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.
Madison’s proposed budget for 2026 highlights the city’s recent financial turnaround, as it would increase staffing and service levels while limiting the city’s property tax increase to roughly the rate of inflation.
A key contributor to this newfound stability is an infusion of new revenue, including property tax dollars from a successful $22 million referendum approved by voters last November. An unexpected increase in state aid is another factor that gives the city of Madison a brighter budgetary picture than a year ago, when city officials were contemplating fee increases and cuts to city services if the referendum had failed.
Instead, Mayor Satya Rhodes-Conway’s proposal calls for increasing funding for services in key areas, such as library and paramedic staffing, to match Madison’s growing population. Still, Madison residents and officials should not become complacent, the Wisconsin Policy Forum’s annual brief on the city budget finds.
Madison Metro Transit is encountering financial challenges that have spurred a proposed increase in support from the city’s general fund. And overall spending continues to rise at a rate that outpaces both core city revenues and the pace of inflation. Despite a solid local economy and strong property values, the report finds, the city’s long-term finances are still fundamentally unbalanced.
A key question for city leaders moving forward will be how to best use Madison’s reserves, which have grown to historic levels since the pandemic. The city closed 2024 with a total unassigned general fund balance of $110.6 million, an increase of $27.8 million that leaves the balance at more than 27% of the city’s general fund spending – well above its 15% target. Given this, some taxpayers in hindsight might question whether the $22 million referendum was larger than necessary.
City officials deserve recognition for acknowledging their ongoing fiscal divide and putting forward a plan for addressing it over the next six years. Rather than cutting spending, this plan would rely mainly on new and one-time revenues. It calls for using current tools available to the city – such as withdrawals from reserves — while lobbying state lawmakers for new options such as a city sales tax that would be similar to the one recently approved for the city of Milwaukee.
Whatever a permanent fix might ultimately be, it would come with real tradeoffs such as a greater tax burden on residents, reduced city services, or smaller raises for city employees. Even some of the most attractive options, such as working with other local governments to deliver services more efficiently, would be only partial solutions and still would involve some measure of compromise and accommodation.
This information is provided to Wisconsin Newspaper Association members as 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.
