Weekly Fiscal Facts are provided to Wisconsin Newspaper Association members by the Wisconsin Policy Forum, the state’s leading resource for nonpartisan state and local government research and civic education. The Wisconsin Policy Forum logo can be downloaded here.
- Download this column as a Word document
- See other WNA Member Content offerings
The proposed 2023 city of Madison budget offers mostly good news for city services, with few cuts and a range of new offerings. It is made possible by the city’s ongoing recovery from the COVID-19 pandemic, robust pace of development, and use of federal aid.
Compared to the stark financial problems facing leaders in Wisconsin’s biggest city, Milwaukee, their counterparts in the state’s second-largest city are in an enviable position, according to the Wisconsin Policy Forum’s annual brief examining Mayor Satya Rhodes-Conway’s proposed budget.
Yet problem spots are emerging on the horizon, raising the prospect of substantial budget shortfalls in 2025 and beyond. That’s when the city will no longer have access to federal pandemic aid dollars, and expenses are expected to outpace revenues.
Issues to watch include rising debt levels and debt service costs, fueled by record borrowing levels in this budget, and a transit system that is proceeding with a significant expansion while its ridership is still lagging pre-pandemic levels.
High inflation and a tight labor market loom large, making it harder to attract and retain city employees. Inflation also heightens the city’s challenge of serving a growing population, with its revenues from local property taxes and state aid being limited by state-imposed policies.
Including both the city’s general and enterprise funds, the mayor’s proposed 2023 operating budget would total $729.4 million, an 8.5% spending increase. The city’s general and library funds – its main vehicles for funding city services – would total $381.9 million, a 6% increase.
Despite state limits on local property taxes, a combination of factors permits the mayor to propose a 5.5% property tax levy increase, the largest since 2009. The factors include the city’s strong rate of net new construction – the rate to which property tax levy increases for operations are generally limited under state law — rising debt payments, and the annexation of part of the town of Madison later this month.
The average city home owner would see a 4% increase in their tax bill. Notable increases in fees, including for sewerage and water, also are proposed.
Ultimately, the mayor’s 2023 budget proposal finds the city with largely healthy finances, including a strong local economy, robust reserves, high service levels, and modest liabilities. At the same time, however, there is some cause for long-term concern.
This information is a service of the Wisconsin Policy Forum, the state’s leading resource for nonpartisan state and local government research and civic education. Learn more at wispolicyforum.org.
