County Executive Falk Says Governor's Proposals Will Impact Local Services

January 22, 2002
Sharyn Wisniewski, 267-8823

FOR IMMEDIATE RELEASE January 22, 2002 Contact: Sharyn Wisniewski (608) 267-8823 Kathleen Falk, Dane County Executive, today said that the governor’s state budget cutting proposals mean that county government will have to reduce services for residents. “Care for the disabled, elderly, and children, law enforcement and road repair, are just some of the services that could be affected by the Governor’s cuts,” said Falk. She continued: “So far, the Governor’s Office has not released the information that enables us to precisely calculate the cuts for Dane County. The best case scenario is that Dane County will face a cut in state funds of about $2 million and it could be much worse -- up to $5.5 million.” “The Governor intends for these cuts to happen this year. We have already passed our budget which contained across-the-board and other cuts. These cuts will have to result in cuts in Dane County programs and services this year.” “There is no easy way to make up a $2 or $5 million cut in state funds. And it is not fair for the Governor to place this burden on Dane County’s residents. Dane County has balanced its budgets and earned two AAA bond ratings. My limit on the property tax levy is stricter than the one proposed by the Governor for local governments. For four consecutive years, the budgets I proposed and approved have hit our tougher standard.” Falk criticized the Governor’s proposal to unexpectedly eliminate the state’s partnership with Dane County to keep the World Dairy Expo in Wisconsin. “Dane County has made huge commitments to build new facilities at the Alliant Energy Center to keep the World Dairy Expo in Wisconsin because that event is so important for all of Wisconsin’s dairy farms and industry. By eliminating the state’s annual contribution of about $250,000, the Governor has reneged on our partnership for that important event.” An analysis by the county’s Department of Administration, based on the initial information available, outlines the major impacts on Dane County follows: January 22, 2002 TO: Kathleen Falk Dane County Executive FROM: Bonnie Hammersley Acting Director of Administration RE: Governor’s Budget Reform Bill Staff in Department of Administration have reviewed the summary of the Governor’s Budget Reform Bill. Although we will need more information before more precisely quantifying its impact on Dane County, the largest impact appears to come from proposed reductions in the shared revenue program. Shared Revenue The Governor’s proposal reduces the total shared revenue program by $350 million in each calendar year 2002 and 2003 and eliminates the remaining $679.4 million in 2004. The Governor’s document does not specifically address how this reduction will be applied to local governments. Rather, it states that the reduction is to be distributed using a per capita formula administered by the Department of Revenue and that the per capita rate is expected to be approximately $39 per person. Applying this rate to the County’s population would amount to a $16 million reduction for Dane County. Since the County’s total shared revenue payment is only $5.5 million, the entire payment would be eliminated. It is also possible that the reduction will be calculated using a formula that distributes the $16 million cut among the County and each of its municipalities. In the absence of better information from the Governor’s office, we also estimated the impact on Dane County by assuming that we would collect the same proportion of total shared revenue under the smaller base amount. Dane County’s shared revenue payment for 2002 was expected to be $5.5 million, which is approximately 0.53% of total shared revenue payments statewide. If the County were to receive the same percentage under the reduced shared revenue total, our payment would be reduced to approximately $3.62 million. This is a reduction of over $1.7 million. Under the Governor’s proposal, this reduction would apply to each of our fiscal years 2002 and 2003, and the remaining $3.62 million would be eliminated by 2004. Local Property Tax Levy Limits To ensure that local governments do not fill the gap created by smaller shared revenue payments with property tax increases, the Governor’s proposal limits levy increases to the combined rate of population and inflation. This will not have an effect on the County since you have always used this formula to determine the levy. In fact, the Governor’s proposal applies a less stringent standard because it exempts debt service and costs for complying with court orders from the levy limit. In addition, the State imposed levy limit could be exceeded through referendum. Medical Assistance Another component of the Governor’s proposal takes $50 million in general purpose revenue out of the Medical Assistance base and replaces it with anticipated IGT revenue. The receipt of these funds is not guaranteed. As you know, IGT revenue is a significant revenue source for the Badger Prairie Health Care Center. The 2002 County Budget contains $5.5 million in IGT funding. We have two concerns about this shift. First, if the $50 million in anticipated IGT revenue from the federal government does not materialize, the State would have to make up the difference using other funding sources or by cutting payments to counties. Second, replacing general purpose revenue in the Medical Assistance base with IGT revenue means that there may be fewer resources available to aid county nursing homes. The Legislative Lobbyist is continuing to research this item to determine the impact of this shift on Dane County. World Dairy Expo Partnership The Governor’s proposal eliminates the State’s $240,000 commitment to help fund the costs of building and operating the Exhibition Hall to accommodate the World Dairy Expo. It is our understanding that this commitment was made between the County, State, and private sector to help keep the World Dairy Expo in Wisconsin. The State has been providing this funding since 1994 as authorized in Chapter 93.29 of State Statutes. State Agency Reductions The Governor’s proposal reduces most state agency budgets by 3.5% in 2001-2002 and 5% in 2002-2003. Depending on where these reductions are made, the impact may be transferred to the County. However, the magnitude of this shift is impossible to predict at this time. Other Impacts The Governor’s proposal does not address the reduction in Public Defender funding that was included in Act 16 (the State Budget). This reduction could cost the County an additional $1.8 million in 2003. The Budget Reform Bill raises the reimbursement rate paid to the County to house probation and parole holds to $37 per day. This new rate will increase our annual revenue for probation and parole holds by approximately $60,000. I hope this information meets your needs. The Department of Administration will continue to gather information and share it with you as it becomes available. If you have additional questions, please do not hesitate to contact me.