A handful of villages and cities in the Milwaukee metro area considerably outpaced their fellow municipalities when it came to spending and debt levels in 2010, according to a new report from the nonpartisan Wisconsin Taxpayer Alliance.
In terms of debt per capita, Saukville ($3,353) and Sturtevant ($3,157) were in the top dozen among the 243 municipalities the Madison-based organization collected data on for its annual examination of municipal spending trends.
At the other end of the debt spectrum, Greendale was reported to have $1 of debt per capita.
The report also showed spending on operations among the municipalities. Sussex ranked the most frugal among the 18 Milwaukee-area communities in Patch's coverage area with $499 per capita in 2010.
Bayside spent the most in the Patch coverage area with $1,148 per capita in 2010, according to the report.
The average spending on operations per capita for the Wisconsin municipalities studied was $838.
Approximately two-thirds of municipal spending for operations is concentrated in general government administration, street maintenance, law enforcement and fire-ambulance services, the report indicated. On average, communities spent $560 per capita in these basic spending areas, about 1 percent more than they did in 2009.
The report also reflected the anemic economy of the last decade with municipal expenditures and debt amounts slowing. The report showed municipal spending rose 1.3 percent in 2010 after declining in 2009 for the first time in more than a decade, well off the 4.2 percent annual average increase from 2000 to 2008.
The report also indicated debt rose 3.5 percent — the second-smallest increase in a decade — in the state's most populous municipalities in 2010.
"People are like, '(Taxes) keep going up but my pay check is not going up or I have been out of a job for a year.' So there is that sentiment that we need to be restraining some of our expenses and what we are spending money on," said Paula Schafer, finance director for the City of Greenfield.
The restrained spending on the part of cities and villages has been caused by economic constraints municipal leaders face. The poor economy and the bursting of the real estate bubble has put downward pressure on revenues, forcing municipal budget offices to decrease spending.
"We have 2007 accelerated anxiety about spending more, but I remember every year saying it's a tough budget," said Shorewood Village Manager Chris Swartz, who noted that municipal spending has been constrained due to levy limits during the last decade.
Shorewood spent $884 per capita for operations in 2010, about $50 more than the state average, the report indicated.
"We still think we need to deliver those services like we always have and not compromise," Swartz said, adding village officials have been instructed to create lean processes and think strategically about the budget process.
Given collective bargaining reforms, the conservative fiscal policies of lawmakers in Madison and an economy that continues to stagnate, municipal spending is likely to stay somewhat flat in the near future.
"As employees pay a bigger share of health insurance and pension overall spending numbers are going to decline," said Dale J. Knapp, research director of the Wisconsin Taxpayer Alliance. "The question is going to become where are municipalities going focus their resources because they're going have to be, in these tight budgets, they've got to really prioritize."
How the 18 municipalities in the Patch coverage area compare in population, per-capita operations spending and per-capita debt in 2010.
Source: Wisconsin Taxpayer Alliance
It is baffling how any municipality can increase their debt load by over $3000 per resident in just one year. Those same folks would be going balistic if they just got 3k in credit card debt racked up in their names, which is essentially what has happened.
Here's the link to the village's budgets: http://www.caledoniawi.com/Villagebudgets.aspx I've also written quite a bit about the Village's debt. Here are the links for that: http://caledonia.patch.com/articles/caledonia-board-passes-2012-budget-but-not-without-a-little-drama http://caledonia.patch.com/articles/committee-eyes-borrowing-for-business-park-water-and-sewer-projects http://caledonia.patch.com/articles/discussion-there-s-nothing-sexy-about-a-tax
On a local level, municipal bonds allows local gov'ts to undertake needed large capital expenditures without raising your taxes enormously. Bonding spreads out the pain over years, as opposed to hitting you with huge tax increases in any given year to pay for, say, a major road or sewer project. If cities and villages were allowed to raise taxes without any cap to pay for capital projects on an as-needed basis, and weren't allowed to borrow and incur debt, your taxes would be up and down on a crazy rollercoaster – maybe $3k this year, maybe $13k next. Borrowing allows that to be spread out evenly over many years. Right now, interest rates on bonds are so low that it is in fact a great time for governments to borrow to take care of capital projects. The alternative you propose, given that local gov'ts in Wisconsin are tightly capped in property tax levying, is that streets and sewers and such should just deteriorate. Some public debt is bad only when markets lose confidence that it can be repaid – say Greece. We're not close to there.
I don't spend all of my money now, then take out a loan years later when the roof wears out, which is the model followed by most individuals and our government. Wauwatosa does keep reserves on hand though, and borrowing while rates are low allows you to use your reserves to make interest payments easily in the event of an unanticipated problem. So, it's not a black-and-white issue. Where debtors run into the most trouble is when the money borrowed is being used in ways that don't create any meaningful returns. In which case you can get trapped in a downward spiral having to allocate larger and larger percentage of the budget to paying interest on debt.