As we noted in our first Madison budget brief last year, Wisconsin’s capital city relies heavily on a single source of revenue – local property taxes – that is limited by state law. Because of these restrictions, the proposed budget would increase 2021 property taxes on this December’s bills by one of the smallest percentages in years even as other forms of revenues — such as charges for city services, interest income, and fines — will remain depressed amid the pandemic. Add in labor contract commitments for healthy raises for police and firefighters and lagging state aid and the result is a $16.5 million potential budget gap for the coming year.
To avoid the shortfall, Mayor Satya Rhodes-Conway is asking the Madison city council to make some permanent spending cuts and accept some one-time measures such as furloughs and a substantial use of the city fund balance. Together, the current proposal and the city’s likely future revenues leave a high probability that a new shortfall for 2022 will appear next fall. In other closely watched areas, the city would increase rather than cut police spending and push off some capital projects such as the rollout of bus rapid transit.
A substantial Madison School District tax & spending increase referendum is on the November ballot.