We're hearing dire warnings of budget calamity from city hall this week. I balanced eight budgets and, if you know what you're doing, this one doesn't have to be all that bad.
Sure, the city of Madison took a $5.6 million hit in state aids, but we also saved $6 million next year in concessions that I negotiated cooperatively with our unions. So call that a wash.
The city's biggest expense is in wages and benefits, but the existing contracts can't be reopened, because if they are, the unions will be subject to all of the draconian anti-union provisions in the new state budget. In short, the unions would go away immediately.
So wringing still more savings out of our city employees isn't going to happen, unless the police and fire unions voluntarily take some of the same hits the other unions did. (These unions aren't subject to the provisions of Walker's law.) But, in my view, the goal of a progressive city shouldn't be to take even more from our public employees, but to fight to return them to equity at some point in the future.
If you start with the 3% tax increase that the mayor is already proposing, you're still left with an $11 million deficit. But much of that will melt away, and here's why. The initial, mid-summer projections from the budget office are always gloomy. That's because the budgeteers are doing their jobs and being conservative in their projections, on everything from fuel costs to health insurance. Borrowing costs are always a big one. We never actually borrow as much as is projected, so those numbers routinely come down substantially. As these numbers firm up between now and October, they almost always improve.
Then there are all kinds of revenue enhancements available outside of the property tax. These include everything from projecting higher earnings on investments to parking ticket revenues to a new environmental services fee.
The only thing I find peculiar about the start of this process is the decision by the mayor to hem himself in with a 3% tax increase. No one can have any idea at this point in the process how those projections will come in or what the public will say it wants in hearings and other opportunities for input. I had promised the most inclusive budget process ever. To my knowledge, there haven't been any public meetings so far on the budget, so how do we know how much of a balance of tax increases and service cuts the public might want?
What's likely to happen, if the city forgoes the extra $3.5 million or so that it could take in by staying that far under the state imposed levy limit of 4.9%, is that there would be severe cuts, like layoffs of police officers, closings of fire stations, cuts to park or street maintenance, or deep cuts to community services. Or there might be a raid on the city's long-term savings account, which would jeopardize our long-term fiscal stability and Aaa bond rating.
I always thought it was better to let more of the process play out, get more solid numbers, and most importantly, hear from the public before I decided on a levy amount. In fact, the levy was always the last decision I made, not the first.
It's possible that this will turn out to be the worst budget ever after all, but at this point in the process I see potential solutions and more potential for creative ideas coming from the community. Let's hope that the grimness in city hall doesn't become a self-fulfilling prophecy.