David Michael Miller
Nine of the 20 members of Madison’s Common Council, which meets in the City County Building, were replaced on April 2.
The Common Council needs to focus on things like service cuts, public health and the social justice issues that impact people's lives directly.
It’s time for local governments in Dane County to make some cuts in response to the economic dislocations caused by the coronavirus epidemic. And, unfortunately, to be meaningful they’ll also have to be somewhat painful.
Thousands of small business owners and their workers have been without income or suffering drastic reductions in their pay for the last month or more. One in three Wisconsin small businesses may never reopen their doors. Big businesses are hurting too. Madison’s Exact Sciences recently announced $400 million in pay and benefit cuts, including voluntary and involuntary furloughs and reductions to executive pay and director compensation.
You might think that in the midst of a pandemic the last people to get hit with pay cuts would be health care workers. You would be wrong. UW Health and UnityPoint, which owns Meriter Hospital, recently announced 15% pay cuts for doctors and 20% cuts for senior administrators plus unpaid furloughs for other workers. SSM Health, which owns St. Mary’s and Dean Health clinics and facilities in three other states, just announced that it would furlough about 5% of its workers.
Other state and local governments are acting as well. The city of Los Angeles is planning to impose 26 unpaid days of leave on its workers while Detroit has laid off 200 and furloughed others. Michigan Gov. Gretchen Whitmer, a Democrat and a short list candidate to be Joe Biden’s running mate, has furloughed 6% of the state’s workforce.
And just Wednesday, as this blog was being finalized, Gov. Tony Evers’ administration announced a 5% cut in state spending, though no specifics are available yet.
Yet, despite all that, the city of Madison, Dane County and the Madison Metropolitan School District have not cut, furloughed or reduced hours for their employees. It’s just not plausible that cuts aren’t possible and not acting will create a growing credibility problem for these institutions. It’s time for local leaders to make some really hard choices.
Credit the school district with releasing a preliminary budget for next year that would eliminate 50 positions and keep property tax increases to about $46 on the average home. But that is only a first draft and the district notes that there may be cuts in state aid coming from the Legislature as the virus has ruined the state budget as well.
Congressional Democrats have been pushing for some relief for state and local governments, but they’ve run into resistance from Republicans. In fact, Senate Majority Leader Mitch McConnell is using this as a wedge issue, falsely accusing blue states of feeding off of thrifty red states. Let’s hope the Democrats prevail, but even if they do our own state and local governments are very unlikely to be made whole just as businesses and individuals, who are getting federal assistance, are still taking a huge hit.
Virtually everyone is going to struggle to pay their taxes and it would add insult to injury if local governments were to propose tax increases this fall while not imposing any pain on their own organizations.
And, of course, this is a community that talks a lot about affordable housing. Property taxes for homeowners, and the portion of rent that winds up helping pay the landlord’s property taxes, are a big part of that equation. And property taxes are added into the commercial leases paid by restaurants and other small businesses. So, if we care about affordable housing and local small businesses, we also have to care about the property tax burden.
Let me focus on city government since that’s what I know best. There are some relatively painless savings from things like unused travel budgets and reduced energy costs at city buildings, and you can always impose a hiring freeze. But the lion’s share of the city budget is in existing personnel. It’s a tough reality, but significant savings are only possible by eliminating positions and imposing unpaid furloughs or pay reductions, just as thousands of businesses, hospitals, the UW and other governments are doing.
Across-the-board furloughs, as the UW has imposed, won’t work for the city. This is obviously not the time to cut the public health agency, and fire stations still need to be staffed around the clock. We wouldn’t want to cut the clerk’s office as we gear up for August and November elections, which, let’s hope, will not be a repeat of the debacle in April. Disrupting regular garbage pickup would have health implications.
But Metro bus service has been cut back and calls for police service are down 23%, while Monona Terrace is shut down completely, in-person library visits are suspended, and it’s likely the Goodman Pool will not open this year. Some parking restrictions aren’t being enforced.
City government is already taking a hit from reduced revenue in everything from the room tax to parking tickets. But that’s part of my point. The city can’t complain that room tax revenues are down, for example, and then make no moves to cut costs at Monona Terrace, where much of that revenue ends up. To have any credibility at all with taxpayers, a serious attempt at balancing the books needs to be made.
An overall salary savings goal of 5% or so would be painful, but not unrealistic especially when you look at what the private sector is going through. That, combined with some federal assistance (if it happens) and healthy reserve funds, should make a property tax freeze an achievable goal. In fact, to not achieve that goal would be unfair to all those people who pay the taxes and are feeling the hurt from this crisis, which, after all, is pretty much everybody.
