By james art A wave of budget meltdowns hitting local governments has claimed its latest victim – Dane County.
Slowing revenue and rising personnel costs create a bleak budget outlook for the coming years for Dane County as the County Council put the finishing touches on a $925 million 2025 budget Wednesday.
Looming fiscal problems may force the county to make budget cuts and create new revenue streams over the next two years to prevent unbridgeable budget holes like those seen in the city of Madison, according to a memo from county Finance Director Chuck Hicklin to elected officials. -early this day month.
Driving the looming budget hole are 233 new employees hired by the county and a nearly 20 percent increase in average salaries that have cost nearly $39 million through 2022, according to Hicklin’s memo. Funding for social service contracts jumped $11 million, or 21 percent, over the same period. A new health insurance contract will add $10 million in costs in each of the next three years.
“Starting with the 2025 budget, the context that’s been present for the last few years has changed and is resulting in resource shortfalls compared to the last few years,” Hicklin said. “These additional costs are now part of the core budget, which must be funded in a continuing budget outlay.”
Like other local governments in Wisconsin, the county has limits on how much it can raise property taxes, and shared revenue from the state remains flat in the face of inflation.
But unlike most cities, the county has a sales tax that will account for about 11 percent of total revenue next year.
The race between state Sen. Melissa Agard and former County Sup. Dana Pelebon will determine who controls a large bureaucracy that has a hand in everything from housing to the courts.
But the massive sales tax growth seen since the start of the pandemic has begun to slow. In 2021 and 2022, the county had $10.7 million and $10.1 million in sales tax increases, respectively. By 2023, the increase is $3.3 million. This year, actual sales taxes will be below the projected $90.3 million.
Slower sales tax growth is not unique to Dane County. In March, state sales tax revenue saw its biggest annual drop since 2016, according to the Wisconsin Policy Forum.
The district’s reserves — projected at $58 million for the end of this year — have plugged holes in recent budgets, including $28.1 million this year.
These budget concerns have already guided decision-making for this year’s budget. County employees did not receive raises like those in the previous three years, and social services contract funding remained unchanged. According to Madison Human Resources data, Dane County’s 26.5 percent salary increases since 2019 exceeded those seen in the city and the Madison School District over the same period.
Board changes
Faced with looming budget pressures, the County Council made fewer budget changes than usual during its deliberations Wednesday night.
The board added about $68,000 in operating expenses to the $813 million package proposed by interim County Executive Jamie Kuhn last month. Overall, the county’s operating budget for next year is $127 million more than the 2019 budget, adjusted for inflation.
A key point of contention among supervisors Wednesday was whether to approve eliminating two vacant deputy positions in the Dane County Sheriff’s Office to fund other positions.
The measure redirects $232,000 in part to a new assistant district attorney to help with affordable housing projects and a Spanish-language medical interpreter in the county’s Department of Social Services.
Another amendment to fund a week of overtime for the sheriff’s office to arrest people with outstanding felony warrants failed to pass.
As for the capital budget, the board placed a $10 million loan toward the $10 million Kuhn proposed for the county’s Affordable Housing Fund.
Another $8 million went to create an existing affordable housing preservation fund, a key recommendation of the housing action plan released by the county earlier this year.
In support of Madison, the board is contributing $2 million to the city’s Lakeway Project, a redevelopment of the Monona waterfront.
Dane County’s 2025 capital budget will total $112 million.
The 2025 budget continues a long-standing trend of decreasing property tax rates in the county. Per $1,000 of assessed value, the tax rate is $2.57, down from $2.73 this year.
But because of rapidly rising property values in the county, the average home in Madison, assessed at $457,300, will see an annual tax bill of about $17.
Brewing fiscal problems could force the county to make budget cuts and create new revenue streams over the next two years.