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Q&A: 'A fight to preserve what we have': Alder MGR Govindarajan explains Madison's budget deficit

Many city officials are facing a $22 million budget Shortfall is in the foreground for them. The Madison Common Council is currently discussing ways to close the gap after passing a referendum that will raise property taxes higher than would otherwise be allowed under state law.

District 8 Ald. MGR Govindarajan sat down with The Daily Cardinal to explain the budget process, what it means for students and how Madison plans to fix it.

This interview has been edited for clarity and brevity.

What exactly does the city of Madison see as a problem?

There are two budgets: one is called the capital budget and the other is called the operating budget.

Think about the capital budget for your one-time expenses. For example, we want to build a new bridge. We will not be building this special bridge every year, it is just a one-off funding. Or we do the BRT, [so] We need to eliminate these bus lanes. This is a one-time fee.

In the operating budget we have a deficit of $22 million. These are your recurring fees – this is your salary, these are your pensions, your healthcare. In total, this all accounts for around 60% of the operating budget. If the city has debts, we pay them off through the operating budget. If we have programs that are funded by the city, such as a rehabilitation program or youth incarceration prevention, we fund those programs there. We also use this budget to finance non-profit partner programs.

If we talk about the $22 million deficit for 2025, that equates to about 220 jobs. These 220 people are endangering the entire Department of Roads – that is snow removal, that is cleaning your streets. There are a variety of things that residents rely on every day.

How does the budget process work?

First, the agencies prepare the budget requests and provide this information to the mayor. This information tells the mayor what he wants to cut and/or what he needs. After this initial process, the mayor then creates the capital budget. Shortly afterwards, the operating budget is published, the so-called “executive budget”. This is where the mayor can add or reduce funding for new programs.

The budgets are then handed over to the Common Council. Two huge folders compile all the information, and here alders can add their own changes to try to change the budget and add their own priorities.

There is usually money left over that the Alders can share and use to fund district-specific projects. It went from $200,000 to now $0. This year it will be a struggle to keep what we have.

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What causes the budget deficit?

This problem is not new. Before 2011, the state parliament gave us money according to a formula. The formula stated that the city would receive a 1-2% increase year over year. This is called shared revenue. To compensate for inflation, the city received an additional 3% increase.

However, in 2011, the 3% increase in inflation was removed. That became a problem. Ultimately, inflation will still rise. We weren't getting enough money to cover that inflation rate, and so we slowly started to see a growing deficit that got bigger and bigger since the end of the 3% inflation spike. We have had a budget deficit every year since 2011. Thanks to one-time federal COVID-19 relief funds, we were able to delay the problem a bit. These funds have now expired.

In the past, the city has tried various ways to address this issue. For example, some fees – water supply and ambulance services – have been increased, parking enforcement has been removed from the police budget and is now self-financing from fee revenue, and budgets have been cut. With a $22 million deficit, there aren't enough opportunities to make similar changes.

We also worked with the governor. [Tony] Evers for several years. We asked him for more money from shared revenue, which he always agreed to and included in his budget proposal. However, the legislature always removed it.

We also asked about a local sales tax option. While the state of Wisconsin charges a 5.5% sales tax, any additional increases for Madison go to the city.

A Regional Transit Authority (RTA) was also proposed. This means that instead of the city running Metro Transit, there would be another jurisdiction that would essentially have its own local government with taxing powers that could be extended to all of Dane County. It would be infinitely more efficient and cheaper for taxpayers. In fact, there was an RTA for a few months. Governor Walker's administration made it illegal.

What is at stake?

I think the most important thing that many students don't realize is how many city services they rely on, and I don't blame them. Before I became an alder, I had no idea either. The big service that virtually every student interacts with is the buses – whether it's Bus 80 or another bus, at the end of the day it's operated by Metro Transit.

Other services include snow management in winter or ensuring garbage collection, especially if you live in a smaller apartment. So when we talk about the budget, we see possible cuts in ongoing operations.

Proposed cuts include reducing poll workers, reducing Madison's mental health workforce, eliminating a fire company, reducing overnight/weekend Metro Transit service and eliminating the aquatics program, among others.

What is the city's plan to stabilize the budget?

For the first time ever, a referendum is taking place in the city. There will be a question on November 5th that essentially says: Can we increase your property taxes by a certain amount to make up the deficit?

It will have no direct impact on students. However, this impacts the landlord and the landlord could pass these costs on to the students. For most students, a possible rent increase depends on where you live. It can actually vary from single-digit monthly increases to around $13. But in most cases, as a tenant, you won't see much compared to a referendum failure. We still can't save $22 million without eliminating many services. We would have to increase some fees. These fees would likely start much higher and most likely have a disproportionately greater impact on students.

When you vote in November, you will see a total of four referendum questions. The first proposes a state constitutional amendment, the second concerns Madison's budget, and the last two refer to [the] Madison Metropolitan School District Budget.

What should students do?

Historically, the city has always viewed students as a source of revenue, rather than a source of service delivery. I was told to my face that the students were the university's problem. The chances of something like this happening again are much higher.

I plan to vote for the referendum, as I did in the Council. If it passes, hopefully we won't see nearly as many cuts. But if it fails, we will have to make cuts. I'm afraid of that.

Govindarajan represents District 8 on the Madison Common Council. You can contact him via email [email protected].

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