After completing his first week in office, Mayor Paul Soglin said he fears the state of the city’s budgets through 2012 could be even grimmer than previously anticipated following a number of official briefings.
Soglin said local governments are typically concerned as the budgetary process begins to transition from one year to the next but said he is more pessimistic about the concern associated with the escalating costs of operating a government.
“We’re confronting about a $2-3 million problem beyond the normal escalating costs of operating government – it’s a difficult challenge, but it’s manageable,” Soglin said. “We’re facing a dilemma that’s probably in the range of $20 million – maybe more. It’s a dilemma of the gap between what we lose in revenues and what we’re constrained from spending.”
Gov. Scott Walker’s proposed budget outlines strict cuts for municipal government spending – a move Soglin said makes it difficult for the city to continue providing all of its current services. He argues that Walker’s proposal does not allow Madison to raise taxes to bring the 2012 budget to a level where inflation and growth in the city have been accounted for.
Soglin said he was particularly concerned about energy costs as the city’s largest cost aside from labor – while fuel is expensive, it is critical to the operation of buses, police, fire, snow removal and public transit.
“If [the gap in spending versus intake] is not resolved, that represents cuts that will have to be made next year – as for what those are, we are not even speculating at this point,” Soglin said. “We are first looking at strategies to contend with the problem and strategies for changing what will happen in the Legislature this summer.”
City Comptroller Dean Brasser said the state budget proposal has forced the city to look at the 2012 budget much earlier than previously anticipated, despite the lack of solid information about things like costs of fuel and other important city expenses.
Brasser said Walker’s proposal takes about $8.4 million in state aid from the city, representing about 20 percent of the state aid Madison received this year. He said while revenue is taking a sharp hit, spending is also anticipated to rise as health insurance, pension costs and fuel prices shoot up.
Based on the current price of fuel, Braser said the city could expect expenses for the commodity to rise a couple of million dollars above what has been budgeted for the 2011 budget, causing roll over concerns for 2012.
Newly elected City Council President Ald. Lauren Cnare, District 3, said Madisonians should prepare for all of the normal courses of revenue the city receives for services to be lessened.
Cnare, who represents the far east side, said the community needed to engage in a discussion to decide what services are most important to Madison’s quality of life.
“We live in an economy where the economy is not going to go up, but prices will, so while we have so many vehicles to fuel, for example, we face the cost of fuel with no big windfall anywhere on the horizon,” she said. “We haven’t had a lot of development to add to the tax roll, so it’s sort of a perfect storm.”
