Soglin: 'It is imperative that we work to reduce borrowing.'
In announcing his 2012 capital budget Tuesday, Mayor Paul Soglin pointed to two main culprits behind his spending cuts: mounting city debt and state budget cuts.
Soglin's $196 million capital budget proposal, his first since taking office in April, caps borrowing at $38.7 million. As a result, the mayor said numerous projects would need to be canceled and services cut for as long as possible or until state funding is restored.
During a press conference Tuesday, Soglin said he would use his position as mayor to push back against state lawmakers and get the message across to Madison residents that the city was shafted in the funding distribution.
Dane County makes up 8% of Wisconsin's population, but accounts for 10% to 11% of the state's income tax and almost 14% of the state's sales tax, Soglin said. However, the city does not get a fair return on the state income it generates.
"That money does not come back to Madison -- it gets distributed all over the state," Soglin said. "And, when Madison's economy suffers, the state of Wisconsin suffers. All those folks who take joy in trashing Madison have to understand the nature of the contribution we make to the state's economy."
Ald. Mike Verveer, District 4, said he does not anticipate any relief coming from the state Legislature anytime soon.
Gov. Scott Walker's biennial budget, passed this summer, places heavy levy limits on local municipalities and doles out significantly less in shared revenue payments, he noted.
"The big concern, of course, is that the governor and Legislature have made life very difficult for us in City Hall as it relates to trying to finance our operations the next year," Verveer said. "Still, I don't think there's much hope at all we will see any relief from the state in shared revenue payments because they've dramatically cut into us and into other local municipalities around the state."
In any case, any new revenue the city produces over the next five years will go toward repaying borrowed dollars, Soglin said. "It is imperative that we work to reduce borrowing. It is not enough to keep it at the same level as last year."
Sogln said money that would have ordinarily been used to plow streets, maintain parks and provide public health and safety services is going to be put toward paying debt service.
Renovation of the Central Library and redevelopment of the Don Miller site on East Washington Avenue will proceed, but funding for new items for the Madison fire and police departments will not. Soglin also said he would have to cancel or postpone several street projects altogether.
Soglin also proposed cutting tax increment funding for the redevelopment of the Edgewater Hotel from $16 million to $3.3 million, which could jeopardize the project. He is recommending funding for training services for the city's police and fire departments, as well as for pedestrian, bike and transit projects and energy-efficient prototypes for city agencies.
Verveer said one of the most significant projects being postponed is the remodel of Library Mall on State Street, which he said would have been planned in 2012 and completed by 2013.
"The mayor made some tough choices as to delaying some street projects that, if we had the money, would be no-brainers next year," Verveer said.
City departments requested $231 million in spending funds. Soglin's recommendation for $196 million in spending is $53 million less than was authorized in the 2011 capital budget.
While the proposed budget covers the city's basic needs, Soglin said his cuts would be hard on the city and not sustainable in the long run.
"This is the toughest capital budget the city of Madison has ever faced, and the coming operating budget will be the city's toughest operating budget, and I think the numbers justify it," Soglin said. "I did not get any pleasure out of this -- these were actions that are absolutely required by the circumstances but cannot be sustained in the long term in this city."
The capital budget was introduced to the Common Council Tuesday night; the operating budget will be released at the beginning of October.
