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Thursday, April 7, 2011

League of Wisconsin Municipalities: Proposed Local Savings Cover only 61% of State Funding Cuts

Madison, WI. – Gov. Walker’s state budget bill proposes cuts in five major funding programs for municipalities. Together the cuts total $136 million. In announcing the proposed cuts, Gov. Walker pointed to provisions in his budget repair bill that would require some local workers to pay a portion of their health care and pension benefits. The Governor explained that the savings for local governments would offset the loss of state funding.

For the past several weeks, the League of Wisconsin Municipalities has worked with local treasurers and finance directors to analyze the full impact of the cuts and the
savings. Based on worksheets from 36 large communities, the proposed savings will cover only 61% of the funding cuts in 2012.

The worksheets came from members of the Urban Alliance, an organization within the League focused on the needs of larger communities. After reviewing the compiled data, Mayor John Dickert of Racine, President of the Urban Alliance, said,
“The Governor gave us tools to cover some the funding cuts. Now we need to work with the Joint Committee on Finance to find ways to cover the other 39%. Simply shifting the state budget deficit to local budgets doesn’t help the taxpayers of

Some communities will save little in health insurance from the Governor’s proposal. Mayor Ron Krueger of Watertown noted, “All of our city employees already pay 10% of their health insurance premiums. Going to 12% as the Governor suggests doesn’t save us much—about $17,500 a year—and Watertown will lose almost $650,000 in state funding in 2012.”

Also, pension contributions by utility workers will not help with the general fund revenue cuts. As Mayor Tim Hanna of Appleton pointed out, “Our total payroll is
$38 million, but only about one-third goes for civilian employees in the general fund. A 5.8% pension payment from those employees will save Appleton a little
under $800,000 in 2012, but Appleton is losing almost $1.9 million in funding.”

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