Daniele DuClos:
Despite that cautionary message, elected leaders approved a 2025 plan to spend more than they expected to collect in revenue. They added the equivalent of about 44 full-time positions and tapped nearly $60 million in savings to make ends meet.
For years, county leaders have authorized budgets where spending outpaced revenues, relying on reserves to balance the books. Recent higher investment yields and sales tax growth had left county coffers padded more than typical.
Leaders started using those reserves to fund the county’s day-to-day operating costs, including hiring more workers and hiking wages. That pattern of increased spending without a commensurate growth in revenues led the county to a structural deficit that now threatens county positions and services for residents.
Hicklin estimated in February the county would face a $32 million deficit for its 2027 budget — the worst outlook since the Great Recession due to declining surpluses.
“The county will need to seek reductions, not just controlled growth,” he wrote in a memo that month to the county executive.
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More than a decade ago, as the economy recovered from the Great Recession, Dane County lost its AAA bond rating because its reserves went negative, Hicklin said. The bond rating is based on the financial security of the county and determines what interest rates governments get for borrowing money. The AAA bond rating, the highest, secures the county the lowest interest rates and saves taxpayer money on debt service.
When the rating was lost, county leaders then became focused on rebuilding the reserves and repeatedly spent less than revenues coming in each year, budget documents show. After the county regained its AAA bond rating around 2015, it drew up to several million dollars annually from reserves to balance the budget, if needed.
Over those three years, they added 233 positions and gave workers annual median wage increases of 6%, 9% and 4%. The new positions and pay raises ballooned overall spending, as nearly half the annual budget is typically spent on county employees.
Madison’s City Council approved similar pay hikes for its employees in 2023 and 2024, at 5% and 6%, respectively. When city leaders estimated facing a $22 million deficit in 2024, they asked voters to raise property taxes through a referendum. About $14.6 million of the deficit was caused by growing labor costs.
In hindsight, Miles said, the County Board should have taken another look at the wage increases proposed in Parisi’s final budget cycles, which required funding from reserves, also known as the fund balance.
“Was it wise to use fund balance in something like that?” Miles said.
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Madison taxpayers have long supported far above average k-12 tax & $pending (> $26k per student!). This despite our long term, disastrous reading results.
K-12 Tax, $pending, governance and election climate: Kelda Roys, WEAC and Healthcare Cost Disease