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Shared revenue threat leaves cities scrambling

Paul Snyder
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Several Wisconsin municipalities are reviewing budgets and awaiting word of shared revenue cuts from the state in light of the state’s increasing budget deficit.

The Legislative Fiscal Bureau on Tuesday is expected to release new numbers relating to the deficit. From there, cities can prioritize what programs and projects are salvageable.

“Municipalities’ ability to provide services and capital improvements is based on the shared revenue they’re able to collect from the state,” said Ed Huck, executive director of the Wisconsin Alliance of Cities. “We were looking at a tough situation already, and this is not going to help it.

“This is the most serious fiscal situation Wisconsin has ever faced.”

Although Gov. Jim Doyle and the Joint Committee on Finance previously said shared revenue cutbacks were likely, municipalities are still working to prioritize projects and jobs amid increasingly grim state budget figures.

Early projections of escalating deficit numbers could add anywhere from $750 million to $1.5 billion to the state’s existing $5.9 billion shortfall, said Rebekah Sweeney, spokeswoman for Assembly Speaker Mike Sheridan, D-Janesville.

“There are still no numbers in front of us,” she said. “We want to see those first, then consider what our options are.”

Rachel Strauch-Nelson, spokeswoman for Madison Mayor Dave Cieslewicz, said the city was told shared revenue cuts would go deeper than first anticipated.

“It’s still a little too early to answer specific questions, but we’re going to be looking at our budget projections over the next week,” she said. “The goal is to protect basic services.”

State and city leaders declined to get specific about what kind of services could be lost as the state tightens its financial belt.

But at least one leader is remaining optimistic despite the belt-tightening.

Milwaukee Mayor Tom Barrett said the city’s share of federal stimulus money could protect planned construction work on the city’s arterial roads and bridges. Yet he agreed there are no guarantees. Furloughs for workers in Milwaukee’s Public Works Department also are likely.

Although Barrett said Milwaukee has tried to stay ahead of other cities experiencing similar problems, the growing state deficit is not making it easy.

“In my 25 years in public service, I’ve never seen anything like this,” he said.

Barrett said Milwaukee receives about $240 million per year from shared revenue; he did not say how much that figure might drop.

“I’m trying to stay naively optimistic,” he said.

Huck said cities already are handcuffed by limited options to pay for public works and capital improvement projects, and they might have to find new avenues to generate revenue.

“I think there will have to be rethinking in a lot of areas,” he said. “We’ve already been told that the cities can’t go to property taxes. So what we have, really, is the state in a horrible fiscal mess without any backup plans.”

Nevertheless, Huck said, there is still time to plan in order to lessen the effects on municipalities.

“The important thing right now is that the shared revenue discussion has not taken place yet,” he said. “We have to still work with the Legislature and find ways to mitigate what makes sense.”

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