Our Views: What to do with $583K

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Thursday, September 21, 2017

Some residents will argue the $583,000 tucked inside the state budget for Janesville should be returned to taxpayers.

But demands to cut taxes in response to the budget deal brokered on Janesville's behalf by Rep. Amy Loudenbeck, R-Clinton, ignore the reason for getting the extra money in the first place.

Janesville has been pinching pennies for years because of a flawed shared-revenue formula that favors Janesville's peers. City officials have repeatedly asked legislators to fix the formula, though reforming it would have been a daunting task this legislative session. To her credit, Loudenbeck achieved the next best thing by directing some short-term financial relief to Janesville.

The state “froze” the shared-revenue formula in 2001, meaning the formula churns out payments based on old data. Two factors have conspired against Janesville: its growing population and lagging equalized property value. The result has been to give Janesville state aid of only $81 per capita, while the average municipality takes in $179.

While $583,000 sounds like a lot of money, it only amounts to about $9 per capita and won't put Janesville on par with its peers.

Nevertheless, city officials are talking about using the funds to hire additional firefighters and police officers. In particular, Janesville would benefit from another ambulance on the west side, which is serviced by ambulances from other parts of the city.

There's no talk of using the money to build, for example, a new water park or some other nonessential amenity. Officials want to shore up basic services, and only the cheapest of the cheapskates would contend the city should go without proper police, fire and ambulance coverage.

Last year, the city faced a $950,000 shortfall and contemplated making painful budget cuts and considered having neighbors cut the grass at city parks. The city avoided draconian measures only after it discovered savings from the retirements of several longstanding employees. But it wouldn't take much for the city to find itself facing another shortfall—yet another argument against returning the $583,000 to taxpayers.

When dealing with a budget shortfall, municipalities have few options for balancing their budgets except spending cuts. State-imposed levy caps prevent the city from increasing property taxes to generate more revenue. While cities can hold referendums to raise taxes, officials cannot count on fickle taxpayers to approve them.

While we're grateful Loudenbeck and other legislators supported including additional funds for Janesville in the state budget, let's not forget the Legislature is largely to blame for Janesville's predicament. To portray the $583,000 as a generous allocation would be like celebrating more crumbs falling from the table. The larger question should be: Why is Janesville on the floor and not at the table? A fairer formula would yield as much as $6 million more for the city every year, officials say.

Taxpayers wanting to pocket these crumbs in the form of a tax cut are being shortsighted. City leaders should judiciously spend this $583,000 “windfall,” while insisting the Legislature's next job should be to fix the shared-revenue formula.

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