Janesville would lose most in state aid

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Friday, May 6, 2011
— A recent memo from the state’s Legislative Fiscal Bureau doesn’t change the fact that Janesville would lose a bundle of money under Gov. Scott Walker’s suggested budget.

It rubs salt in the wound.

Of 193 cities in Wisconsin, Janesville’s percentage of loss is third largest, said Jay Winzenz, assistant city manager.

The bureau released figures showing the impact of the governor’s proposal to reduce state aid and freeze property taxes. State aid includes shared revenues and other money, such as recycling and transit funding.

The average city would see a 3.3 percent reduction in revenue.

Janesville’s reduction is 5 percent.

The only cities facing bigger cuts are Manitowoc and Kiel.

“The raw number isn’t any worse than what we had expected, but I do think it puts into perspective how disproportionately hard Janesville is being hit,” Winzenz said.

Janesville’s reduction is especially alarming during one of the worst economic downturns in city history, exacerbated by the GM plant’s closing in December 2008, he added.

“At a time when this community can least afford to be hit this hard, we’re being hit this hard.”

Janesville will lose $1.9 million out of its general fund budget of $41.6 million

Winzenz said Janesville has been frugal the last decade and did not raise its levy to the maximum allowed by the state.

“What ended up happening is when they reduced the shared revenues and the aids, because our base was already low, the shared revenue and other aid represented more than 5 percent of the base as compared to other cities.”

The formula used to distribute state aid hasn’t changed in years, and that’s one of the problems, Winzenz said.

The council Monday is scheduled to approve a letter to the state and legislators who represent the city detailing the cuts’ impact. City Manager Eric Levitt and several council members have met with legislators, Winzenz said.

Could things change before the budget is passed?

Winzenz said the state might be more generous with recycling aid, but he doubts much will change with shared revenues.

“What unfortunately ends up happening is the state reduces that pot of shared revenue to save money and hold the line on income,” Winzenz said. “But it ends up passing it to the local entities. The difference this time is we have very little in ability to make up that decrease.”

Winzenz said the gap will likely be made up with spending cuts—meaning a reduction in services—and perhaps fee increases.

The city’s Democratic senator, Tim Cullen, said he is aware of the problem and doesn’t think Janesville should have to live with it. The formula is old and can be changed, he said.

“Budgets are a set of priorities,” he said.

Cullen said he would be willing to vote for a budget with changes, and this change would be one of them.

Cullen, however, said it is “not at all clear to me that the administration is interested in any kind of a bipartisan budget. The message I’m getting indirectly is they feel they’d have to make too many compromises to attract Democratic votes and that they would just as soon do it without.”

The city’s Republican representatives would have a chance to demand changes if they intend to vote for the budget, Cullen said.

Republican Rep. Joe Knilans agreed that it’s hard to “choke down” a 5 percent reduction.

He said he is working with the governor and the GOP leadership to see what can be changed. Recycling funds will probably escape cuts, and he believes highway funds will be spared, as well, Knilans said.

“There are some savings there to help cope with what the city of Janesville is dealing with,” he said.

Knilans noted that the city signed contracts with several unions that will shield its members from immediately contributing to their pensions, something that Walker said would help cities deal with state cuts. Still, that’s just a small percentage of the hole, he acknowledged.

“The funding formula isn’t really working right for Janesville,” Knilans said.

The formula was written when Janesville was more affluent, he added.

“It’s hard for me to accept that (today), living in Janesville and seeing a very different story … With General Motors and the supplier plants, it was good income, and now those are gone.

“And that’s a shock to our system down there.”

Last updated: 5:17 pm Thursday, December 13, 2012

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