Walworth County has positioned itself as perhaps the only debt-free county in Wisconsin, and county officials said Monday they likely will stave off borrowing until at least 2021.
In the 2019 budget, all of the county’s capital funding will come from the tax levy and fund balance. The Walworth County Board approved the 2019 budget Monday, and the county isn’t forecasting borrowing for capital projects for at least another two years.
The 2018 budget saw a hike in spending for a $24 million health and human services building and $9.1 million to pay off debt. It was noticeably higher spending than the last several years, and the 2019 budget drops expenditures by nearly 25 percent—or about $49 million.
Numbers from the state show every Wisconsin county had some debt in 2016, the most recent year for which numbers were available.
Jason Stein, research director at Wisconsin Policy Forum, said Walworth County had a per-capita debt of $62 in 2016. That was the third-lowest among the state’s 72 counties, Stein said.
Dale Knapp, director of research at the Wisconsin Counties Association, said a local government being debt-free is unusual in part because of state-imposed levy limits. Because the state limits how much governments can collect from property taxes, the only way municipalities, counties and school districts may exceed their state-mandated taxing limit is by asking voters through referendum.
Knapp said new development in counties also has been sluggish since the Great Recession. Most counties have seen their property values rise by 1.5 percent or less each year since then, he said.
Walworth County Administrator Dave Bretl has said Walworth County’s overall equalized value still has not returned to what it was before the Great Recession.
Knapp said slow-rising property values have left counties raking in fewer tax dollars while costs for things such as roads have increased.
“There’s very little wiggle room, if any, in these budgets,” Knapp said. “When you put the whole pie together, county revenue hasn’t been growing much. ... You’re making a decision to put money aside for a big project or paying for roads now before the cost goes up.”
Walworth County Comptroller Jessica Conley said Walworth County had been beefing up its savings for several years to pay for the health and human services building and its final debt-service payment. She said the county had been appropriating money from savings in operations, such as vacant positions and coming in under budget.
Overall, the county had set aside $30 million for its final debt-service payment and the new building. Conley said the county avoided about $3.3 million in future interest payments by whittling its debt over the last 10 years. The county had $52.9 million in outstanding debt in 2008.
Walworth County has not borrowed for capital projects since 2011, according to the finance department. Future borrowing is possible in 2021 after a study recommended $25.1 million in updates to the county’s radio communication infrastructure. Conley said whether the county eventually borrows for that project will depend on its savings over the next several years and state funding.