Janesville budget calls for wheel tax
City Manager Eric Levitt said his goals in creating the budget were maintaining services and preserving jobs.
The council received the budget Monday. Study sessions begin at Tuesday, Oct. 18.
Levitt said a user fee such as a wheel tax would help “diversify revenue” at a time when state shared revenues are dropping and when a state cap limits the amount the city can collect through property taxes.
The wheel tax would collect $10 for each licensed vehicle kept in the city.
The proposed city budget includes a spending increase of about $550,000 for operations and a tax levy increase 2.43 percent.
Levitt does not believe the levy increase would hit the average person hard, but the recent revaluation could affect people differently, he said.
The value of the average Janesville home increased 5.35 percent—from $114,000 in 2010 to $120,100 in 2011—after the recent revaluation. Commercial property increased an average of 27 percent.
Under the proposed budget, the owner of the average home would pay $946 in city property taxes, down from $955.
The $10 wheel tax next year would come on top of a $40 garbage disposal fee the council authorized this year.
“I am always a person who tries to preserve services,” Levitt said. “And the perception I get from the public is that a lot of (existing) services, especially the most expensive, are very supported by the public.”
About 60 percent of city spending is for public safety, and the council in past years has avoided cuts in fire and police services. The public also appears to support a high service level for snow removal, Levitt said.
Levitt said he hesitated to cut services because he wonders if the city could ever find money to bring them back.
“With that, I don’t resolve some of the budget challenges we will have in future years,” Levitt said. “It resolves 2012 but still leaves budget challenges for 2013 and on.”
For instance, revenues could increase next year if interest rates go up, Levitt said. Union contracts expire at the end of 2012 and that will impact the 2013 budget, as well.
Levitt put $40,000 in the 2012 budget to hire a consultant to look for efficiencies to run the city. About $10,000 of that will be devoted to studying the best way to handle stray animals.
The budget includes no layoffs, although Levitt has frozen positions and eliminated others.
A key position that would remain open is the community development director, previously filled by Brad Cantrell. Levitt said he believes the department can continue to function because building activity has slowed.
The position of recreation director, formerly held by Bonnie Davis, would remain unfilled for the first three months of 2012. A deputy fire chief position would remain open for a second year.
Levitt several years ago eliminated the position of leisure services director, vacant since Mike Williams left.
“We have very slim staff in recreation, and we’re going to have to deal with some staffing issues there,” Levitt said.
The city realized those savings without layoffs, Levitt said.
As a result of the vacancies, the city will save about $500,000 in administrative salaries in 2012, Levitt said. The savings increase to about $600,000 when protective services are included, he said.
The 2012 proposed budget does not fill open positions for a human resources assistant, a police officer position and a community service officer.
“That creates a lot of new challenges for the city going forward on how we deal (with fewer staff),” Levitt said.
The wheel tax would generate about $550,000 for street maintenance. That money would come off property taxes.
The wheel tax would help compensate for a cut in state revenues of about 10 percent, or about $864,000. The state revenues decline is the primary reason Levitt opted for a wheel tax, he said.
A wheel tax “diversifies our revenue,” Levitt said. Nobody expects state shared revenues to increase, and they likely will continue to decrease, he said.
Levitt considers a wheel tax more of a user fee because people can exercise choice over the number of vehicles they license, he said.
The council has options other than a wheel tax. Levitt during the budget process will give them other options, such as using more reserve money and reducing transit, fire and police.
Spending cuts included in Levitt’s proposal include increasing the time between mowing parks and removing water fountains that must run continuously.
The proposed 2012 budget also:
-- Includes a negotiated raise of 1.5 percent to 1.75 percent for union employees. It does not include an increase for non-union employees. Levitt said he would consider using any budget surplus from 2011 as a lump sum payment to employees that would not affect employee salaries going forward.
Non-union employees this year began paying half of their pension costs. Levitt said he asked the unions last spring to reopen their contracts to also pay for their pensions, but union members declined.
-- Uses $825,000 in reserves to buffer the budget. The city planned to use $890,000 in reserves this year but will be able to return about $500,000 because of unexpected money it received from closing a tax increment financing district and selling land to the Department of Transportation for the Highway 26 project.
-- Includes a minimal increase for health care costs. The city has been fortunate to not have major illnesses among staff, Levitt said.
-- Closes the ice arena for three months during renovation. That saves $9,000 in subsidy. Full-time staff will be shifted to other summer operations.
-- Includes $5,000 in fee revenue from permits for alcohol in city facilities, Dawson Field and parks.
-- Maintains transit.
“This one, I went back and forth on,” Levitt said. “In the end, if we start cutting services and transit routes, would we ever be able to put them back in?” he asked.
“It was better to put a budget together that keeps those types of services, benefits the public and keeps people employed, which is a good thing,” he said.
-- Includes $10,000 for shade trees for terraces and $8,774 to spray weeds.