Mayor Rhodes-Conway Announces 5-Year+ Plan to Balance Budget, Avoid Service Cuts

For Immediate Release
July 16, 2024

Mayor Satya Rhodes-Conway outlined a strategic long-term financial blueprint that would carry the City through the next 5 years. She gave details about this approach and took questions from Alders at the Common Council’s July 16 meeting. Given the strict restrictions imposed by the State and the city’s rapid population growth, Madison’s annual budget process needs to be part of a multi-year plan that allows city leaders to make prudent financial decisions while addressing the core needs of our community.  

“Our job as a city government is to create and maintain the infrastructure that underpins Madison’s quality of life. The irony of our present fiscal situation is that Madison is thriving by many metrics and should have the means to prepare for a bright future while providing opportunities for all of our residents to prosper,” said Mayor Rhodes-Conway. “Yet, we have faced structural deficits for more than decade. This is a direct consequence of the State Legislature interfering with Madison’s ability to govern responsibility.”

A long-term approach to city budgeting will also allow more input from the community. This will help the Mayor and the Common Council gauge what services residents value most while considering the City’s limited revenue options moving forward.  

“We have a responsibility to ensure tax dollars are spent wisely, which is why we held public information and feedback meetings on the budget earlier than ever before. There will be more opportunities for residents to have their voices heard,” said Council President Yannette Figueroa Cole. “For the most part, what I’m hearing from residents is they value the city services Madison provides. We need a clear path forward on the budget so our city government reflects the priorities of the entire community.”

In her address to Alders, the Mayor detailed two 5-year+ budget plans. The first assumes a successful $22 million referendum that must be approved by the Common Council as well as voters in November. This plan would avoid permanent cuts to city services in 2025 and layoffs of city staff. It would also constrain reliance on new special charges in future budgets. A referendum in 2025 would raise property taxes by $20 per month on the average household. However, this path will prevent another budget shortfall until at least 2030. It will also provide a window in which Madison can work with other municipalities across the state to advocate for the State to provide financial relief to local governments in Wisconsin.

Failing that, balancing the budget will require $6 million in permanent cuts to city services in 2025 and a steady increase in new fees, one of the few ways the State allows local governments to raise revenue. But even with both cuts and fees, Madison would face another round of tough choices as early as 2027.

Both plans follow the recommendations of the City’s financial experts to gradually use a larger-than-expected general fund balance – or “rainy day fund” – as part of the solution over several budget cycles. This will help balance future budgets while preserving Madison’s triple-A credit rating, which saves the City money over the long-term.

For the past 14 years and under the leadership of three mayors, Madison has exhausted ways to maintain service levels to an increasing number of residents. That’s largely because there hasn’t been corresponding growth in revenue that matches our population increase of more than 5,000 residents each year. Despite being a driving force in Wisconsin’s economy, the State provides Madison just $29 per resident in shared revenue. The statewide average for municipalities is $195. A more equitable distribution of shared revenue in the last state budget would have easily cover Madison’s projected deficit in 2025.  

“Even so, we can’t keep kicking the can down the road. Madison must continue to find efficiencies wherever we can and to seek the least regressive revenue options. What we can’t do is keep asking city staff to do more with less year after year,” said Mayor Rhodes-Conway. “City leaders need to address the current budget shortfall without creating even larger ones in future years.”

Madison isn’t alone. There has been a steep rise in municipal referendums in recent years precisely because the State Legislature is failing to meet the needs of Wisconsin cities. This is why nearly 50 municipalities have turned to referenda in the past 2 years, and why Fitchburg, Oregon, Monona, and Maple Bluff are all considering voter referendums in November. It makes zero sense that communities have to ask voters for a tax increase while Wisconsin has a $3 billion surplus left over from the last biennial budget.  

Ultimately, the State Legislature needs to return local control to local leaders. As Madison continues to help build a coalition of Wisconsin cities to lobby the State for fairer treatment, a 5-year+ budgeting strategy is the most honest and straightforward approach to governing our growing city.  

“A referendum is not my preferred solution. But it is the most progressive and realistic option for Madison given the current political makeup of the state government,” said Mayor Rhodes-Conway. “We’ve long provided a high quality of life in Madison and I’m fighting to continue that legacy. It’s what our community is asking for and what our residents deserve.”