'A scarcity of resources': Dane County Board passes budget as problems loom ahead

Slowing revenues and rising staff costs are creating a bleak budget forecast in the years ahead for Dane County as the County Board put its final touches Wednesday on a $925 million budget for 2025.

Brewing fiscal problems could require the county to make budget cuts and create new revenue sources within the next two years to prevent insurmountable budget gaps like those seen by the city of Madison, according to a memo from County Finance Director Chuck Hicklin to elected officials earlier this month.

Driving the looming budget gap are the 233 new employees hired by the county and a nearly 20% increase in median wages that have cost nearly $39 million since 2022, according to Hicklin’s memo. Funding for social services contracts have jumped $11 million, or 21%, over the same period. A new health insurance contract will add $10 million in costs in each of the next three years.

“Beginning with the 2025 budget, the context present in the last several years has changed and is leading to a scarcity of resources when compared to the last several years,” Hicklin said. “Those additional costs are now part of the base budget that need to be funded in a cost to continue budget.”

Like other local governments in Wisconsin, the county has limits on how much it can increase property taxes, and shared revenue from the state has remained flat in the face of inflation.

But unlike most cities, the county does have a sales tax, which will account for about 11% of its total revenue next year.

But huge sales tax growth seen since the start of the pandemic has begun to slow. In 2021 and 2022, the county had $10.7 million and $10.1 million jumps in sales taxes, respectively. By 2023, the increase was $3.3 million. This year, actual sales tax hauls will be below the projected $90.3 million.

Slower sales tax growth is not unique to Dane County. In March, statewide sales tax revenue posted its biggest year-to-year decline since 2016, according to the Wisconsin Policy Forum.

The county’s reserves — forecast at $58 million for the end of this year — have plugged holes in recent budgets, including $28.1 million this year.

These budget problems have already guided decision making for this year’s budget. County employees did not receive raises like those of the previous three years, and social services contract funding remained unchanged. According to Madison human resources data, 26.5% pay raises for Dane County staff since 2019 have outstripped those seen by the city and Madison School District over the same period.

Board amendments

Faced with looming budget pressure, the County Board made fewer budget amendments than usual in its deliberations Wednesday night.

The board added about $68,000 in operating spending to the $813 million package proposed by interim County Executive Jamie Kuhn last month. All told, the county’s operating budget for next year is $127 million more than its 2019 budget when adjusted for inflation.

A key point of contention among supervisors on Wednesday was whether to endorse the elimination of two vacant deputy positions in the Dane County Sheriff’s Office in order to fund other positions.

The measure redirects $232,000 in part to a new assistant county attorney to help with affordable housing projects and a Spanish-language medical interpreter in the county’s Department of Human Services.

Another amendment to fund a week of overtime for the Sheriff’s Office to arrest people with outstanding felony warrants failed to pass.

For the capital budget, the board tacked on $10 million in borrowing to the $10 million proposed by Kuhn for the county’s Affordable Housing Fund.

Another $8 million went to the creation of a fund to preserve existing affordable housing, a key recommendation from a housing action plan released by the county earlier this year.

In a boost for Madison, the board is contributing $2 million to the city’s Lakeway project, a redevelopment of the Monona waterfront.

Dane County’s 2025 capital budget will total $112 million.

The 2025 budget continues a yearslong trend of declining property tax rates in the county. Per $1,000 of value, the tax rate is $2.57, down from $2.73 for this year.

But because of fast growing property values in the county, the average Madison home valued at $457,300 will see its annual tax bill go up about $17.