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State can’t share much wealth with municipalities

If one lawmaker’s prediction is accurate, local governments seeking more shared revenue amounts or higher tax levy limits to help finance municipal construction will get little help from the state this year.
“I’m not minimizing their grievance,” said state Rep. Pedro ColÓn, the Milwaukee Democrat who serves as vice chairman of the Joint Committee on Finance. “In taking the committee seat, I knew this was the year I probably wasn’t going to please anyone. People have the right to complain, but the fact is, all governments are going to have to wait (the recession) out.”
ColÓn’s prediction won’t stop local governments from asking for help.
The Wisconsin Alliance of Cities recently passed a resolution calling for the state to ease the stress on economically pinched municipalities.
The resolution asks the governor and Legislature, among other things, to either eliminate levy limits or set more realistic ones than the 2 percent level the state set for new construction growth in 2009. It also requests exempt status for any shared revenue cuts from a municipality’s levy limits.
“The combined expenditure restraints we’re seeing have brought us to the impetus of a very stressful time,” said Ed Huck, executive director of the Wisconsin Alliance of Cities. “If nothing changes, it’s going to get to a point where cities start having to delay projects that need to be done.”
Those projects could run the gamut from road repairs and sewer-system upgrades to municipal building improvements, said David Botts, director of public works for the city of Beloit.
“We’re not in any trouble as far as our budget goes this year,” he said. “But if they continue to reduce our funding levels, we’re going to have a hard time prioritizing projects and looking at things we should do and need to do.”
Huck and Botts said local matters could be made easier with increased access to shared revenue. The state’s shared revenue program skims from property and sales taxes and other sources of money to stock the state’s general purpose budget. The state also distributes some of that money to local governments.
But ColÓn said local governments likely would see diminished amounts of shared revenue as the state tries to find ways to fill its $5.9 billion budget deficit.
“They’re going to have an awfully challenging time making ends meet in their budgets,” he said of local municipal leaders. “We’re trying to make do with the deficit we’re facing, and there are clear concerns all over the place. Everybody wants more, but sometimes when you’re looking at micro issues, you’re missing out on the macro issues.”
Moreover, ColÓn said a faltering economy and multibillion dollar deficit leave the state very few options when it comes to increasing other revenue streams. Although he said he understands municipalities’ frustrations, Wisconsin could be financially hamstrung for a while.
“The fact is that state government runs a lot like any other sort of business,” he said. “If you’re not successful economically, you can’t provide services.”
But handcuffing local governments’ abilities to perform their own work and reducing the amount of money available to pay for work that can generate economic activity does not help reverse the cycle, Botts said.
“It’s a poor way to manage a business,” he said.

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