link to Alder Bennett's Blog

In open meetings, alders will be asking some tough questions and making suggestions you may find alarming. Please understand that we need to do this to assemble the information we need to make good decisions. Asking about the consequences of taking a certain action does not mean the alder is recommending that action. Don’t hesitate to make suggestions of your own. We are in this together.