With no good options to close a looming $27 million budget deficit for 2025, Madison is setting a series of community meetings to hear from residents about the services they most value and their vision for the city’s future.
But some contend the meetings seem more about building support for a referendum to raise property taxes above state levy limits.
The city faces major spending cuts, increasing revenues — possibly through a first-ever referendum to raise property taxes — or a combination of both to eliminate the projected operating shortfall next year. The city can also pursue a multiyear approach, using some means in one year and others at another time.
Madison has never asked voters to exceed state levy limits since the state began to allow municipalities to do so in 2006.
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The City Council is sponsoring five community meetings starting Wednesday on the East, West, North and South sides and the Downtown-campus-Isthmus. Residents can learn about the deficit, how it came to be and what can be done about it; and learn about city services and where tax money is spent. There will be small group discussions about options with neighbors and council members, according to promotion for the meetings.
“These budget engagement events allow residents to learn more about the general fund deficit and the city services funded by their tax dollars,” council President Yannette Figueroa Cole said. “They are a crucial platform for you, the residents, to voice your opinions and contribute to the decisions that shape our city.”
“The Mayor’s Office is very supportive of these meetings, and city staff from the Mayor’s Office and other departments have been working closely with council staff to help develop content related to the budget,” chief of staff Sam Munger said.
But some West Side residents who have been clashing with city officials about the future of the Sauk Creek greenway and a new area plan contend the sessions seem like public relations to build support for a referendum.
“Based on the conversations I’ve had with my neighbors, it appears that many of us share the belief that the city’s sudden interest in discussing tax increases is not entirely genuine,” said Randy Bruegman, a Sauk Creek resident who served as a fire chief and in local government for 40 years in multiple states and led several national organizations. “It seems that they are intentionally creating a sense of urgency to scare people into supporting a referendum to raise taxes.
“As a community, we should expect our leaders to exhaust all other options before resorting to a referendum,” he said. “To date I have not seen any attempt to do that.”
The meetings are about gaining input and insight, city officials insist.
“This engagement plan is to gain access to the voices of the city, not just the prominent voices,” Figueroa Cole said. “The referendum is one component of the budget discussions. The current deficit is a multi-year problem. We want to deepen engagement with constituents about the budget this year and every year.”
Deficit motivates engagement
The city has had a “structural deficit” since the state imposed strict levy limits in 2011, and it’s been made worse by the economic impacts of the COVID-19 pandemic, city officials say. Federal aid and other city funding helped maintain services during the past few years, but those were short-term measures, they say.
The fiscal bind is forcing city officials to engage in the coming budget earlier than usual and in different ways.
In early March, the City Council convened as a special Committee of the Whole that allowed for freewheeling conversation to consider the 2025 budget outlook and address the structural deficit, with many members supporting the need to sustain staffing amid growth and reluctantly looking to a first-ever referendum to raise property taxes above state levy limits, perhaps for the full $27 million.
Some also said efficiencies, as well as fee increases or charges — those that would be least regressive — could be part of a package to close the deficit. No decisions can be made at such a meeting.
In mid-April, the council voted 11-7 with an absence and an abstention for a resolution calling on the state Legislature to authorize a local option sales tax for Madison and other cities in Wisconsin and making a local option sales tax a priority for the city’s lobbying efforts.
A 0.5% sales tax, similar to one used in Dane County, would generate an estimated $35 million annually in Madison. If the Legislature authorized a 0.5% sales tax for cities served by Metro Transit, it would generate an estimated $50 million.
Now the council is reaching out to the community, with multiple members committed to participating in each of the five events in their part of town.
“By bringing alders and their constituents together outside of the Downtown setting, we make meetings more accessible,” Figueroa Cole said. “These regional meetings are designed to get the conversation closer to you, making you an integral part of the decision-making process.”
Mayor not attending
Rhodes-Conway will not be attending. “Because these meetings are being led by the council, we all agreed that it would be best to keep the focus on the local alders hosting the meeting rather than have the mayor there,” Munger said.
“In my opinion, it is the responsibility of the mayor to take the lead at these meetings,” Bruegman said. “After all, the Mayor’s Office is in control of the budget. It’s essential for the mayor to take charge of these discussions and ensure that they are transparent and in the best interest of the community.
“There have been many discussions among the community regarding this topic, and it’s clear that many people have become increasingly cynical about the information provided by the city and the lack of transparency exhibited in many issues affecting our neighborhoods,” he said.
Feedback will be considered during the budget decision-making process, Munger and Figueroa Cole said.
“Diverse participation is imperative,” Figueroa Cole said. “We are reaching out to all communities and everyone impacted by services.”
Gap is structural
The city, which has a $405.4 million general fund operating budget for 2024, must balance its budget each year under state law. Even if the city closes the $27 million gap in 2025, it will face ongoing gaps of $7 million to $11 million, city finance director David Schmiedicke has said.
Moves used to balance the budget have included increases in certain charges and fees, use of the city’s “rainy day fund,” imposing higher employee contributions for benefits and modest across-the-board reductions to agency budgets, Schmiedicke has said.
Now, allowable property tax and other revenue growth under state law, including value from net new construction in new property assessments unveiled on April 19, is expected to add about $13 million to the city budget in 2025, the report says.
But ongoing commitments, including the need to replace $18 million in one-time federal and local funding used to balance the 2024 budget, along with $22 million to continue existing services including pay raises, health insurance increases and new positions to address needs, total $40 million, leaving the $27 million shortfall.