With many municipalities facing tight budgets for 2021, the Wisconsin Policy Forum has created a data tool that shows budget trends over time and in comparison to neighboring municipalities.
(TNS) — With many municipalities facing tight budgets for 2021, the Wisconsin Policy Forum has created a data tool that shows budget trends over time and in comparison to neighboring municipalities.
The data is from 2018 because data from 2019 was not widely available. However, WPF President Rob Henken said it still provides valuable insight going into 2021 budget discussions.
“It’s a way to see how things are going pre-pandemic, to show how prepared communities are to weather the storm as a result of the economic downturn,” Henken said.
Where Racine does well
For a city that has faced serious financial woes each budget session, the City of Racine has seen little growth in spending, year to year, and does relatively well with spending per capita for some services, though not all.
Compared to other Racine County municipalities, the City of Racine has the third-lowest general government costs per citizen in the county, followed by Mount Pleasant and the Village of Rochester. And it only increased by 4.6% from 2017 to 2018.
The city also provides street maintenance at a lower cost per capita than its neighbors and has a lower debt burden per capita. On operating spending — which includes parks, public health, public works and libraries — it spent less per resident in 2018 than Mount Pleasant, which was probably due to heavy investments in preparation for Foxconn.
Racine probably also benefits from economies of scale which makes it cheaper per person to undertake any particular project. Also, services such as street repair and garbage collection tend to be delivered more efficiently in a compact urban area than in a sprawling suburb.
Another positive Henken pointed to in Racine’s 2018 budget was that it had a healthy fund balance. Unfortunately, in her presentation on the upcoming 2021 budget discussions, Kathleen Fischer, interim city administrator and assistant budget director, said those balances have gone down since then to help balance the books in 2019 and 2020. She said she did not feel it would be a good decision to dip into them any further for 2021.
“The bad news is it means they’re a little less prepared than they were two years ago for the effect the coronavirus is going to have,” Henken said. “It’s still relatively healthy. It’s one of the positive notes when looking at the City of Racine’s finances.”
Where it doesn’t
Where the city far outspends any municipality per capita is in public safety services. Mount Pleasant isn’t too far behind on spending for fire and EMS, but for policing, the city pays far more per capita than any other municipality in Racine County.
“One concern is whether sustaining those levels of spending on those services is having a detrimental effect to other services,” Henken said. “Maintaining these services in the face of stagnant property tax growth and stagnant state revenue is difficult and increasingly more difficult.”
Fischer said public safety accounts for half of the city’s operations budget. With contracts set to expire at the end of the year, the new contracts with the Racine Police Association and Firefighters Association will have a sizeable impact on the city’s 2021 budget.
The city receives far more shared revenue from the state than its neighbors but that shared revenue has remained stagnant. From 2017 to 2018 it increased by 0%, continuing the city’s reliance on property taxes for revenue.
Racine’s tax burden hit homeowners particularly hard because they bear most of the burden: 73.6% of the property tax base is residential, 20.5% is commercial, 3.7% is manufacturing and 2.2% is classified as other.
In Mount Pleasant, the tax base is 67.6% residential, 25.4% commercial; the City of Burlington is 62.7% residential and 27.9% commercial. So while Racine’s general budget per capita is lower than Mount Pleasant and Burlington, in Racine homeowners are paying the brunt of the taxes.
It probably also stings Racine homeowners the worst because they have the least to spare. The chart that shows the average reported income in each municipality in Racine County shows the City of Racine is dead last.
The Wisconsin Policy Forum’s Municipal Datatool can be accessed at: wispolicyforum.org/research/municipal-datatool-examining-and-comparing-wisconsin-cities-and-villages/
©2020 The Journal Times, Racine, Wisc. Distributed by Tribune Content Agency, LLC.
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