Local government budgeting still a challenge

IT’S NOT EASY BEING the budget-writer for local governments these days. Whether it’s the county, city, village, town or school district you’re talking about, balancing the budget is not an easy task. Here in Wisconsin, local units of government continue to grapple with state-imposed one-sizefi ts-all property tax revenue limits which hamstring their major source of revenue for funding the cost of services they must provide to their constituencies. Those tight caps leave no room for situations that can vary greatly from one locality to another and increasing costs of many of the services local governments provide.

For school districts, they don’t differentiate between districts that have been good stewards of taxpayer money in the past and those that have spent profligately in the past – indeed, districts that have been wise in controlling spending in the past are not rewarded, but penalized, by the state-imposed limits.

And now the proposed new state budget would cut state aid to local school districts even more, making the same cuts for all districts no matter what their spending and budget history might be or what local circumstances might dictate.

The same is true for counties, cities, villages and towns, which are only allowed to raise their property tax levy under state rules by the amount of new construction during the preceding year. That’s a figure that has nothing to do with increased costs of doing government business.

State officials respond that they are only doing what they have to do to balance their budget and ease the burden on state taxpayers - and they are right.

They, and many of their counterparts across the country, point to the fact that they must balance their budget every year while the federal government is allowed to enact deficit budgets year after year after year – and they are right.

But what they don’t acknowledge is that nearly every state, county, city, village, town and school district in the country is able to balance their budget year after year in large part thanks to one particular fact – the amount of aid they get from the unbalanced federal budget.

According to the Congressional Budget Office, in fiscal year 2011, the federal government provided $607 billion in grants to state and local governments. That translates to 17 percent (one-sixth) of federal outlays for that fiscal year and a quarter of spending by state and local governments for that fiscal year.

That was also nearly 40 percent of the federal budget deficit in that fiscal year – and more than the projected federal budget deficit for 2014 by nearly a half.

That’s federal aid for transportation, health care, education, income security and much more.

That’s money that did not have to go to the local property tax levy for counties, cities, villages, towns and school districts, and money that did not have to be collected by states in income and other taxes.

It’s money that we all pay in one form of taxes or another.

But local officials decrying the challenge of balancing their budgets while chastising the federal government for not balancing theirs might want to think twice about how much more difficult their task would be without the money that comes to them from that unbalanced federal budget.


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