Mayor's Operating Budget Message

Madison has been recognized as a great place to live – we have found ways to be both prudent and forward-thinking. We also face many challenges in ensuring our City is a great place for all residents. My 2017 operating budget continues in our tradition of innovation and sets the stage for continuing to improve on connecting the services the City provides with the goals we all share. Over the next year, I am asking that we work together to identify the outcomes we value the most and begin a process to establish measurable and meaningful strategies to accomplish those outcomes.

I have made upward economic mobility a central theme of my administration. Starting with the reinvigoration of Neighborhood Resource Teams to help listen to, empower and connect communities of color in our most stressed neighborhoods with the services they need, to partnering with the Madison school district to connect families with children to out-of-school enrichment opportunities, to youth summer employment and investments in construction job training programs, we have taken many steps to help all our residents reach their highest potential.

We have made progress despite the limitations placed on us by the current State Legislature through one-size fits all levy limits, limited revenue options, and unfunded mandates. The State of Wisconsin gives us one general source of funding – the property tax. We must therefore work with what we have and hold the line on property tax increases for the sake of our businesses, families and seniors.
Toward that end, my 2017 budget limits the growth in taxes on the average value home to 3.1 percent, a $72 increase over 2016. I sought to hold the levy increase to a 3% rate of growth, but the Room Tax Commission chose to provide a $150,000 increase to the Overture Center subsidy rather than reduce levy support for Olbrich Gardens and the Henry Vilas Zoo.

The maximum increase allowable under levy limits would increase taxes by 3.6%, or a total of $83 on a typical home. With inflation projected to increase a modest 2.2 percent in 2017, I am not exercising that option and call upon the Common Council to work with me in holding the line on taxes for our businesses, families and seniors.
Carrying this levy authority over to 2018 will help us maintain a more modest tax increase this year while providing additional capacity to address on-going priorities next year, particularly if the Council’s current priorities of constructing and staffing two new public safety facilities in the next two years are successful. Public safety is a top priority – staffing for the Police and Fire Departments has grown nearly 30% over the past 18 years while our population has grown 18%.

Finding the property tax funding to operate these facilities will mean progress toward our vision of an upwardly mobile Madison for all our residents will have to be slowed.
Through the following initiatives, my 2017 budget makes targeted investments that we can all afford and makes progress toward our goals by focusing more on measurable strategies toward meaningful outcomes:

 Responds to our vision of an upwardly mobile Madison for all our residents by leading through example on implementing a $15 minimum wage for City employees by 2020. My 2017 budget provides $80,000 to phase-in family supporting wages for all City workers over the next four years.

 Provides $400,000 for the 15 Point Plan to help address racial disparities, violence prevention and recidivism in our community. This funding is split equally between new levy-supported resources and a reallocation of funds from the Emerging Opportunities Program. The Council’s Organizational Committee will determine the best way to allocate these funds in ways that make demonstrable and measurable progress toward improved outcomes.

 Reallocates existing funds in support of the Rennebohm Foundation’s Northside Early Childhood Zone. A total of $100,000 for child care tuition assistance and other contract support will be invested along with funding from Dane County, the United Way and the Rennebohm Foundation to help improve outcomes for children.

 Calls on the Community Development Division to study the feasibility of implementing a Men’s Dormitory in 2018 to help support the education, training, and upward mobility of young men of color. It will be modeled after the now defunct Henry Street project implemented almost 20 years ago;

 Invests additional resources to address homelessness through a downtown-focused street team. This program will be funded by the downtown Business Improvement District. The ambulance conveyance fee is increased by $50 to help continue funding for street team services to the homeless in areas of the City outside of downtown.

 Continues the summer meals in Madison Parks program through seeking $15,000 of financial support from local health care providers.

 Works to better focus all of our resources on City-wide goals and meaningful outcomes by providing $75,000 to implement budgets focused on measurable strategies, enhanced cross-agency data management, and continuous program improvement as part of the City’s strategic management efforts. This funding will help continue the momentum provided by the What Works Cities initiative in early 2017, which is 100% privately funded.

 Seeks to improve diversity in City hiring and creating a workplace culture that values equity by providing $100,000 to review and make recommendations on updating the City’s human resources processes and procedures and reviewing those activities through an equity lens.

 Supports wage equity for City employees by funding a 2.25% pay increase for most general municipal employees in December 2016, a 1% pay increase for those employees in July 2017, a 1% increase in December 2016 for Police and Fire commissioned staff and supervisors and a 2% increase in July 2017 for those employees. Nearly $4.8 million of additional levy support is provided to support these wage increases and to meet required contributions to the Wisconsin Retirement System. These increases are made possible by very favorable health insurance premiums for 2017 that reduced overall health insurance costs by over $400,000. Further savings in employee benefit programs will be sought by investing $50,000 to help review and update those programs based on industry standards and benchmarks.

 Adds 4 new police patrol officers by providing $360,000 of City property tax support for the former Education Resource Officers previously funded by the Madison school district. My budget does not fund the estimated $500,000 in initial operating costs in 2017 for a new police station and fire station. I hope the Council reconsiders the timing of these new facilities and balances the significant investments of property taxes already made in public safety with those needed to ensure an upwardly mobile Madison for all our residents.

 Works toward the re-establishment of Harambee, a program that will be coordinated by Public Health in conjunction with the women who participated previously lead by Betty Banks to see if we can duplicate the record setting reduction in African-American infant mortality that ended in 2005. City funding is planned for the 2018 operating budget.

Balancing this budget presented challenges. General Fund revenues are projected to grow only 0.6% in 2017, due primarily to slowing growth in building permits, declining parking violations due to multi-space meters, and the state mandate that 70% of room tax revenues be dedicated to tourism development, promotion and marketing efforts.
The Fleet and Insurance internal service funds are facing deficits of over $5 million that had to be addressed, with on-going structural shortfalls of $2.2 million met in the 2017 budget. Contractual and Council-adopted pay increases for City employees and contributions to the Wisconsin Retirement System totaling nearly $5 million also had to be funded in this budget. Debt service on already issued promissory notes and bonds to fund increases in the City’s capital budget is increasing nearly $3.9 million, or 9%.

The combination of wage increases, costs-to-continue, debt service and new initiatives left a gap of nearly $2 million. This gap would have been larger if not for very favorable health insurance premiums for 2017 that helped reduce those costs by $430,000 compared with 2016.

Balancing the budget required the following measures:

 Rebases the salary budget for Metro Transit to actual hours of work, which saves $1 million compared to the 2016 base budget.

 Resets the snow and ice removal budget by calculating the average number of snow events over the past 30 years to help reduce by 1.5 the number of funded major events for a savings of $530,000. Of this savings, $300,000 is placed in the Contingent Reserve to help meet any snow emergencies that may arise in excess of budget.

 Funds the Contingent Reserve at the policy goal of 0.5% of expenditures, or $1.5 million. The Contingent Reserve will be available to fund snow emergencies above the forecasted number of events and to pay an estimated $250,000 of retroactive contributions to the Wisconsin Retirement System for stagehands as part of a payment plan with the Wisconsin Department of Employee Trust Funds.

 Increases the Urban Forestry Special Charge to fund all eligible costs, reducing levy support for forestry activities in the Parks and Streets budgets by $1.32 million.
 Reflects the decisions of the Room Tax Commission to provide $635,000 of tourism-related room tax revenues to partially replace levy support for the tangible tourism municipal development associated with operating Olbrich Gardens and Henry Vilas Zoo.

The budget increases General Fund appropriations by 3.4 percent and increases the levy 4.3 percent. Based on the latest estimates of overall value of taxable property, the city tax rate is expected to decrease by 0.5 percent to 9.45 per $1,000 of assessed value. With the average home value up 3.6 percent, taxes on the average value home are expected to increase $72, or 3.1 percent.

We have a great City – we are number one in the nation in many ways. I know we can make it greater – by working together in pragmatic, sensible and prudent ways that support upward economic mobility for all residents at a price that is affordable to our tax payers.